Why GIFT City for mutual funds?
Gujarat International Finance Tec-City (GIFT City) is strategically developed to facilitate cross-border trade and investment, governed by India’s IFSCA. Positioned as a powerful gateway to India’s economic growth, GIFT City offers mutual fund companies a dynamic environment enriched with regulatory support, advanced infrastructure, and opportunities for financial innovation. This ecosystem enables businesses to tap into India’s evolving financial landscape while benefiting from a globally competitive platform for growth and expansion.
Key advantages of GIFT City for mutual funds
Mutual funds have become essential investment vehicles, offering a diversified and professionally managed approach to capital growth. By pooling resources, mutual funds provide exposure to a broad range of assets, such as stocks and bonds, which helps mitigate risk and enhance portfolio stability. This diversified strategy positions mutual funds as an attractive option for companies aiming to participate in economic growth, with the potential for more stable returns compared to single-asset investments. As the financial markets evolve, mutual funds continue to play a pivotal role in aligning investment strategies with broader economic opportunities.
- Tax advantages: The Indian government has made GIFT City attractive through a series of tax breaks specifically targeted at financial institutions:
- 10-Year consecutive tax holiday: Companies operating in GIFT City enjoy a complete tax exemption on profits for 10 consecutive years within a 15-year period, boosting profitability and freeing up capital for growth.
- No transfer taxes: Funds can be transferred from overseas jurisdictions into GIFT City without any tax implications, simplifying the process and reducing costs associated with fund movement.
- Capital gains tax exemption: There are exemptions on capital gains tax accrued on the transfer of specified securities listed on IFSC exchanges by a non-resident or Category III AIF in IFSC.
- Global exposure with local benefits: GIFT City allows mutual fund companies to structure funds that offer global asset exposure, including investments in the U.S. and Europe, while based in India. This dual advantage enables fund managers to cater to diversified portfolios, attracting investors looking for a blend of local and international opportunities.
- Collaborative feeder fund opportunities: Rather than competing with financial hubs like Singapore and Mauritius, GIFT City offers collaborative possibilities. Mutual funds can establish feeder funds in these locations, channelling investments seamlessly into GIFT City, appealing to international investors while maintaining cross-border accessibility.
Partnering for growth in GIFT City
Asset management companies operating in GIFT City are positioned at the forefront of financial innovation, supported by a regulatory environment that fosters growth and efficiency.
We provide comprehensive and tailored solutions for alternative investment funds and corporate entities operating in GIFT City. With our extensive experience and deep understanding of the GIFT City framework, we offer a range of services designed to address the unique needs of each client. Our goal is to support your operations with efficiency and precision, ensuring compliance and driving optimal performance.
We are proud to be among the first to expand our operations to GIFT City and be part of India’s first IFSC. Please contact our team with any questions.
