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When your investor insists on a SAFE, this is the piece that shows how the Indian version actually gets built: iSAFE lives as Compulsorily Convertible Preference Shares under the Companies Act 2013, and it walks the legality and the tax side (Section 56 angle) that a company secretary will raise. Read it before you sign anything so you know whether to structure a CCPS locally or seriously consider flipping to Delaware or Singapore.
The iSAFE Option to Startup Funding: Legality and Taxation
From Vinod Kothari Consultants by Vinod Kothari Consultants 14 min read
- iSAFE only works because it is dressed as CCPS under the Companies Act, a raw US SAFE has no legal home in India
- Only companies that can issue shares can use the mechanism, and conversion triggers include priced rounds, mergers, or a time expiry
- Tax treatment (including the Section 56 angle at conversion) is a real cost to model, not an afterthought
