Situated close to major Indian cities like Ahmedabad and Mumbai, GIFT City ensures seamless connectivity to worldwide markets. The hub also offers a cost-effective solution, as the administration, set-up, and ongoing operations costs are significantly lower compared to similar foreign jurisdictions. It is substantially more cost-effective to run a fund in GIFT City compared to Dubai, Mauritius, or Singapore due to the lower cost of living, rentals, and manpower.
With the rising number of HNIs, there is growing awareness of the benefits of establishing FIFs in GIFT City. Here’s why:
Wealth expansion and succession planning:
According to a BNN report, India is projected to experience an 85% increase in millionaires by 2034, with a potential surge of $22.5 trillion in Indian investable wealth.
FIFs provide a formal structure for family offices to manage their investment funds, making them crucial for effective succession planning.
Tax benefits:
FIFs in GIFT City enjoy tax benefits, including:
- Tax holiday: Business income is tax-free for up to 10 years within a 15-year period.
- Nil Minimum Alternate Tax (“MAT”): Domestic companies opting for a concessional tax regime pay no MAT.
- 10% tax rate on dividends: Non-residents receive dividends at a favourable tax rate.
Wide range of permissible investments:
- FIFs can invest in various asset classes, providing flexibility and diversification.
- Contributions by Family Offices/Resident Individuals are considered Overseas Portfolio Investment (“OPI”).
Regulatory framework:
- FIFs can pool money from a single family and take the form of a company, LLP, or contributory trust.
- A minimum corpus requirement of $10 million within 3 years of registration ensures substantial investment capacity.
- Setting up a physical office in GIFT City is mandatory, highlighting the importance of substance.
- FIFs in GIFT City offer tax advantages, investment flexibility, and a robust regulatory framework, making them an attractive choice for HNIs and family offices.
The introduction of FIFs in GIFT City has transformed wealth management in India, offering wealthy individuals and family offices opportunities for global diversification, progressive regulation, tax concessions, and access to a thriving financial hub.
How can we help?
We are one of the largest single-source solution providers for asset and investment managers, offering assistance with capital raising, fund services, financial services, and corporate services globally. We have a significant presence at GIFT City with a large, 20,000 sqft, well-staffed office. This signifies not only growth but also a commitment to providing exceptional service to our clients.
Let's collaborate to make significant strides at GIFT City and contribute to the growth of India's international financial services hub. We are ready to support the relocation of funds to GIFT City IFSC or the establishment of new funds.
To learn more about our services and solutions at GIFT City IFSC, contact us.
