Corporate Laws (Amendment) Bill, 2026: Key Reforms for GIFT IFSC Companies and LLPs

India’s ambition to position GIFT International Financial Services Centre (GIFT IFSC) as a leading global financial hub has received a significant legislative push through the Corporate Laws (Amendment) Bill, 2026. While the Bill introduces several reforms under the Companies Act, 2013 and the Limited Liability Partnership Act, 2008, it also contains dedicated provisions for entities regulated by the International Financial Services Centres Authority (IFSCA).

For the first time, corporate law proposes a framework that recognises the unique requirements of IFSC businesses by permitting foreign currency share capital, foreign currency financial reporting, a dedicated legal regime for IFSC LLPs and a statutory mechanism for the conversion of eligible SEBI and IFSCA-regulated trusts into LLPs. These reforms aim to enhance ease of doing business and strengthen GIFT IFSC’s competitiveness as an international financial centre.

Foreign Currency Share Capital

A landmark proposal under the Bill is the introduction of a framework permitting eligible IFSC companies to issue, maintain and alter their share capital in a permitted foreign currency.

Currently, companies incorporated in India generally maintain their authorised and paid-up share capital in Indian Rupees, even if their investors and business transactions are primarily denominated in foreign currency. This often results in exchange rate fluctuations, repeated currency conversions and valuation challenges.

The proposed amendment enables IFSCA-regulated companies established in GIFT IFSC to maintain their share capital in foreign currency specified by IFSCA in consultation with the Central Government. Existing IFSC companies are also expected to receive a regulatory mechanism for converting their existing INR-denominated share capital into a permitted foreign currency.

This reform is expected to facilitate cross-border investments, simplify capital raising from overseas investors and align the corporate structure of IFSC companies with global business practices.

Foreign Currency Books of Account and Financial Statements

The Bill also proposes that eligible IFSC companies may maintain their books of account and prepare financial statements in a permitted foreign currency.

This amendment reflects the commercial reality of many IFSC entities whose revenues, investments, borrowings and operating expenses are denominated in foreign currencies such as the US Dollar.

The proposed framework is expected to provide several practical benefits, including:

• Alignment between functional currency and reporting currency.
• Reduced foreign exchange translation adjustments.
• Simplified accounting for international transactions.
• Better comparability with overseas group companies.
• More meaningful financial reporting for global investors.

Corresponding amendments are also proposed for statutory filings relating to capital and financial reporting, thereby creating a comprehensive foreign currency reporting framework for IFSC companies.

Dedicated Framework for Specified IFSC LLPs

Another important reform is the introduction of the concept of a Specified International Financial Services Centre LLP under the LLP Act.

The Bill inserts statutory definitions for International Financial Services Centre, International Financial Services Centres Authority, Permitted Foreign Currency and Specified IFSC LLP.

A Specified IFSC LLP will be required to state in its incorporation documents that its principal object is to undertake financial services activities permitted under the IFSCA Act and applicable regulations.

The proposal provides legal recognition to LLPs operating within the IFSC ecosystem and offers greater certainty for professional services firms, financial intermediaries, fintech businesses and other entities permitted by IFSCA. Similar to companies, Specified IFSC LLPs are also proposed to maintain their accounts and financial statements in a permitted foreign currency.

Trust-to-LLP Conversion

The Bill further introduces a statutory framework allowing specified trusts regulated by SEBI or IFSCA to convert into LLPs.

This proposal is particularly relevant for investment funds and other regulated financial structures that currently operate through trust-based models. An LLP offers separate legal personality, perpetual succession, limited liability and greater operational flexibility, making it an attractive alternative for eligible entities.

While the amendment creates the corporate law framework for such conversion, organisations must also evaluate the applicable tax, accounting and regulatory implications before undertaking any restructuring.

Implementation and Way Forward

Although the Bill provides the enabling legal framework, several operational aspects will be prescribed through subordinate legislation. IFSCA, in consultation with the Central Government, is expected to notify regulations covering permitted foreign currencies, conversion of existing share capital, financial reporting, statutory filings and procedural requirements for IFSC LLPs.

The Joint Committee has also emphasised that these regulations should be framed in a timely and consultative manner to ensure consistency with India’s foreign exchange and investment policies.

Existing IFSC entities should therefore begin evaluating their capital structure, accounting systems and constitutional documents to determine how the proposed reforms may impact their business. Early planning will help organisations adopt the new framework smoothly once the amendments are notified.

Conclusion

The Corporate Laws (Amendment) Bill, 2026 marks a significant step in aligning India’s corporate laws with the needs of internationally oriented businesses operating from GIFT IFSC. By enabling foreign currency share capital and financial reporting, recognising Specified IFSC LLPs and facilitating the conversion of eligible regulated trusts into LLPs, the proposed reforms reduce compliance friction and enhance operational flexibility.

Once implemented through detailed regulations, these measures are expected to strengthen GIFT IFSC’s position as a globally competitive financial centre and provide greater confidence to international investors, multinational businesses and financial institutions choosing India as their international business destination.