GIFT IFSC is set-up in Gandhinagar, Gujarat to undertake financial services transactions that are currently carried on outside India by overseas financial institutions and overseas branches/ subsidiaries of Indian financial institutions.

GIFT City IFSC opens a great opportunity to High-net-worth individuals (HNIs) who are currently investing in overseas funds to benefit from the favourable financial environment, access to global markets, and potential tax advantages offered by the IFSC.

What Does Single Family Means?

Legal Form Of FIF

Important Considerations:

• FIF shall seek registration as an ‘Authorised FME’.
• FIF should maintain a minimum corpus of USD 10 million within 3 years from the date of obtaining certificate of registration.
• FIF can undertake all activities related to managing FIF as specified by Authority.
• FIF can borrow funds or engage in leveraging activities as per their risk management policy.
• FIF could be open ended or close ended depending upon the requirement of family
• Resident Individuals may invest in FIF upto USD 2,50,000 per year and Resident Entity may invest upto 50% of their net worth.
• FIF set up in IFSC will be considered as an Indian resident for tax purposes and an overseas resident/ offshore unit from an exchange control perspective.

Permissible Investment By FIF

Tax Benefits

• FIF would be entitled to 100% income tax exemption for ten consecutive years out of fifteen years.
• FIF would be entitled to GST exemptions on services received by unit in IFSC or provided to IFSC / SEZ units, Offshore clients.
• FIF may be subject to MAT/AMT, as applicable, and the amount thus paid should be available as credit in subsequent years. Also, TCS at 20% would be applicable from October 1, 2023, using LRS (subject to regulation) for investing in FIF.

Brief Roadmap

• Application for name reservation for a setup (Company/LLP) of proposed unit under Gift City-IFSC
• Identification of suitable office space at GIFT City
• Application for incorporation of Company/Limited Liability Partnership entity with MCA
• Application to the SEZ Authority
• Application to the IFSCA Authority
• ODI/LRS Compliance for transferring funds to GIFT City in case of resident individuals

Why Choose InCorp?

Incorp will assist you in the following services:

• Assistance in structuring the FIF as per the requirement
• Providing advisory services on regulation & taxation to ensure compliance and optimal structuring
• Assistance in preparing necessary documentation required for incorporation of FIF in GIFT City
• Assistance in setting up FIF and post setup requirements and compliance if any required by FIF

FAQs

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In this blog, we will explore the key features and potential of GIFT City as India’s upcoming economic and financial hub.

1. Integrated Ecosystem and Infrastructure:

Spanning over 886 acres, GIFT City offers a holistic and self-sustaining environment for businesses and residents. The city comprises a Central Business District (CBD), a Special Economic Zone (SEZ), and a Domestic Tariff Area (DTA). The SEZ provides tax incentives, streamlined regulations, and facilities for international trade, while the DTA encourages domestic businesses to thrive within a well-regulated framework. With 67% of the built-up area dedicated to commercial spaces, GIFT City fosters a vibrant business ecosystem.

2. Single Regulator- International Financial Services Centers (IFSCs):

GIFT City is home to India’s first International Financial Services Centers (IFSCs). These IFSCs operate under the supervision of the International Financial Services Centers Authority (IFSCA), which acts as a single regulator. The IFSCA promotes innovation, growth, and regulation of financial products, services, and institutions within GIFT City. This regulatory framework provides a secure and conducive environment for financial institutions, attracting major players from both domestic and international markets.

3. Strategic Location and Connectivity:

Situated between Gandhinagar and Ahmedabad, GIFT City benefits from its prime location in Gujarat. It offers excellent connectivity through airports, highways, and railways, facilitating easy access for businesses and professionals. The city’s strategic position as a gateway to international markets positions it as an attractive destination for global investors and businesses looking to expand their operations in India.

Related Read: What is the Place Of Effective Management (POEM) under the Income Tax Act?

4. NSE IFSC-SGX Connect:

The NSE IFSC-SGX Connect is an agreement between Singapore Exchange Limited (SGX) and the NSE’s subsidiary in GIFT City. Under this collaboration, the NSE-IFSC order matching and trading platform processes all orders on NIFTY futures made by Singapore Exchange members. The Connect is expected to enhance market liquidity for derivative trading in GIFT City, attract more foreign investors, and contribute to the overall growth and development of the local financial ecosystem.

