Before you file
IFSCA's How to Apply page sets out the route. Its Development team gives an overview of the opportunities, the set-up process and the tax and business rules, and can arrange a short call or a slot to present the business plan. Once you decide to apply, the regulatory team for your activity will take short calls on the framework and the application.
Three things should be in hand before the form is started:
- Premises. The CAF asks for the provisional address of the IFSC unit and a copy of the provisional letter of allotment from the co-developer.
- The entity. For a subsidiary, the company or LLP is usually incorporated first. For a branch, the CAF treats the parent as the applicant.
- The activity. Settle which permission you need. The licence and registration register maps activities to instruments.
What the CAF asks for
The CAF is filed by all applicants except those IFSCA excludes, such as market infrastructure institutions, foreign universities and payment service providers. It is supplemented by an annexure for the activity. Its main parts are:
- Sections A1 and A2: general information for branches and for entities incorporated in the IFSC. They cover the applicant or parent, the authorised person, home-regulator registrations and any no-objection certificate the IFSCA regulations require, and whether the applicant, its controllers or group entities are from a jurisdiction on the FATF high-risk or increased-monitoring lists.
- Section B: corporate information. Board resolutions, the shareholding pattern (all holders of 10% or more of shares, voting rights or distributable dividend, and persons in control), and an ownership chart through every level to the ultimate beneficial owner. It also asks for net worth certificates no older than six months, and three years' audited accounts or tax returns of the shareholders.
- Section C: business plan. The proposed activities, target markets and clients, governance and conflicts, staffing in the IFSC, activities to be carried on outside the IFSC and their risks, IT systems, risk management and compliance. IFSC Banking Units, insurers and finance companies also give five-year financial projections.
- Section D: SEZ information for the SEZ unit approval.
- Section E identifies the regulations under which permission is sought.
- Section F: declarations. These include that the applicant and its people are fit and proper, that branch operations will be ring-fenced, that the funds are not proceeds of crime and, for fund management entities, that investment decisions, portfolio management and grievance handling will be carried out from the IFSC.
- Section G: information on management for each promoter, director, KMP and 10% holder who is a natural person, where the unit is incorporated.
Documents must be in English, or accompanied by a certified translation. They are self-certified, and the documents of foreign applicants are apostilled or notarised.
Filing and fees
The final application is filed on SWIT. The application fee under IFSCA's fee circular is paid at the time of filing, and an application without the fee will not be entertained. Each application for a licence, registration, recognition or authorisation is treated separately and attracts its own application fee. The SEZ fee of Rs 5,000 is paid separately. Amounts and payment mechanics are on IFSCA fees.
After filing
The regulatory team aims to contact the applicant within 7 working days with any queries. Queries and clarifications run through SWIT, and IFSCA may ask for a meeting. If an applicant meets difficulties, IFSCA's page provides for escalation to the Chairperson. IFSCA states that it will strive to decide all applications within 45 days. In practice the clock depends on complete answers.
Where the regulations provide for it, IFSCA grants in-principle approval through SWIT. The licence or registration fee is then payable within 15 days of the intimation. If it is not paid, IFSCA may close the application and a fresh application is needed. After the lease is filed and the remaining conditions are met, IFSCA issues the final approval, the certificate of registration, through SWIT. See After approval.
Pitfalls
- Incomplete answers. The CAF states that incomplete applications will not be considered. Where a question does not apply, say so and give the reason.
- Gaps in the ownership chain. A missing level in the ownership chart to the ultimate beneficial owner is a common source of queries.
- Superseded instruments. Section E of the CAF still lists some superseded instruments; cite the current one.
- Stale or untranslated documents. Net worth certificates older than six months, and documents that are not in English or not apostilled, delay review.
- Fees paid from the wrong account. Fees must come from the entity's own account or that of its KMPs or directors. Only the initial application and registration fees may come from the parent or promoter.