Gift City IFSC

Introduction

GIFT City (Gujarat International Finance Tec-City) is India’s first operational International Financial Services Centre (IFSC), set up under the Special Economic Zone (SEZ) Act, 2005. It offers a globally competitive environment for financial services, fintech, and allied sectors to operate from within India but cater to international markets.

Entities setting up operations in GIFT City IFSC benefit from a world-class regulatory ecosystem, tax incentives, relaxed foreign exchange regulations, and a simplified legal framework. The IFSC aims to bring financial services and transactions currently carried out offshore into the Indian jurisdiction.

Gift City IFSC

Legal Framework

Entities incorporated in GIFT City IFSC are governed by:

IFSC Authority Act, 2019

SEZ Act, 2005 and SEZ Rules, 2006

Sectoral regulations issued by the International Financial Services Centres Authority (IFSCA)

Applicable provisions of the Companies Act, 2013

Guidelines issued by regulators such as RBI, SEBI, IRDAI, and PFRDA, where applicable

The process varies based on the type of entity and the sector. However, a general outline includes:

Step 1: Application for SEZ Unit Approval 

Submit application to GIFT SEZ Authority for approval to set up a unit in the SEZ

Submission includes business plan, promoter details, and regulatory approvals if required

Step 2: Registration of Entity

Incorporation under the Companies Act, 2013 or LLP Act, 2008

Registration with IFSCA as per the applicable sectoral regulations

Step 3: Execution of Lease Agreement

Office space allotment and lease agreement within GIFT City’s notified SEZ area

Step 4: Commencement of Operations

Filing of commencement intimation with GIFT SEZ and IFSCA

Obtain other applicable registrations (PAN, TAN, GST, IEC, etc.)

The International Financial Services Centres Authority (IFSCA) is a unified regulator for financial products, services, and institutions in the IFSC. It has consolidated regulatory powers earlier exercised by RBI, SEBI, IRDAI, and PFRDA.

IFSCA issues sector-specific regulations for:

  • Banking
  • Insurance
  • Capital Markets
  • Fund Management
  • FinTech
  • International Trade Financing

  • 100% Foreign Ownership Permitted
  • Exemption from Various Domestic Regulations (in certain sectors)
  • Liberalised Currency Regulations – Transactions are carried out in foreign currency
  • Tax Incentives under the Income Tax Act, 1961:

           100% tax exemption for 10 consecutive years out of 15 years

           Exemption from Securities Transaction Tax (STT), Commodities Transaction Tax (CTT), and Stamp Duty

  • World-Class Infrastructure with a transparent and business-friendly environment
  • Single Window Clearance for regulatory approvals

  • Maintain separate books of accounts for IFSC operations
  • Filing of annual financial statements and returns as per Companies Act or LLP Act
  • Compliance with sector-specific IFSCA regulations
  • Periodic reporting to IFSCA and GIFT SEZ authorities
  • Transfer pricing regulations may apply in case of transactions with related parties
  • Sector-Specific Approvals
  • Depending on the business activity, additional registration/approval is required from IFSCA, such as:
  • Banking license for IFSC Banking Units
  • Registration as Fund Manager / AIF / Mutual Fund
  • Registration as FinTech Sandbox entity
  • Broker / Stock Exchange Membership for capital market participants

Conclusion

GIFT City IFSC presents a significant opportunity for global financial and service-oriented businesses to operate from Indian soil under a liberalised and internationally benchmarked regulatory regime. The incorporation process in GIFT IFSC is streamlined, but subject to compliance with specific sectoral guidelines and SEZ norms.

For accurate legal and procedural understanding, stakeholders should refer to the IFSCA Regulations, SEZ Rules, and Companies Act, 2013.