5. Technology and Innovation:

GIFT City places a strong emphasis on technology and innovation. The city is equipped with state-of-the-art infrastructure, including advanced telecommunications and information technology systems. This enables businesses to leverage cutting-edge technologies such as artificial intelligence, blockchain, and fintech solutions to drive efficiency, productivity, and competitiveness.

6. Regulatory Flexibility:

The regulatory framework of GIFT City offers flexibility and adaptability to meet the evolving needs of businesses. The IFSCA, as the single regulator, adopts a proactive approach to understand industry requirements and implements regulatory changes efficiently. This enables businesses to navigate the regulatory landscape smoothly and encourages experimentation and innovation within a controlled environment.

7. Vibrant Business Community:

GIFT City aims to foster a vibrant and collaborative business community. The city organizes networking events, conferences, and seminars that bring together industry experts, entrepreneurs, and investors. These platforms facilitate knowledge sharing, idea generation, and business collaborations, creating a dynamic ecosystem that drives innovation and growth.

8. Sustainability and Green Initiatives:

GIFT City is committed to sustainability and eco-friendly practices. The city incorporates green building designs, renewable energy sources, waste management systems, and efficient water conservation measures. By prioritizing environmental sustainability, GIFT City not only contributes to a healthier environment but also attracts environmentally conscious businesses and investors.

9. Global Connectivity:

GIFT City is designed to have strong global connectivity. It aims to establish direct connectivity with international financial centers, enabling seamless cross-border transactions and fostering international collaborations. The city’s connectivity initiatives, such as the NSE IFSC-SGX Connect, enhance its position as a global financial hub and facilitate trade and investment opportunities.

Related Read: Note On One-Time Restructuring Of Loans

10. Miscellaneous Requirements:

The government of India provides strong support to GIFT City, recognizing its potential to drive economic growth and attract foreign investments. Various policy measures, tax incentives, and regulatory reforms are in place to encourage businesses to establish a presence in GIFT City. This support from the government further strengthens the city’s position as a preferred destination for financial and technological services.

Conclusion

GIFT City is a transformative initiative that aims to position India as a global economic and financial powerhouse. With its integrated ecosystem, regulatory support, and strategic location, GIFT City offers businesses a competitive edge and investors an attractive destination for growth. The city’s emphasis on innovation, connectivity, and social infrastructure sets the stage for its future success. As GIFT City continues to evolve and expand, it will play a crucial role in India’s economic development and serve as a beacon of opportunity for both domestic and international stakeholders.

Need help with navigating the rules and regulations in GIFT City?

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In order to capitalise on India’s potential in the international financial services sector, the entity may undertake following steps to incorporate their business in GIFT City.

Brief Process:

The procedure for establishing IFSC Unit in GIFT City is as follow:

Steps To Incorporate Your Business In GIFT City IFSC

If you are considering establishing an IFSC unit in GIFT City, this guide will walk you through the process step-by-step.

Step 1: Identification Of Suitable Office Space In GIFT SEZ

The initial step involves identifying and selecting office space within the GIFT SEZ. This includes entering into an agreement with the developer or co-developer of GIFT SEZ. The chosen office space will serve as the location for establishing your business operations within the SEZ.

Step 2: Obtain Provisional Letter of Allotment (PLOA)

After finalizing the agreement with the developer, it is necessary to obtain a Provisional Letter of Allotment (PLOA). This letter officially confirms the allocation of the chosen office space within the GIFT SEZ for your entity. The PLOA serves as a crucial document for initiating the establishment of your business operations in the SEZ.

