A company incorporated in GIFT IFSC remains an Indian company governed by the Companies Act, 2013. However, the MCA notifications dated 4 January 2017 provide specific exemptions, modifications and adaptations for eligible IFSC public and private companies. Understanding these Companies Act exemptions for GIFT IFSC companies is essential for corporate structuring, regulatory compliance and assessing whether the exemptions extend to companies licensed by IFSCA.

The Enabling Power

Section 462 of the Companies Act permits the Central Government, in the public interest, to direct that any provision of the Act shall not apply to a class of companies, or shall apply with exceptions, modifications and adaptations. A notification under it must be laid in draft before both Houses of Parliament.

Using that power, the MCA issued G.S.R. 08(E), for a “Specified IFSC public company”, and G.S.R. 09(E), for a “Specified IFSC private company”. The public-company notification reaches further, because an unlisted public company would otherwise carry governance obligations a private company does not.

What Both Notifications Do

Several Companies Act exemptions for GIFT IFSC companies apply to both specified public and private companies under the 2017 MCA notifications.

Identity and location. The company must be limited by shares (s. 3(2)); its name must include “International Financial Service Company” or the suffix “IFSC” (s. 4(1)(a)); its objects must be confined to the financial services activities permitted under its licence and the SEZ framework (s. 4(1)(c)); and its registered office must be at the IFSC location at all times, with changes permitted within the IFSC by Board resolution but not outside it (s. 12(1) and (5)).

Time. A recurring pattern is the doubling of statutory periods. Thirty days becomes sixty for registered-office intimation (s. 12(2)), beneficial-interest declarations (s. 89(6)), filing of resolutions (s. 117(1)) and director particulars (s. 170(2)); fifteen days becomes sixty for change of office (s. 12(4)); sixty becomes ninety for the return of allotment on private placement (s. 42(6)); and charge registration may be made within three hundred days with the Registrar’s approval and additional fees (s. 82(1)).

Financial year. An IFSC company that is a subsidiary or holding company of a company incorporated outside India may align its financial year with that company without applying to the Tribunal (s. 2(41)).

Meetings and the Board. The first Board meeting is due within sixty days of incorporation, and thereafter at least one meeting in each half of a calendar year (s. 173(1)) — a material relaxation from four meetings a year. An extraordinary general meeting may be held anywhere within or outside India with shareholder consent (s. 100(1)). Section 118(10), which requires observance of secretarial standards, does not apply, and minutes need only be prepared and signed at or before the next meeting (s. 118(1)). Board powers under s. 179(3) may be exercised by resolution passed at a meeting or by circulation. An interested director may participate in a meeting if the interest is disclosed before or at it (s. 174(3)).

Audit and internal controls. Internal audit under s. 138 applies only if the articles so provide. The provisos to s. 139(2) on mandatory rotation of auditors do not apply, and the period for filling a casual vacancy is extended (s. 139(1), fourth proviso). Where Central Government approval is sought for removal of an auditor under s. 140(1), approval is deemed if there is no response within sixty days.

Corporate social responsibility. Section 135 does not apply for five years from the commencement of business.

Loans and investments. Section 186(1), on layers of investment companies, does not apply; sub-sections (2) and (3) do not apply where the Board passes a resolution at a meeting or by circulation.

Foreign companies. Sections 384(2) and (4) are adapted so that the relief from s. 92 and Chapter VI applies mutatis mutandis to a foreign company operating from an IFSC.

What the Public-Company Notification Adds

An unlisted public company in GIFT IFSC benefits from additional Companies Act exemptions and corporate governance relaxations under the 2017 MCA notification, covering key requirements for directors, committees, managerial remuneration, share capital and shareholder meetings.

The pattern is coherent. These are wholly-owned or closely-held subsidiaries of regulated financial groups, supervised by a financial regulator, whose governance is driven by the group and by IFSCA’s own requirements — including the fit and proper, principal officer and compliance officer conditions found across the IFSCA rulebooks (Article 40). The Companies Act machinery designed for widely held Indian public companies is displaced, not because governance is unimportant, but because it is delivered elsewhere.

The Definitional Question

Both notifications define the beneficiary class by reference to a company “licensed to operate by the Reserve Bank of India or the Securities and Exchange Board of India or the Insurance Regulatory and Development Authority of India from an International Financial Services Centre located in an approved multi services Special Economic Zone”.

That language reflects the position in January 2017. Since 1 October 2020, licences in GIFT IFSC are granted by IFSCA. Section 13(1) of the IFSCA Act provides that, notwithstanding any other law, all powers exercisable by an appropriate regulator specified in the First Schedule under the Acts listed there shall, in an IFSC, be exercised by IFSCA. The Companies Act, 2013 is not one of those Acts, and no amendment substituting IFSCA in the two notifications was traced as at 17 September 2026.

Two readings are possible. On the first, a licence granted by IFSCA is granted in exercise of the very powers that section 13(1) transferred from RBI, SEBI and IRDAI, so the description continues to be satisfied in substance. On the second, the notifications are to be read literally, and a company licensed only by IFSCA falls outside them. The first reading is the one that gives the notifications continuing work to do and accords with the evident purpose of the transfer, and it is the reading on which the market has proceeded. But the point has not, so far as traced, been settled by amendment or by judicial decision, and a company relying on a governance relaxation — no audit committee, no independent directors, two Board meetings a year — is relying on it for provisions whose breach carries penal consequences. Prudent practice is to document the basis of reliance, and to watch for a clarificatory amendment.

Frequently Asked Questions

1. Do Companies Act, 2013 provisions apply to GIFT IFSC companies?
Yes. The Companies Act, 2013 applies to GIFT IFSC companies, subject to the exemptions, modifications and adaptations prescribed under the MCA notifications dated 4 January 2017.

2. Which notifications provide Companies Act exemptions to IFSC companies?
G.S.R. 08(E) covers specified IFSC public companies, while G.S.R. 09(E) covers specified IFSC private companies.

3. Are independent directors mandatory for IFSC public companies?
The 2017 public-company notification exempts qualifying companies from several independent-director requirements under Section 149.

4. How many Board meetings must an IFSC company hold annually?
The applicable modification generally requires at least one Board meeting in each half of the calendar year.

5. Do the 2017 exemptions automatically cover companies licensed by IFSCA?
This remains an interpretive question because the notifications name RBI, SEBI and IRDAI, rather than IFSCA. The position has not been conclusively settled by amendment or judicial decision, based on the research described in the article.

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