Historically, the PAN (Permanent Account Number) requirement has been a significant obstacle for foreign companies wishing to establish bank accounts in GIFT IFSC. Obtaining a PAN entailed additional compliance in a new jurisdiction, which deterred many from exploring banking opportunities within GIFT IFSC.
𝐏𝐀𝐍 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧: Now, foreign companies can bypass the PAN requirement when opening a bank account in GIFT IFSC. They simply need to submit Form No. 60 to the International Banking Units (IBUs) operating in GIFT IFSC.
𝐊𝐞𝐲 𝐂𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬: These foreign companies should not have any income that is chargeable to tax in India.
𝐊𝐞𝐲 𝐃𝐨𝐜𝐮𝐦𝐞𝐧𝐭𝐬 𝐫𝐞𝐪𝐮𝐢𝐫𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐬𝐮𝐛𝐦𝐢𝐭𝐭𝐞𝐝 𝐚𝐥𝐨𝐧𝐠 𝐰𝐢𝐭𝐡 𝐅𝐨𝐫𝐦 𝐍𝐨. 60 𝐛𝐲 𝐭𝐡𝐞 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐂𝐨𝐦𝐩𝐚𝐧𝐲: – Certificate of Registration or incorporation from its home country. – Tax identification number issued in the home country. Both documents must be duly attested by authorized officials of the IFSC banking unit.
𝐔𝐬𝐞 𝐂𝐚𝐬𝐞𝐬: 1. Indian founders who have flipped their structures offshore might find banking in GIFT IFSC attractive due to its closeness to the Indian mainland. 2. Additionally, IBUs in GIFT IFSC hold an advantage over neo-banks, adeptly handling challenges such as FIRC, KYC for inward remittances, and other FEMA compliances. 3. In light of the recent SVB bank collapse, cross-border SaaS companies and startups, including those backed or funded by overseas accelerators that relied solely on SVB or had a single banking relationship, might view GIFT IFSC as an alternative or backup banking option.
For a copy of the CBDT notification, refer to the link here.
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