Step 3: Application In FORM F To SEZ Authorities

The entity needs to prepare and submit FORM F along with the following annexures:

• Demand Draft of Rs 5,000/-
• Provisional Letter of Allotment issued by the Co-Developer.
• Detailed Project Report, including projections for the next five years.
• Entity ID documents such as License, PAN Card, IEC Code, etc.
• Self-certified copies of Memorandum of Association and Articles of Association.
• Self-certified copies of Board Resolution for setting up an office in GIFT IFSC.
• Certificate of Incorporation.
• List of Directors with their identity proofs.
• Last 3 years’ audited financial statements and IT returns of the entity or directors.
• Brief presentation covering the entity profile and scope of activities in GIFT IFSC.
• AFFIDAVIT

Prepare three sets of the above documents and submit them as follows:

• Original set to the Office of the Development Commissioner.
• Second set to the developer (GIFT SEZ) to facilitate the submission of NOC from the developer to the Office of the Development Commissioner.
• Third set for the entity itself.

Step 4: Unit Approval Committee (UAC) Meeting

The Development Commissioner will contact the entity for a meeting with the Unit Approval Committee (UAC) after receiving the FORM F. During the hearing, the entity’s authorised representative will present the case on their behalf.

Step 5: Letter of Permission / Approval (LOA)

The Development Commissioner will give the entity a Letter of Permission / Approval (LOA) if the UAC is pleased with the entity’s presentation.

Step 6: Letter Of Acceptance

Within 45 days of the LOA’s issuance, the entity must deliver a Letter of Acceptance to the Development Commissioner expressing acceptance of the LOA’s terms and conditions.

Step 7: Execution of Lease Deed

The entity must sign a lease deed with the co-developer of GIFT SEZ within six months of getting the LOA and submit it to the Development Commissioner.

Step 8: SEZ License and Registration with NSDL Portal

After the issuance of the SEZ License, the entity needs to obtain registration with the NSDL portal for SEZ Online Registration. This registration allows for reporting and other services related to import, procurement, and services.

Step 9: Bond Cum Legal Undertaking

The organisation must prepare and sign a Bond Cum Legal Undertaking with the Development Commissioner and GIFT SEZ’s Specified Officer before submitting it.

Step 10: Obtain Registration Certificates and Exemption Eligibility

The entity must proceed to obtain various registration certificates such as GST, RCMC, IEC, etc. Additionally, it should apply for eligibility certificates for exemption from various taxes from the Central and State Government.

Step 11: Registration with IFSCA

Before commencing business operations, the entity must obtain a Certificate of Registration from the International Financial Services Centres Authorities (IFSCA). The entity should prepare and submit an application along with the required fees to the IFSCA.

Step 12: Commencement of Business Operations

After completing all the necessary steps, the entity becomes eligible to commence its business operations (export of services). It is mandatory to inform the Office of the Development Commissioner about the date of the first export of services through an application titled “Commencement of business operations” and provide supporting evidence such as a tax invoice. A copy of the application should also be marked to the GIFT SEZ developer.

Conclusion

In conclusion, thorough adherence to the recommended measures and compliance with regulatory criteria are required when opening an office in the GIFT SEZ. Businesses may successfully navigate the procedure and take advantage of the opportunities and benefits offered within the GIFT SEZ by following this thorough guidance. This strategic step lays the way for success and development in a dynamic corporate ecosystem and aids India’s expansion in the field of international financial services.

Why Choose InCorp?

At Incorp, we understand the complexities of setting up an Insurance Intermediary Office in GIFT City IFSC. That’s why we offer specialized advisory services to guide you through the process, from initial planning to ongoing compliance. Our expertise can help your organization navigate international regulations and leverage the significant opportunities of GIFT City IFSC, such as access to global markets and a business-friendly environment.

Contact us today to learn how Incorp can assist in successfully establishing your Insurance Intermediary Office in this prestigious international financial center.

FAQs

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This article will delve into the significance of insurance intermediaries in GIFT City IFSC, their eligibility criteria, permissible activities, capital requirements, fees, and essential compliance regulations.

What Do We Mean By Insurance Intermediaries?

Insurance intermediaries act as the bridge between insurers and customers. Their primary objective is to assist clients in comprehending their insurance needs and providing advice on the most suitable insurance policies available in the market. In GIFT City IFSC, insurance intermediaries are crucial in facilitating the sale of insurance products. By offering access to a diverse range of insurance products and services, these intermediaries empower customers to make informed decisions regarding their insurance requirements.

What Is The Eligibility For Setting Up IFSC Insurance Intermediary Office?

