GIFT City: India’s answer to Singapore & UAE
"With a 100% tax exemption on business income for up to 10 years and a streamlined regulatory framework, GIFT IFSC is an attractive, cost-effective alternative for family offices expanding their global footprint."
"With a 100% tax exemption on business income for up to 10 years and a streamlined regulatory framework, GIFT IFSC is an attractive, cost-effective alternative for family offices expanding their global footprint."
"With a 100% tax exemption on business income for up to 10 years and a streamlined regulatory framework, GIFT IFSC is an attractive, cost-effective alternative for family offices expanding their global footprint."
Introduction
As family offices evolve and expand globally, established financial hubs like Singapore, Zurich, and Dubai have long held appeal for high-net-worth families seeking favorable tax regimes, robust legal structures, and easy access to international markets. Yet, on the horizon, an exciting new player is emerging: Gujarat International Finance Tec-City (GIFT IFSC), India’s response to these established giants. In a rapidly changing global landscape, GIFT IFSC is positioning itself as a compelling alternative for Indian and international families alike, offering unique advantages in cost, regulatory flexibility, and investment opportunities. Here's why family offices should take note of GIFT City.
GIFT City’s Global Hub Ambitions
Indian high-net-worth individuals (HNWIs) are increasingly seeking to diversify their portfolios and explore global opportunities. While family offices in Singapore, Dubai, and Zurich have long been the go-to for managing international investments, GIFT IFSC is stepping up as India’s answer to this trend. What makes GIFT City particularly noteworthy is its strategic goal of onshoring offshore transactions, positioning itself as an international financial services hub that adheres to global standards.
The establishment of the Family Investment Fund (FIF) framework in GIFT IFSC is a game-changer. This self-managed fund pools money from a single family, providing a formal structure for managing investments across asset classes—something Indian families have historically sought overseas. The FIF framework not only helps streamline investments but also offers unique benefits that existing global hubs cannot.
Unique Value Propositions of GIFT IFSC
GIFT IFSC’s edge lies in offering several advantages that make it an attractive option for family offices:
- Real Estate Investment: India’s strict exchange control regulations make it difficult for Indian families to invest in overseas real estate. However, FIFs at GIFT IFSC create a legal workaround, allowing families to participate in global real estate projects, enabling portfolio diversification while complying with domestic rules.
- Lower Operational Costs: GIFT City offers significant cost advantages compared to Singapore, Zurich, or Dubai. The cost of real estate, staffing, and services is markedly lower in India, driven by a combination of lower living expenses and proactive governmental incentives. Where cities like Singapore and Zurich rank among the most expensive globally, GIFT IFSC allows family offices to access high-quality talent and infrastructure without the financial overhead.
- Profit Sharing Beyond the Family: FIFs in GIFT IFSC allow non-family members—such as employees or directors—to share up to 20% of the fund’s profits. This not only fosters alignment between family offices and their teams but also creates a more inclusive investment environment, boosting motivation and retention.
- Regulatory Flexibility: GIFT IFSC has found ways to ease restrictions imposed by Indian exchange control regulations. For example, while unlisted Indian entities are generally prohibited from making overseas investments, this restriction has been relaxed for investments made through structures established at GIFT IFSC.
Competitive Regulatory and Tax Environment
GIFT IFSC is designed to compete with established hubs by offering an attractive regulatory and tax environment. Under the governance of the International Financial Services Centres Authority (IFSCA), the regulatory framework is simplified to attract family offices seeking an efficient and business-friendly environment. Family offices benefit from a 100% tax exemption on business income for up to 10 years within a 15-year block, along with exemptions on Securities Transaction Tax (STT), Commodities Transaction Tax (CTT), and stamp duties on IFSC transactions.
In contrast, financial hubs like Singapore, Zurich, and Dubai feature mature but often more rigid regulatory frameworks. While they provide economic stability, they also impose stringent compliance obligations, which can act as barriers for new or smaller family offices. GIFT IFSC’s streamlined governance offers flexibility without sacrificing legal robustness, making it a cost-effective alternative for those looking to expand their financial footprint.
Aligning with Governmental Vision
The Indian government’s vision for GIFT IFSC is to create an environment where family offices can thrive, aligning with the needs for wealth management, tax efficiency, and succession planning. The introduction of FIFs within the IFSCA framework has opened up new possibilities for Indian and international families, offering access to global markets while retaining the benefits of a home-grown, regulated environment.
Moreover, FIFs structured as private trusts have become a critical tool for succession planning, allowing families to manage wealth across generations in a manner that aligns with their long-term objectives. The Indian government has maintained an ongoing dialogue with family offices to refine the regulatory framework, ensuring that GIFT IFSC remains an attractive destination for global wealth management.
The Next 5 to 10 Years: GIFT City’s Growing Global Role
Over the next decade, GIFT IFSC is poised to play a transformative role in the global wealth management landscape. A significant investment in infrastructure, including the expansion from 886 to over 3,300 acres, underscores India’s commitment to positioning GIFT IFSC as a global financial hub.
