India’s first International Financial Services Centre (IFSC) explained for founders, professionals, and advisors.
When global investors think of Singapore or Dubai as financial gateways, India’s answer is emerging fast — GIFT City (Gujarat International Finance Tec-City). Positioned between Ahmedabad and Gandhinagar, GIFT City is not just a real estate or SEZ project — it’s India’s attempt to build an offshore-onshore hybrid financial ecosystem, enabling global banking, fintech, insurance, and fund management operations under one integrated regulatory framework.
For company secretaries, legal professionals, and international businesses, understanding GIFT City’s structure, benefits, and governance framework is crucial to participate in India’s growing financial globalization story.
What is GIFT City?
GIFT City (Gujarat International Finance Tec-City) is India’s first operational International Financial Services Centre (IFSC), established to bring global financial and fintech activity onshore in India under a globally competitive regulatory regime.
GIFT City operates as a special financial zone with separate rules, tax benefits, and a unified regulator — the International Financial Services Centres Authority (IFSCA). It houses banks, insurers, fintechs, funds, and service providers engaged in cross-border transactions.
In essence, it’s India’s version of Singapore’s Marina Bay or Dubai’s DIFC, designed to retain offshore financial flows within the Indian jurisdiction.
How is GIFT City structured and governed?
GIFT City comprises two key zones:
- Domestic Tariff Area (DTA): operates like any Indian business district.
- Special Economic Zone (SEZ) and IFSC Zone: governed under the Special Economic Zones Act, 2005 and regulated by IFSCA, an independent authority created under the IFSCA Act, 2019.
The IFSCA consolidates powers from multiple Indian regulators — RBI, SEBI, IRDAI, and PFRDA — ensuring a single-window regulatory system for financial entities operating from GIFT City.
Why does GIFT City matter for global business in India?
GIFT City enables global financial institutions, fintech startups, and fund managers to operate from Indian soil with international-level regulatory flexibility, tax incentives, and access to global markets — helping India attract offshore capital and talent while boosting ease of doing business.
GIFT City bridges the gap between India’s domestic regulations and global financial standards. For instance, foreign banks can set up IFSC Banking Units (IBUs) under relaxed norms; fund managers can launch India-domiciled offshore funds; insurance companies can service global clients; and aircraft leasing or ship financing entities can operate tax-efficiently.
Key business activities permitted in GIFT City
Businesses can operate in multiple financial verticals, including:
- Banking & Capital Markets: IFSC Banking Units (IBUs), stock exchanges, clearing corporations.
- Insurance & Reinsurance: global insurance and reinsurance entities.
- Asset Management & Fund Services: AIFs, portfolio management, fund administration.
- FinTech: sandbox regimes, digital assets, and cross-border payment solutions.
- Aviation & Shipping Finance: aircraft/ship leasing and structured finance.
These entities benefit from no capital gains tax for certain funds, no GST on offshore services, and liberalised foreign exchange transactions — making GIFT City globally competitive.
What are the benefits of setting up in GIFT City?
- Regulatory Simplification: One unified regulator (IFSCA) for all financial activities.
- Tax Incentives:
- 100% tax holiday for 10 out of 15 years.
- No dividend distribution tax.
- No GST on export services.
- Foreign Exchange Flexibility: Transactions in foreign currency with relaxed FEMA provisions.
- Ease of Business: Single-window clearances and reduced compliance overlaps.
- Talent and Infrastructure: Smart city facilities, fintech hubs, and international workforce access.
For professionals, these advantages create a fertile ground for advisory, compliance, and structuring opportunities.
How Company Secretaries and Legal Advisors Can Add Value in GIFT City
We help businesses navigate the unique legal, regulatory, and governance framework of GIFT City — from incorporation to ongoing compliance under IFSCA. Our expertise ensures seamless approvals, structured operations, and long-term regulatory credibility for financial and fintech entities in India’s first IFSC.
Our Role in the GIFT City Ecosystem
1. Entity Incorporation & Licensing
We assist Indian and foreign promoters in establishing IFSC entities, funds, fintech ventures, and captive units within GIFT City. This includes preparation of documentation, interaction with IFSCA, and end-to-end support for licensing and business commencement under the SEZ and IFSC frameworks.
