What is GIFT City?
GIFT City-Gujarat International Finance Tec-City, located in Gandhi Nagar, Gujarat, stands as India’s first International Financial Services Centre (IFSC) and it is a joint initiative of the Government of Gujarat and the Central Bank of India. It was established to develop a global financial and business centre in India which can compete with the international financial centres such as Singapore, Dubai and Hong Kong.
The concept of GIFT City was straightforward; bringing in the international financial services to India instead of Indian businesses and investors going abroad to avail of such services.The vision for GIFT City was based on the idea of an international financial ecosystem with relaxed regulations and world-class infrastructure, providing international financial services to India.
Benefits of GIFT City
- Favorable tax treatment for businesses and investors.
- More relaxed rules than in normal Indian financial markets.
- Foreign currency transactions allowed
- Investment opportunities available for investors from India and abroad.
- Newly-built infrastructure and smart city facilities
- Faster approvals and simplified compliance systems
Which Types of Investors can Invest
- Foreign Investors: The key participants are, foreign individuals, institutional, sovereign funds, and global corporations. GIFT City was established to draw such capital into India’s financial ecosystem.
- Non-Resident Indians (NRIs): NRIs can invest in a range of financial products including global funds and portfolio management services, and are treated similarly to foreign investors, without restrictions which are applicable to residents.
- Resident Indians: Indian resident individuals can invest through the Liberalised Remittance Scheme (LRS) of the RBI (Reserve Bank of India), provided:
- Limit: $250,000 per financial year (~₹2 crore)
- All the investments are considered as overseas investments
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Opportunities in GIFT City
- International mutuals and wealth management
- Fintech and digital banking services.
- The leasing of aircraft and ships.
- Trading / Investing in stocks worldwide.
- Market for Information Technology, Consulting, and Financial Advisory services.
- Entrepreneurs in the financial and tech industries.
As a result of such opportunities, GIFT City is emerging as one of the most desired destinations for both investors and businesses to expand into the global market from India.
How are GIFT City Funds taxed?
Both investors and fund houses are given certain relaxation due to its operation under the IFSC system of India. Key Tax Benefits
1. For fund houses & business
- 100% tax exemption on business income
- Reduced GST benefits on certain financial services
- No STT(Securities Transaction Tax) on IFSC exchange
