Cross-Border Compliance in Late 2025: Key Updates for Businesses Engaging with India & the GCC

As 2025 comes to an end, cross-border transactions between India and GCC countries continue to increase. However, regulatory frameworks on both sides have evolved significantly this year. Businesses operating across these regions—whether through supply chains, service contracts, or financial arrangements—must stay aligned with the latest compliance requirements to avoid penalties and disruptions.

Key Regulatory Shifts in 2025

Several developments have influenced how companies manage cross-border activity:

• Stricter documentation requirements for cross-border service agreements

• Enhanced KYC norms for overseas remittances

• More transparent reporting for payments from Gulf entities into India

• Revised VAT rules in the UAE and Saudi Arabia affecting service imports

• Closer scrutiny of business substance for tax residency and permanent establishment considerations

These changes make documentation and compliance more essential than ever.

Impact on Businesses Engaged in GCC–India Transactions

Companies involved in cross-border operations may face new challenges such as:

• Delays in receiving payments due to compliance checks

• Additional verification for invoices and contracts

• Requirement to maintain detailed service descriptions and scope

• Clarification of GST and VAT treatment on cross-border services

• Increased responsibility to prove economic substance

The focus has shifted toward transparency and proper financial recording.

Best Practices for Compliance in Late 2025

To stay fully aligned with evolving regulations, organisations should:

• Maintain detailed service contracts with clear deliverables

• Ensure proper invoice descriptions that match the contract scope

• Track the nature of services to determine correct tax treatment

• Maintain bank communication records and compliance confirmations

• Keep updated documentation for cross-border accounting entries

• Align internal SOPs with regulatory updates

Streamlined processes reduce the chance of compliance delays during year-end or audit periods.

Preparing for 2026

With regulatory coordination increasing between India and GCC jurisdictions, businesses must maintain clarity and documentation discipline. Companies that adopt strong compliance frameworks today will be positioned for smoother operations and faster cross-border settlements in the coming year.