On the 14th of June 2021, the Indian Capital Market regulator (SEBI) under the Foreign Portfolio Investor Regulations, 2019 (FPI), enhanced the scope of granting Category I Licence not only to entities from Financial Action Task Force (FATF) member Countries but also from any country specified by the Indian Government through an arrangement. As such, the Government of India notified Cyprus of its status as an eligible country for the purpose of FPI Category I licence.
Future benefits for Cyprus as part of this development
The notification of Cyprus as an approved jurisdiction grants existing funds registered as FPI Category II an upgrade through an application route permitting enhanced trading limits with the Indian market, ODI access to Indian markets, simpler KYC procedures, non-applicability of indirect transfer provisions under the Indian tax laws, amongst others.
How BDO can help
Together with our highly experienced FPI team in India we can advise you on the appropriate investment entity to use, assist in its establishment including tax registration and liaising with custodians for FPI licence and to assist you to meet your continuing tax compliance obligations as well as providing assistance with tax audits.
Our India desk team would be pleased to assist you.
Karlos Zangoulos, kzangoulos@bdo.com.cy
Angelos Petrou, apetrou@bdo.com.cy
This publication has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained herein without obtaining specific professional advice. Please contact BDO Ltd to discuss these matters in the context of your circumstances. BDO Ltd, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
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1 Category I FPIs typically include government and government related investors, pension funds, university funds, insurance/ reinsurance entities, investment advisors, banks, etc. and entities from FATF member countries which appropriately regulated funds, university related endowment and unregulated funds subject to certain prescribed conditions.
2 FATF is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society.
3 Category I FPIs have certain benefits from an India tax perspective which is not available to Category II FPIs.
4 Category II FPIs typically include endowments and foundations, family offices, individuals corporate bodies, limited partnerships, trusts, etc.