GIFT City & IFSC

The various benefits offered to businesses setting up operations in the GIFT IFSC are:
• Several tax benefits and concessions related to income tax, capital gain tax, and GST levy
• Businesses are exempt from stamp duty and registration charges through various state policy
• Entities in GIFT SEZ enjoy tax benefits such as a 20-year income tax holiday, lower minimum alternative tax, and various capital gain tax exemption on certain income.
• A unified regulatory network and single window clearance from IFSCA require minimal documentation for business setup and for an international benchmark.

1. Incorporating a Fund Management Entity (FME) as LLP or Private Limited Company and taking approval from the International Financial Services Centres Authority (IFSCA) – Fund Division.
2. Post FME approval, Incorporating the fund vehicle (trust, company, LLP, or contribution vehicle), obtaining regulatory approvals, appointing key service providers such as custodian, administrator, auditor, and banker, preparing offering documents, and onboarding investors.
3. Once approved, the fund can raise capital based on the scheme from global investors and invest in international and eligible Indian opportunities while benefiting from GIFT IFSC’s regulatory flexibility and tax incentives.
4. The entire process typically takes 3–4 months, depending on the structure, documentation readiness, and regulatory approvals.

Businesses operating in GIFT IFSC must comply with applicable IFSCA regulations, including AML/CFT and KYC requirements, as well as other applicable laws such as Income Tax, GST, Labour Laws, FEMA, and SEZ regulations.
Depending on the nature of the business and regulatory license, entities may also be required to undertake periodic regulatory reporting, statutory and regulatory audits, maintain prescribed capital and infrastructure requirements, and adhere to ongoing governance and compliance obligations.

Entities undertaking eligible business activities in GIFT IFSC can avail a 100% income tax deduction on business profits for any 20 consecutive years out of 25 years from the commencement of operations, subject to the provisions of the Income-tax Act, 1961. Eligible activities include, among others, fund management, broker-dealer services, banking, insurance, and other approved financial services carried out from the IFSC.
Further, post holiday period, IFSC entities benefit from a reduced corporate tax rate of 15% (plus applicable surcharge and cess), subject to satisfaction of prescribed conditions.

Yes. GIFT IFSC offers several withholding tax (TDS) relaxations to promote international financial services activities. Pursuant to CBDT Notification No. 28/2024 dated 7 March 2024, specified payments made by an IFSC unit to certain eligible entities, including insurance intermediaries, International Banking Units (IBUs), custodians, investment advisers, fund managers, and fintech entities, may be exempt from withholding tax, subject to prescribed conditions.
Further, in 2025 expanded the scope of tax incentives available to IFSC entities by extending exemptions and rationalising withholding tax provisions for additional IFSC-related activities and transactions.
The availability of such exemptions depends on the nature of the transaction, the status of the recipient, and compliance with the conditions prescribed under the Income-tax Act and related notifications. Therefore, a transaction-specific analysis is recommended before applying the exemption.

Non-resident investors can avail significant tax benefits when investing through eligible GIFT IFSC funds. Subject to satisfaction of prescribed conditions, capital gains arising from the transfer of specified securities and certain other incomes earned through IFSC funds may be exempt from Indian taxation. Additionally, in specified cases, non-resident investors are not required to obtain a PAN or file an income tax return in India, provided the applicable taxes have been appropriately withheld or discharged in accordance with the Income-tax Act.

GIFT IFSC hosts a diverse range of businesses across the financial services ecosystem. Eligible entities include banks, insurance and reinsurance companies, broker-dealers, stock exchanges, clearing corporations, fund managers, investment advisers, custodians, trustees, fintech companies, payment service providers, leasing and aircraft financing companies, and other financial intermediaries.

In addition, IFSCA has expanded the ecosystem through dedicated frameworks for bookkeeping, accounting, taxation and financial crime compliance services (BATF), ancillary and techfin services, foreign universities, ship leasing, global access providers, family investment funds, and other innovative financial services, making GIFT IFSC a comprehensive international financial centre for global businesses.

The International Financial Services Centres Authority (IFSCA) is the unified regulator for all financial services activities undertaken in GIFT IFSC. It regulates sectors such as banking, insurance, capital markets, fund management, fintech, leasing, and other approved financial and ancillary services.

In addition to IFSCA, entities operating from GIFT IFSC are subject to the Special Economic Zones (SEZ) framework, administered through the Development Commissioner and SEZ authorities. Depending on the nature and legal form of the business, other applicable laws may include the Companies Act, Income-tax Act, GST laws, FEMA provisions, labour laws, and anti-money laundering (AML/CFT) regulations.

Accordingly, entities in GIFT IFSC typically operate under a combination of IFSCA, SEZ, corporate, tax, exchange control, and employment law frameworks.

GIFT IFSC offers a highly supportive ecosystem for fintech and techfin companies seeking to serve global markets. Key benefits include tax incentives, access to international financial institutions and investors, a globally aligned regulatory framework, and the ability to test innovative products through IFSCA’s Regulatory Sandbox and Innovation Sandbox initiatives.

Eligible entities may also benefit from IFSCA grant schemes, reduced regulatory costs, foreign currency operations, ease of cross-border business, and access to a growing network of banks, funds, insurers, and capital market participants operating within the IFSC ecosystem. These advantages make GIFT IFSC an attractive destination for fintechs looking to scale internationally.

Yes. Foreign banks can establish a presence in GIFT IFSC by setting up an International Banking Unit (IBU) under the regulatory framework prescribed by IFSCA. IBUs are permitted to undertake a wide range of activities, including deposit-taking, lending, trade finance, treasury operations, foreign exchange transactions, and other international banking services, primarily in foreign currencies.

GIFT IFSC offers foreign banks a globally competitive regulatory environment, tax incentives, access to international markets, and the ability to serve non-resident clients, offshore businesses, and other IFSC-based entities from a single international financial centre.