On October 4, 2024, the International Financial Services Centres Authority (IFSCA) released guidelines regarding the utilization of office space or manpower for finance companies engaged in ship leasing activities within the International Financial Services Centre (IFSC). This follows a notification from the Ministry of Commerce and Industry, which amended the Special Economic Zones (SEZ) Rules to include ship leasing. According to Rule 21B of the SEZ Rules, authorized units may utilize resources of another authorized unit with prior approval from the IFSCA. To facilitate this, registered ship lessors can apply to share resources with proposed entities seeking registration, provided they are group entities, as defined under relevant accounting standards. The application must be submitted before the proposed entity’s incorporation, and the latter must complete its registration process within six months of receiving approval. A one-time fee of USD 2,500 is required along with the application, which must include necessary documentation and declarations. This circular aims to streamline operations for finance companies in the ship leasing sector while ensuring compliance with the regulatory framework.
International Financial Services Centres Authority
Circular No. F. No. 496/IFSCA/FC/SLF/2024-25/003 Dated: October 04, 2024
To:
All Finance Companies/ Units undertaking ship leasing activities in IFSC.
Sub: Guidelines for utilisation of office space or manpower or both by Finance Company(ies)/ Unit(s) undertaking ship leasing activity in the International Financial Services Centre (“IFSC”)
Reference is drawn to the Notification No. G.S.R. 194(E) dated March 14, 2024, issued by Department of Commerce, Ministry of Commerce and Industry notifying the Special Economic Zones (Second Amendment) Rules, 2024. The said notification states as below:
‘In the Special Economic Zones Rules, 2006, in rule 21B, for the words “aircraft leasing”, wherever they occurs, the words “aircraft or ship leasing” shall be substituted’.
2. In view of the above, the Rule 21B of the Special Economic Zones Rules, 2006 (hereinafter referred to as “SEZ Rules”) now reads as follows:
“21B.Units dealing with aircraft or ship leasing activities. – A Unit in an International Financial Services Centre, authorised to undertake aircraft or ship leasing activity, if allowed by the International Financial Services Centre Authority not to maintain separate office, may utilise office space or manpower or both, of another unit set up in International Financial Services Centre authorised to undertake aircraft or ship leasing activity, as may be approved by the Authority.”
3. The International Financial Services Centres Authority (hereinafter referred to as “Authority”) in furtherance to the Rule 21B of the SEZ Rules, 2006, issues these guidelines for a ship lessor registered with the Authority (“applicant entity”), inter- alia, for the purpose of seeking approval for utilisation of office space or manpower or both (hereinafter referred to as “resource”) with another entity intending to seek registration with the Authority for ship leasing activity (“proposed entity”). The applicant entity shall be eligible to file the application for sharing of resources under the following cases:
(i) The proposed entity shall qualify to be a ‘group entity’ of either the applicant entity or that of its parent entity. In such case the applicant entity shall submit duly filled application as per Annex A along with the one-time fee of USD 2500.
Explanation: ‘Group Entity’, shall mean an arrangement involving two or more entities related to each other through any of the relationships, viz. Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), a related party (defined in terms of AS 18), Common brand name and investment in equity shares (of 20% and above).
4. The application as mentioned in clause 3(i) above shall be made before the incorporation of the proposed entity in the IFSC. Further, the proposed entity shall be incorporated and its application for registration as a ship lessor shall be received by the Authority within a period of six months from the date of receipt of approval, for which the approval shall remain valid.
5. A copy of this circular is available on the website of the Authority at ifsca.gov.in/circular.
Yours faithfully,
Riddhi Bhandari
General Manager
([email protected])
Annex A
Format for application to the Authority (to be submitted on company letter head)
To,
The Division Head,
Division of Finance Company Regulations
International Financial Services Centres Authority,
2nd and 3rd Floor, Savvy Pragya,
Gujarat International Finance Tec-City, Gandhinagar,
Gujarat – 382 355
Dear Sir / Madam,
Subject: Application for approval under rule 21B of the SEZ Rules, 2006, to either utilise manpower or office space or both (as the case may be) of (Name of Existing Finance Company/Unit i.e. Applicant entity) with (Name of proposed Finance Company/Unit)
Reference is drawn to the circular dated October 04, 2024. (Name of the registered ship leasing entity) is a registered Finance Company/Unit bearing registration number (mention the registration number of the entity), operating in IFSC since (mention the date of registration of the entity). We make this application seeking permission to share our office space or manpower or both with (name of the proposed group entity in IFSC), which is proposed to be (relationship of the group entity with the IFSC entity) of (name of the applicant entity/parent entity).
2. We solemnly declare that to the best of our knowledge and belief, the information furnished in this application is true and statements enclosed are correct, complete and true. We are aware that if any of the information furnished herein is found to be incorrect/incomplete/untrue, this application is liable to be rejected and the approval herein, if granted, is liable to be cancelled.
Yours Faithfully,
(Signature of the Authorized Official)
Name:
Company Name:
Application form for sharing of office space or manpower or both:
| Sr. No. | Particulars | Response |
| A | Details regarding the applicant entity | |
| 1 | Name of the applicant entity (Ship Lessor registered with IFSCA). | |
| Registration details of the applicant entity (Date and Registration Number) | ||
| 2.(i) | Office Address in IFSC | |
| 2.(ii) | Is the above office space, intended to be shared with the proposed entity (i.e., entity intending to seek registration with the Authority for ship leasing activity) | Yes/No |
| 3 | Details of primary contact person of the applicant entity (name, email and contact number) |
|
| 4 | Details of the manpower to be shared (Name and designation in the applicant entity and the role in the proposed entity) | |
| 5 | A declaration regarding the date of commencement of business as per the Certificate of Registration.
If not yet commenced, proposed date of |
|
| B | Details regarding the proposed entity sharing the office space or Manpower or both of the applicant entity. | |
| 1 | Name of the proposed entity | |
| 2 | Proposed relationship with the applicant entity/parent entity of the applicant entity, along with Board Resolution. (This shall establish the relationship with the proposed entity.) (To be within the scope of ‘Group Entities’, as defined in the circular) | |
| 3 | Type of permissible activity to be undertaken by the proposed entity under the ‘Framework for Ship Leasing’. | |
| C | Other Details: | |
| 1 | New Group structure of the applicant entity (post incorporation of the proposed entity), along with the details of the shareholding at each level. | |
| 2 | Copy of proof of payment of one-time fee of USD 2500 (SWIFT MT 103 or UTR No.) as per point 3(i) of the circular. | |
| 3
|
A Declaration by the applicant entity stating that the proposed entity shall be incorporated and its application for registration as a ship lessor shall be filed before the Authority within a period of six months from the date of receipt of approval for sharing of the office space or manpower or both by the entities. |
|
| Signature of the Authorised representative of the Applicant entity: | ||
| Name: | ||
| Designation: | ||
| Seal/Stamp: | ||
| Date and Place: | ||