Individuals or entities interested in establishing an IFSC Insurance Intermediary Office (‘IIIO’) in GIFT City, Gujarat, must fall under the following categories:

• Insurance Broker
• Corporate Agent (‘C.A.’)
• Surveyor and Loss Assessor (‘SLA’)
• Third-Party Administration (‘TPA’)

What Are The Permissible Activities For IIIO In Gift City?

An IIIO registered as IFSC unit in GIFT City, Gujarat, can undertake the following activities:

• Insurance Brokerage
• Corporate Agency
• Third-party Administration
• Surveying and loss assessment

Additionally, IIIOs can conduct these activities within the IFSC, from other Special Economic Zones (SEZs), and even from outside India, as permitted by the authorities. However, the Insurance Act of 1938 provisions must be strictly adhered to for any business transactions carried out in mainland India.

What Are The Minimum Capital / Net Worth Requirements For Setting Up In GIFT City As IIIO?

What Are The Fees To Set Up As IIIO In Gift City?

IFSCA specifies the following fee structure for IFSC Insurance Intermediary Offices (IIIO’s):

Conclusion

Insurance intermediaries play a vital role in the insurance process within GIFT City IFSC. These intermediaries act as facilitators between insurers and customers, providing valuable guidance and assistance in understanding insurance needs and selecting suitable policies. The regulatory framework established by the International Financial Services Centre Authorities (IFSCA) ensures transparency, safety, and security for customers.

Why Choose InCorp?

At Incorp, we understand the complexities of setting up an Insurance Intermediary Office in GIFT City IFSC. That’s why we offer specialized advisory services to guide you through the process, from initial planning to ongoing compliance. Our expertise can help your organization navigate international regulations and leverage the significant opportunities of GIFT City IFSC, such as access to global markets and a business-friendly environment.

Contact us today to learn how Incorp can assist in successfully establishing your Insurance Intermediary Office in this prestigious international financial center.

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The project aims to develop a robust and indigenous leasing and financing structure in the country, with the involvement of various stakeholders, regulatory bodies, and financial institutions. Through the efforts of Project Rupee Raftar, the International Financial Services Centre Authority Act (IFSCA) notified aircraft leasing as a financial product, creating a significant opportunity for the establishment of a viable aircraft leasing market in India. The scope of aircraft leasing includes operating lease, finance lease, and a hybrid of both. Finance lease is considered a permitted core activity, while operating lease is regarded as a permitted non-core activity.

In this blog, we will explore how the IFSCA’s move to include aircraft leasing as a financial product has opened up new avenues for financing and leasing activities, unlocking the unbridled potential of the Indian aviation market. The blog comprises of the eligibility criteria, process for registering in GIFT IFSC, tax benefits for lessors and certain general conditions to follow:

Eligibility For Aircraft Leasing In GIFT City

Lessor can undertake permissible activities depending upon nature of lease:

Eligibility of Applicant to act as lessor for Aircraft leasing in IFSC are as follows:
Promoters/partmers/Trustees shall be in Financial Action Task Force compliant jurisdiction

Minimum capital requirement of USD 30,00,000 for financial lease and USD 2,00,000 for operating lease.
Application fees of USD 1,000 (one time) and registration fees of USD 12,500 (one time) for finance lease, and application fees of USD 1000 (one time) and registration fees of USD 5000 (one time) for operating lease. Annual fees are USD 12,500 (2nd year onwards) for finance lease and USD 3,000 (2nd year onwards) for operating lease.

Process Flow For Registration Of Aircraft Leasing In GIFT City

Benefits For Aircraft Lessor Registered In GIFT City- IFSC

Benefits given by Gujarat Government for setting unit in GIFT City IFSC in Gujarat IT/ITeS policy (2022-27) :

General Conditions

• Lessor should undertake all transactions in freely convertible foreign currency only. Administrative expenses may be undertaken by the lessor in INR by maintaining a separate INR account.
• Books of Accounts, records, document to maintained as required by applicable law in any freely convertible currency.
• Lessor shall submit annual final statement within 15 days of finalization all financial information in USD unless otherwise specified.
• Lessor shall comply with Cape Town Convention and Protocol and other required statutory requirement, obligation, standards, policies direction and guidelines.
• In case the lessor fails to comply with the condition subject to which registration is granted, IFSCA may act after giving an opportunity of submission.

