GIFT City

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GIFT City (Gujarat International Finance Tec-City)

GIFT City (Gujarat International Finance Tec-City) is India's first integrated smart city and International Financial Services Centre (IFSC), located in Gujarat. It's designed to be a global financial and IT hub offering world-class infrastructure and a regulatory framework that meets international standards-comparable to financial centers in Singapore or Dubai.

Key Features of GIFT City:

  • Unified Regulation: Governed by the International Financial Services Centres Authority (IFSCA), it provides a streamlined, single-regulator environment that simplifies compliance and documentation.

  • International Business Environment: Facilitates foreign currency transactions and offers greater operational flexibility with offshore-like advantages while remaining geographically close to Indian markets.

  • Financial Hub: Home to banks, insurance companies, stock exchanges, and investment funds including Alternative Investment Funds (AIFs).

Why Invest in India via GIFT City?

Closer to Indian Markets: Investors benefit from reduced costs and enhanced access to India’s dynamic domestic market.

Stable Regulatory Environment: GIFT City offers a low-volatility regulatory framework, minimizing uncertainties associated with changing international agreements.

Enhanced Government Support: The city enjoys strong backing from the Indian government, ensuring favorable policies and incentives.

Compared to Domestic AIFs:

One Regulator, Less Complexity: Domestic AIFs must navigate 4-5 different regulators (SEBI, RBI, RoC, etc.), whereas GIFT City AIFs operate under a single regulatory body (IFSCA), easing documentation and onboarding.

Tax Advantages: 

Capital Gains Benefits: At the fund level, long-term capital gains are taxed at 12.5% and short-term at 20%, simplifying tax obligations for investors. Hence investor get tax free returns in their hands.

No Return Filing: Investors without other Indian income don’t need to file returns separately.

GST Exemptions: Services provided to global investors are GST-free under SEZ rules, reducing operational costs.

Cost Savings Transferred to Investors: 

Exemptions on Debt & Derivatives: No capital gains tax on these instruments under Section 10(4D).

Low Dividend Tax: Dividend taxation is capped at 10%, significantly lower than the rates for domestic AIFs.

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Investing through GIFT City gives you the benefits of offshore financial advantages while being closely connected to India’s booming market-making it an attractive, cost-effective, and simplified alternative to traditional investment avenues.

 

A Hub for Innovation and Growth

GIFT City is continually evolving to meet the needs of modern finance and technology. Its strategic design encourages innovation, attracts global talent, and supports new business models. By bridging the gap between offshore benefits and onshore operations, GIFT City stands as a compelling alternative for investors looking for cost-effective, efficient, and globally competitive avenues to tap into India’s dynamic growth story.

Strategic Advantages Over Other Investment Avenues

Investing in India via GIFT City offers several benefits compared to traditional offshore jurisdictions like Singapore or Mauritius:

 

Proximity to India’s Markets: GIFT City provides all the regulatory and tax benefits of an offshore center with the added advantage of being closer to India’s booming domestic market.

Stable and Transparent Environment: The unified regulatory framework offers low volatility and a clear, predictable business climate, reducing many of the risks associated with older offshore jurisdictions.

Enhanced Government Support: GIFT City enjoys strong backing from the Indian government, ensuring continuous improvements in infrastructure and policy that support global business operations.