RBI allows resident Indians to open FCA account in Gift City
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New Feature of GIFT CITY Account – RBI allows resident Indians to open foreign currency accounts in Gift City
The recent liberalization by the Reserve Bank of India now allows resident Indians to open foreign currency accounts in Gift City, located in the International Financial Services Centres, under the Liberalized Remittances Scheme. This expansion permits a wider range of financial activities, including:
- Buying Property Abroad: Funds can be utilized for acquiring immovable property overseas.
- Purchasing Insurance: foreign currency accounts can be used to buy insurance policies.
- Sending Gifts Abroad: Residents can now use their foreign currency accounts in IFSCs to send gifts to friends and relatives abroad.
- Education Loans: Funds from the foreign currency accounts can be used to pay for education loans.
- Overseas Travel: The accounts can also be used to fund travel abroad.
- Fixed Deposits: Residents can make fixed deposits in foreign currencies.
RBI allows resident Indians to open FCA in Gift City
With this bold move, GIFT IFSC is now in line with major international financial hubs, enabling local investors to use our platform for a greater range of international investments and expenses, according to Tapan Ray, MD and Group CEO of GIFT City. “By clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, the RBI has significantly enhanced the attractiveness and utility of GIFT IFSC.”
This liberalization allows resident individuals to use their funds for a broader range of financial services and products offered by International Financial Services Centres. This change benefits IFSC banks and life insurance companies by providing more international investment opportunities for Indian residents.
GIFT City’s IFSC offers a favourable atmosphere for global financial operations With its regulatory and tax benefits, which benefits both foreign investors and non-resident individuals. However, while investing through the IFSC, resident Indians are subject to restrictions and reporting obligations.
Resident Indians allowed activity in Gift City
The RBI’s notification indicates that authorized persons may facilitate remittances for all permissible purposes under Liberalized Remittances Scheme to International Financial Services Centres for any current or capital account transactions. This applies not only within IFSCs but also in any other foreign jurisdiction through an foreign currency accounts held in IFSCs. The permissible purposes include:
- – Gifts and donations
- – Acquisition of immovable property abroad
- – Overseas education and medical treatment
- – Private visits abroad
- – Maintenance of relatives abroad
- – Overseas portfolio investments
Previously, such accounts were limited to investing in foreign securities at IFSCs and paying fees for education to foreign universities or institutions in International Financial Services Centres. This expansion represents a significant broadening of the Liberalized Remittances Scheme, offering more flexibility & opportunities for resident Indians to engage in international financial activities.
Assistance or Services Offered by an IFSC
• Cross-border tax liability optimisation services and global tax management, which present an opportunity for financial intermediaries, accounting companies, and legal practices.
• Services for transnational firms on mergers and acquisitions.
• Services for Fundraising for Governments, Businesses, and Individuals.
• Global portfolio diversification and asset management services for mutual funds, insurance companies, and pension funds.
• Risk Management Services for Operations encompassing both reinsurance and insurance.
• Comprehensive wealth management solutions and wealth management.
• Services for Corporate Treasury Management Operations involving asset-liability matching, fund-raising, and the investment and management of liquidity.
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