IFSCA BATF Service Provider Registration in GIFT City

A Comprehensive Regulatory Guide for Book-keeping, Accounting, Taxation and Financial Crime Compliance Services

Introduction & Regulatory Background

GIFT City International Financial Services Centre (IFSC) has steadily evolved into a global hub not only for capital markets and fund management, but also for export-oriented professional and compliance services. Recognising the growing demand for offshore accounting, taxation, and financial crime compliance support, the International Financial Services Centres Authority (IFSCA) has introduced a dedicated regulatory framework through the IFSCA (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) Regulations, 2024.

These regulations, notified via the Gazette of India dated June 6, 2024, mark a structural shift from the earlier Ancillary Services Framework to a standalone, registration-based regime for BATF service providers. The objective is to promote IFSC as a trusted global delivery centre for high-value finance and compliance services while ensuring regulatory integrity, AML discipline, and clear ring-fencing from India-based operations.

For accounting firms, compliance service providers, global professional networks, and financial crime specialists, IFSCA BATF Service Provider Registration in GIFT City provides a formal and scalable pathway to service non-resident clients under a globally aligned regulatory regime.

Scope of BATF Services & Permissible Activities

The BATF Regulations clearly define the nature, boundaries, and intent of services that may be offered from IFSC. Only services expressly permitted under the regulations may be undertaken, reinforcing clarity and regulatory certainty.

Book-keeping Services

Permitted book-keeping services include:

• Recording and classification of financial transactions
• Maintenance of books of account and ledgers
• Accounting support functions related to financial records

Payroll and taxation activities are explicitly excluded from book-keeping, ensuring functional segregation.

Accounting Services

Accounting services under the BATF framework include:

• Preparation and compilation of financial statements
• Interim and annual financial reporting support
• Analysis of financial statements
• Accounting-related support services, including valuation support

Audit and assurance activities remain outside the scope of BATF services.

Taxation Services

Taxation services may include:

• Advisory on direct and indirect taxes
• Preparation and filing of tax returns
• Tax compliance support for overseas entities

The definition of “taxes” includes duties, cesses, and levies, enabling comprehensive global tax support.

Financial Crime Compliance Services

This includes:

• AML and CFT compliance support
• FATF-aligned financial crime monitoring
• Risk assessment and transaction monitoring support

These services position IFSC as a globally credible compliance outsourcing hub.

Service Boundary Conditions

• Services may be provided only to non-resident clients
• Clients must not be located in FATF high-risk jurisdictions
• Services must be delivered in Specified Foreign Currency
• Existing India-based contracts cannot be migrated to IFSC

These safeguards preserve the export-oriented nature of BATF services.

Safeguarding Conditions & Ring-Fencing Requirements

One of the most critical aspects of the BATF framework is the safeguarding mechanism, ensuring IFSC is used for genuine international service delivery rather than regulatory arbitrage.

Prohibition on Business Splitting or Reconstruction

BATF services must not arise from:

• Splitting of existing Indian businesses
• Reconstruction or restructuring of domestic operations

IFSCA evaluates substance over form when reviewing such arrangements.

Workforce Safeguards

• Employees transferred from Indian group entities must not exceed 20% of total workforce
• This threshold must be maintained annually for a period of ten years
• An employee is considered “new” only if not employed in India during the preceding 12 months

Asset and Contractual Safeguards

• No transfer of assets from Indian group entities is permitted
• Existing Indian contracts must not be novated, reassigned, or re-executed through IFSC

These safeguards ensure that IFSC-based BATF activities represent incremental global business, not migration of domestic operations.

Governance, Key Personnel & Operational Infrastructure

Key Managerial Personnel

Every BATF Service Provider must appoint:

• A Principal Officer, responsible for overall operations and regulatory accountability
• A Compliance Officer, responsible for compliance, reporting, and regulatory engagement

Both officers must:

• Be based in IFSC
• Possess prescribed professional qualifications (CA, CS, CMA, CPA, CFA, law, or equivalent)
• Have minimum experience of 5 years (Principal Officer) and 3 years (Compliance Officer)

Where financial crime compliance services are offered, additional domain expertise is required.

Office Infrastructure Requirement – Updated Position

In its 26th Meeting held on 22 December 2025, the Authority approved the deletion of sub-regulation (12) of the IFSCA (BATF) Regulations, 2024, which earlier mandated a minimum office space of 60 sq. ft. per employee for BATF Service Providers operating from GIFT-IFSC.

The removal of this requirement reflects IFSCA’s policy intent to:

• Reduce entry barriers for professional service providers
• Lower fixed operational costs
• Encourage participation by smaller and specialised firms
• Strengthen ease of doing business in IFSC

This amendment supports the evolution of flexible operating models, including technology-enabled and hybrid delivery structures, while maintaining regulatory oversight and accountability.

Currency of Operations, Reporting & Ongoing Compliance

Currency Framework

• All BATF operations must be maintained in a Specified Foreign Currency
• INR usage is restricted to administrative and statutory expenses only

Reporting & Certification

BATF Service Providers are required to:

• Submit prescribed operational and financial information to IFSCA
• Maintain financial statements in USD (unless otherwise specified)
• Furnish an annual compliance certificate issued by an independent CA, CS, or CMA within 90 days from the end of the financial year

Regulatory Oversight

IFSCA retains the authority to:

• Conduct inspections and seek information
• Grant relaxations where appropriate
• Initiate enforcement action, including suspension or cancellation of registration, following due process

Transition from Ancillary Services Framework

Entities operating under the erstwhile Ancillary Services framework:

• May continue BATF activities for three years under a Letter of Continuation
• Must obtain registration under the BATF Regulations within this transition period
• Must ensure strict ring-fencing from other IFSC activities

Failure to transition within the prescribed timeline results in loss of eligibility to provide BATF services.

Key Takeaways for Market Participants

• BATF Regulations formally position IFSC as a global professional services hub
• Entry barriers have been rationalised while maintaining governance integrity
• Strong compliance, AML discipline, and reporting remain non-negotiable
• Significant opportunity exists for accounting firms, compliance specialists, and global service providers
• Early regulatory structuring materially improves scalability and sustainability

Conclusion

The IFSCA BATF Regulations, 2024, reinforced by subsequent regulatory clarifications, represent a decisive step in positioning GIFT IFSC as a world-class destination for professional, accounting, and compliance services. By balancing flexibility with regulatory discipline, the framework enables global firms to scale operations while maintaining trust, transparency, and systemic stability.

Entities seeking IFSCA BATF Service Provider Registration in GIFT City should approach the process with a long-term strategic lens, robust governance architecture, and compliance-first mindset. When implemented effectively, the BATF framework offers a compelling platform for sustainable global service delivery from India’s international financial centre.