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The Central Government has granted certain exemptions to private companies being set up in international financial services centres (IFSC) in GIFT City from the norms of the Companies Act 2013.
An IFSC caters to customers outside the jurisdiction of the domestic economy. IFSCs are set up in special economic zones, and deal with flows of finance, financial products and services across borders.
In a notification dated 4 January, uploaded on the website of the Ministry of Corporate Affair, the Government allowed 39 modifications or exemptions for private firms licensed to set up businesses in IFSCs from several clauses in the Companies Act.
The notification said IFSC companies can make private placement offers and will not be restricted by earlier offers which haven’t been completed or withdrawn. An extract of the annual return of the company will not have to be included in the board’s report. IFSC companies will not have to comply with the secretarial standards prescribed by the Institute of Company Secretaries of India. IFSC companies only need an internal audit if their articles of association provide for the same. IFSC firms can make investments through more than two investment companies.
The Government’s move is likely to benefit private companies setting up shop in Gujarat International Finance Tec-City, or GIFT City, inaugurated in April 2015 as India’s first IFSC.
Apart from the exemptions that have been granted in the Companies Act, the Government had earlier announced various tax concessions—transaction taxes and stamp duty won’t be levied in IFSCs and firms operating in them will enjoy a tax holiday.
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