2. Regulatory Compliance and Governance
Our firm manages ongoing compliance, corporate secretarial filings, and governance reporting under IFSCA and SEZ regulations. We design compliance calendars, board reporting formats, and internal control frameworks tailored for IFSC-regulated entities.
3. Cross-Border Structuring and FEMA Integration
We advise on capital inflow and outflow structures, fund registration, and offshore–onshore coordination under FEMA and IFSCA guidelines. Our experience ensures clients maintain both international flexibility and Indian regulatory alignment — essential for fund managers, NBFCs, and fintech startups.
4. Transaction and Legal Support
We provide drafting, due diligence, and structuring assistance for aviation leasing, fund setup, fintech licensing, and financial services operations. Our integrated approach blends corporate law, FEMA, and SEZ compliance to enable smooth cross-border transactions.
Our Vision for Professionals at Work in GIFT City
As GIFT City evolves into a full-fledged global financial hub, the role of Company Secretaries and corporate lawyers will be pivotal — from regulatory interface and governance assurance to digital compliance automation.
We aim to be at the forefront of this transition, helping clients and professionals shape compliant, future-ready businesses in India’s most ambitious financial district.
Emerging trends to watch in GIFT City (2025 onwards)
- IFSCA FinTech Sandbox 2.0: new innovation-driven regulatory experiments.
- India International Bullion Exchange (IIBX) expansion.
- Global funds migration from Mauritius/Singapore to GIFT City.
- Family offices and wealth management hubs emerging under relaxed capital norms.
- Aircraft and ship leasing gaining traction under new IFSCA frameworks.
These trends are not just policy shifts but practical opportunities for Indian professionals and firms to anchor international operations.
Strategic Takeaway
GIFT City is no longer an experiment — it’s India’s financial frontier. For global companies, it’s a gateway to India with offshore flexibility; for professionals, it’s a new domain of legal, compliance, and governance expertise that will define the next decade of Indian corporate practice.
We’ve covered the fundamentals of what makes GIFT City unique. In the next article of this series, we explore its real-world impact — how it is reshaping India’s financial markets, attracting global investors, and opening new opportunities for professionals.
Read: How GIFT City Is Changing India’s Financial Landscape
Frequently Asked Questions (FAQs)
1. Is GIFT City only for financial companies?
No. While GIFT City started as a financial hub, IFSCA now encourages fintechs, consulting firms, and professional service providers to operate there. It’s evolving into a complete ecosystem for global business and innovation — not limited to traditional finance.
2. Can foreign individuals invest directly in GIFT City entities?
Yes. Foreign individuals and institutions can invest and own companies in GIFT City, subject to IFSCA registration and FEMA norms. The framework supports 100% foreign ownership in most sectors, encouraging offshore promoters to establish Indian operations seamlessly.
3. What currencies are allowed for transactions?
Entities in GIFT City can transact in freely convertible foreign currencies such as USD, GBP, or EUR. Unlike mainland India, most business and financial activities in the IFSC are conducted in foreign currency, enhancing cross-border convenience.
4. Is GIFT City outside India’s jurisdiction?
No. GIFT City is legally part of India, but it enjoys a special regulatory, tax, and foreign exchange regime under the Special Economic Zones Act, 2005 and the IFSCA Act, 2019. It functions as a globally competitive financial jurisdiction within Indian territory.
5. How do companies register or set up in GIFT City?
To set up in GIFT City, a business must obtain approval from the GIFT SEZ Authority and, where applicable, a license from IFSCA. The process includes company incorporation under the Companies Act, 2013, registration with SEZ authorities, and ongoing FEMA and IFSCA compliance.
6. What are the tax benefits available to GIFT City entities?
Entities in GIFT City enjoy 100% income tax exemption for 10 consecutive years out of 15, no dividend distribution tax, and zero GST on export services. These incentives make GIFT City highly attractive for fund managers, fintechs, and global financial institutions.
7. Who regulates business activities inside GIFT City?
The International Financial Services Centres Authority (IFSCA) serves as the single unified regulator for GIFT City, consolidating the roles of RBI, SEBI, IRDAI, and PFRDA. This unified approach simplifies compliance and accelerates regulatory approvals for global businesses.
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