In a significant move aimed at bolstering the International Financial Services Centre (IFSC), the Ministry of Finance has expanded the range of activities permissible within the IFSC. A gazette notification issued on January 18 outlines the inclusion of various services, including bookkeeping, accounting, taxation, and financial crime compliance, as integral components of financial services within the IFSC.
The notification highlights that these financial services can be provided by units within the IFSC, subject to regulation by the International Financial Services Centres Authority (IFSCA). However, these services are specifically directed towards non-residents whose business presence is not established through the splitting up of an existing business in India or the reconstruction/reorganization of a business already in existence within the country.
A crucial aspect mentioned in the notification emphasizes that the units within the IFSC offering these financial services must not engage in the transfer or receipt of existing contracts or work arrangements from their group entities based in India. This measure is likely aimed at ensuring that the IFSC remains a hub for genuine international financial activities rather than facilitating the relocation of domestic operations to the IFSC.
The IFSC, with its expanded scope, is poised to play a crucial role in India’s pursuit of becoming a prominent player in the international financial arena.