Conclusion

In conclusion, the Indian government’s initiative to develop a robust and indigenous leasing and financing structure, and the IFSCA’s decision to notify aircraft leasing as a financial product, has created a viable aircraft leasing market in India. The registration of aircraft lessors in GIFT City-IFSC offers various benefits, including tax exemptions, GST and customs duty exemptions, and other subsidies, which make it an attractive destination for aircraft leasing companies.

Why Choose InCorp?

At Incorp, we understand the importance of a robust and indigenous leasing and financing structure for the aviation industry. We recognize that setting up an aircraft leasing company can be a complex process, requiring expertise in various fields, including finance, law, and regulation. That’s why we offer specialized advisory services to assist companies in setting up aircraft leasing companies and availing the benefits of the recently created aircraft leasing market in India. Our team of experts can guide companies through the entire process, from initial planning and formation to ongoing compliance and management. With our help, companies can take advantage of the significant benefits offered by the new market, including access to affordable capital and increased flexibility in fleet management. Contact us today to learn more about how we can help your company succeed in the aircraft leasing industry in GIFT City.

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Gujarat International Finance Tec-City (GIFT City) is a planned business district in Gujarat, India. It is the new business destination offering competitive edge to Financial services and Technology related activities.

This article helps you understand GIFT city’s structure, permissible services, and tax benefits.

What Is GIFT City?

GIFT City is a multi-service Special Economic Zone (SEZ) with an International Financial Services Centre (IFSC) and a local financial centre. It is India’s first operational greenfield smart city and international financial services center, promoted by the Government of Gujarat as a greenfield project.

With the creation of an International Financial Services Centre, the goal is to create a world-class smart city that will become a worldwide financial hub. The government is also attempting to bring financial services and transactions to India that are now carried out in offshore financial centres by local corporate entities and overseas branches or subsidiaries of financial institutions (FIs).

GIFT City is equipped with some of the latest technology known to man. From the latest public transport, state-of-the-art infrastructure to automated waste collection to an efficient district cooling system, Gift City is an ideal environment for you to set up your business.

What Is IFSC At Gift City?

International Financial Service Centre (IFSC) is a multi-service SEZ in Gift city. IFSC is India’s first Offshore financial center. Currently, there are more than 125 licensed financial entities in IFSC. The key institutions permitted to set up an IFSC unit are the Banking sector, Insurance sector, and Capital Markets.

International (IFCs) or offshore Financial Centers are financial centres that serve consumers from countries other than their own (OFCs). All of these centres are ‘international’ in the sense that they deal with the cross-border flow of money and financial products and services.

An IFSC is thus a jurisdiction that delivers world-class financial services to non-residents and residents in a currency other than the domestic currency (Indian rupee) of the area where the IFSC is located, to the extent permissible under present legislation.

The IFSC allows Indian corporate businesses and overseas branches/subsidiaries of Financial Institutions (such as banks, insurance firms, and other financial institutions) to bring financial services and transactions that are now carried out in offshore financial centres back to India.

It provides a commercial and regulatory environment that is comparable to London and Singapore, two of the world’s top international financial centres.

IFSCs are designed to give Indian corporations easier access to global financial markets while also complementing and promoting the development of India’s financial markets.

The Gujarat International Finance Tec-City in Gandhinagar, Ahmedabad, Gujarat, has become India’s first IFSC. It is the only IFSC in India that has been authorised.

What If Gift City SEZ?

• SEZ is an area designated in Gift city where you may set up units to carry specific manufacturing and trading activities and provide certain services.
• It is considered a foreign territory which means that you need to treat the goods and services going into SEZ as exports and goods and services coming from the SEZ as imports.
• An SEZ aims to boost the economy by exporting certain goods and services.

What Are The Benefits In GIFT City?

Government of India along with Government of Gujarat have provided a slew of benefits to the entities setting up the GIFT City. These incentives range from exemption of registration fee and stamp duties to tax benefits. Details of the benefits in Gift City are set out herein below:

Fiscal Benefits to IFSC units:

1. Income Tax Benefits

Units in IFSC: