The Wave Of Onshoring The Offshore With The Rise Of GIFT IFSCs
Comparing the big crisis of finances in 2008, something similar happened when Silicon Valley Bank's fund collapsed in 2023 causing fund freezes affecting startups not able to access their money.
For a long time, Indian startups have been setting their presence and shops overseas which is known as 'Offshoring'. This has helped many businesses get tax benefits under the non resident tax planning services and tax on foreign remittance in India.
But, recent incidents concerning transparency, potential threats, and regulatory scrutiny paved back the business's way to 'Onshoring'. Many businesses, over $200 million have already moved their setup from overseas banks to Indian GIFT CITY special areas.
Thus, to make onshoring the offshore with International Financial Services Centre easier. The GIFT CITY is making plans for businesses to bring their headquarters back to India. With the onshoring the Indian innovation plan they are offering tax benefits and also changing laws to make it an attractive deal.
Over 400 businesses, including banks and FinTech companies, have their offices established in the GIFT CITY. However, to be a successful financial center, it is still a lot more challenging.
So, delve into the benefits of onshoring the offshore with International Financial Services Centre in the next segment of the blog.
Recommended: Complete Guide to Understanding What is Withholding Tax on Foreign Payments in India
Benefits For Non-Residents: Onshoring The Offshore With International Financial Services Centre
In the financial system, non-resident operating businesses can take leverage to stay in the competitive race with IFSC -
1. Taxation Advantages
The International Financial Services Centre authority and expert committee are offering taxation benefits to the non-residents. This includes tax holidays on profits of 10 years on transactions from specific finance centers.
2. FEMA Compliance
In the IFSC framework for onshoring the offshore, FEMA compliance has been simplified. Which again smoothens transactions for foreign exchange among non-residents.
3. Flexibility In Operations
The IFSC offers a liberalized ambiance for regulations. Which allows businesses to operate freely with greater ease.
4. Global Connectivity
IFSC facilitates global financial transactions, which allows non-residents to connect with global financial products and networks in the vast market of India.
What Are The Golden Opportunities For Startups In The Banking And Financial Sectors?
The Indian innovation to GIFT IFSC is becoming a hubspot for startup businesses, especially in the financial and banking sectors for the following reasons -
- Several foreign and Indian banks can establish special branches which is called as IBUs in the GIFT CITY.
- The IBU branches can help many startups and businesses make payments, get loans, and deal in foreign currencies. Therefore, helping to exchange currencies outside India.
- Startup businesses are getting help from financial banks with special attention and services to easily manage their money.
- Indian companies can buy companies established in the global market with the help of foreign banks. Thus, giving more options for growth.
- As many rules and taxes have been simplified by the IFSC, there is a positive shift for banks wanting to set up their business in the GIFT CITY.
Thus, onshoring the offshore with International Financial Services Centre has become good news in the current business landscape. You can get help from the GUFT CITY for all your financial problems and needs.
Read Also: Special Provisions for Non-residents under the Indian Income Tax Act
Onshoring Indian Startups: What Are The Roles Of Government Of India And the IFSC?
The Indian Government wants Indian startups to return to the land and become a success in the global world of finances. Here are a few initiatives that they have taken -
- GIFT CITY: They have formed a special zone popularly known as the GIFT CITY. Which allows businesses to deal in foreign exchange of money. This helps these startups to tap into the vast global landscape by dealing in dollars, euros, and other foreign currencies.
- Onshoring Offshore Businesses: As the Government of India wants businesses to operate from their own lands. They are making favorable changes and giving tax benefits to startups operating in the GIFT CITY to make it an attractive choice among others.
- Special Committee For Startups: At present, the maiden International Financial Services Centre in India is the GIFT IFSC. That is why, they formed a special committee to build strategies that can make it easier for Indian startups that are currently operating in foreign lands to return to India. Experts from banks, legal departments, and startup businesses formed the special committee.
Read More: Key Considerations For The GST Registration For Startups In India
Conclusion
With the progressive regulatory framework and policies, the IFSC in India is well-strategized to become a hot spot for non-residential investment in terms of business and startups.
Thus, if you need help with onshoring the offshore with International Financial Services Centre. Then, DSRV India and our experts are committed to helping you break down the complex landscape for business. So that, you can tap the full potential of IFSCs GIFT CITY.
So, get all your questions answered from our expert consultation on our website.
