{"id":113680,"date":"2021-05-06T09:45:31","date_gmt":"2021-05-06T09:45:31","guid":{"rendered":"https:\/\/fin2me.com\/?p=113680"},"modified":"2021-05-06T09:45:31","modified_gmt":"2021-05-06T09:45:31","slug":"foreigners-no-longer-need-pan-for-investment-in-gift-aifs","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/foreigners-no-longer-need-pan-for-investment-in-gift-aifs\/","title":{"rendered":"Foreigners no longer need PAN for investment in GIFT AIFs"},"content":{"rendered":"
The government has been in discussions to promote such international financial services centres within India as alternatives to places like Singapore.<\/strong><\/p>\n <\/p>\n The government has eased personal account number (PAN) requirements for foreign investors in the international financial services centre.<\/p>\n The requirement had been an impediment for category III alternative investment funds based out of the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC).<\/p>\n The move will help foreign investors on GIFT-based exchanges, according to an expert.<\/p>\n A gazette notification on Tuesday said that Section 139A, which requires people to get PAN, would not apply to such investors.<\/p>\n “The provisions of section 139A shall not apply to a non-resident, being an eligible foreign investor, who has made transaction only in a capital asset referred to in clause (viiab) of Section 47 which are listed on a recognised stock exchange located in any International Financial Services Centre and the consideration on transfer of such capital asset is paid or payable in foreign currency,” it said.<\/p>\n The government has been in discussions to promote such international financial services centres within India as alternatives to places like Singapore.<\/p>\n Many foreign investors trade in Indian assets through such centres abroad.<\/p>\n The setting up of international financial services centres in India is a means of attracting these investors to set up base within the country.<\/p>\n It had previously eased PAN requirements for foreign investors in category I and category II alternative investment funds.<\/p>\n A category III AIF includes hedge funds that can use sophisticated trading strategies to make money whether the market goes up or down.<\/p>\n A category I AIF is one that can invest in start-ups, small and medium enterprises, social venture funds, and infrastructure funds.<\/p>\n Category II AIFs are private equity funds that buy stakes in more mature companies.<\/p>\n They also invest in distressed assets. The easing of PAN requirements for them if they are based out of GIFT City happened in August 2020.<\/p>\n “The provisions of Section 139A shall not apply to a non-resident, not being a company, or a foreign company, (hereinafter referred to as the non-resident) who has, during a previous year, made an investment in a specified fund… which has been granted a certificate of registration as a category I or category II AIF and is regulated under the Sebi (Alternative Investment Funds) Regulations, 2012, and which is located in any International Financial Services Centre;” said the earlier gazette notification.<\/p>\n