Recent regulatory shifts in other financial centres—such as the introduction of corporate taxes in Dubai and capital gains taxes in Singapore—also present opportunities for GIFT IFSC. As these established hubs become more costly, GIFT City is well-positioned to attract a substantial portion of the global wealth management market, offering families a more affordable yet equally secure environment for their financial operations.
Addressing Challenges and Ensuring Smooth Operations
Like any emerging financial hub, GIFT IFSC presents certain challenges. Securing timely regulatory approvals, navigating RBI oversight, and ensuring compliance with evolving rules can be daunting for newcomers. However, these hurdles can be mitigated through partnerships with legal and tax professionals familiar with GIFT IFSC regulations. Leveraging expertise in cross-border transactions and operational structuring will be crucial for family offices looking to establish a presence in GIFT IFSC.
Infrastructure that Supports Global Financial Operations
Finally, GIFT IFSC offers world-class infrastructure—both physical and digital. With the recent introduction of metro connectivity, a dedicated fintech hub, and cutting-edge telecommunications (including 5G and fiber-optic networks), GIFT City is building the foundations for seamless global financial operations. The IFSCA’s SWIT system further enhances efficiency, consolidating regulatory processes across various bodies into a single digital platform, simplifying compliance and operations.
In conclusion, GIFT IFSC represents India’s bold foray into the world of global financial services. By offering a unique combination of cost efficiency, regulatory flexibility, and world-class infrastructure, it is set to attract family offices that value innovation, flexibility, and long-term growth. With the right strategies in place, GIFT City is well on its way to becoming a leading destination for family offices around the world.
About the Authors
Rohit Jain is a Partner at Singhania and Co. LLP, Solicitors & Advocates, heading the Delhi-NCR practice of the firm. A third-generation lawyer, his firm Singhania & Co. LLP was established in 1969 and is one of the top full-service law firms, with offices around the world. Rohit is also an engineer and a graduate from IIT Kharagpur, actively participating in various tech forums and keenly following the innovation space. Rohit has also been recognized by the World Bank for his contribution on ‘Doing Business in India’.
Roopal Bajaj is the leader of Investment Funds practice, and co-leader of the Private Client and Transaction Tax practice of the firm. Roopal has extensive experience in Succession Planning, Corporate Restructuring, Buy-side/ Sell-side advisory on M&A deals, Fund Structuring and Tax Due Diligence. Roopal’s clientele includes distinguished promoter families, HNWIs, Ultra-HNWIs, entrepreneurs of successful business ventures, investment houses, PE firms and C-suite executives.
Introduction
As family offices evolve and expand globally, established financial hubs like Singapore, Zurich, and Dubai have long held appeal for high-net-worth families seeking favorable tax regimes, robust legal structures, and easy access to international markets. Yet, on the horizon, an exciting new player is emerging: Gujarat International Finance Tec-City (GIFT IFSC), India’s response to these established giants. In a rapidly changing global landscape, GIFT IFSC is positioning itself as a compelling alternative for Indian and international families alike, offering unique advantages in cost, regulatory flexibility, and investment opportunities. Here's why family offices should take note of GIFT City.
GIFT City’s Global Hub Ambitions
Indian high-net-worth individuals (HNWIs) are increasingly seeking to diversify their portfolios and explore global opportunities. While family offices in Singapore, Dubai, and Zurich have long been the go-to for managing international investments, GIFT IFSC is stepping up as India’s answer to this trend. What makes GIFT City particularly noteworthy is its strategic goal of onshoring offshore transactions, positioning itself as an international financial services hub that adheres to global standards.
The establishment of the Family Investment Fund (FIF) framework in GIFT IFSC is a game-changer. This self-managed fund pools money from a single family, providing a formal structure for managing investments across asset classes—something Indian families have historically sought overseas. The FIF framework not only helps streamline investments but also offers unique benefits that existing global hubs cannot.
Unique Value Propositions of GIFT IFSC
GIFT IFSC’s edge lies in offering several advantages that make it an attractive option for family offices:
- Real Estate Investment: India’s strict exchange control regulations make it difficult for Indian families to invest in overseas real estate. However, FIFs at GIFT IFSC create a legal workaround, allowing families to participate in global real estate projects, enabling portfolio diversification while complying with domestic rules.
- Lower Operational Costs: GIFT City offers significant cost advantages compared to Singapore, Zurich, or Dubai. The cost of real estate, staffing, and services is markedly lower in India, driven by a combination of lower living expenses and proactive governmental incentives. Where cities like Singapore and Zurich rank among the most expensive globally, GIFT IFSC allows family offices to access high-quality talent and infrastructure without the financial overhead.
- Profit Sharing Beyond the Family: FIFs in GIFT IFSC allow non-family members—such as employees or directors—to share up to 20% of the fund’s profits. This not only fosters alignment between family offices and their teams but also creates a more inclusive investment environment, boosting motivation and retention.
- Regulatory Flexibility: GIFT IFSC has found ways to ease restrictions imposed by Indian exchange control regulations. For example, while unlisted Indian entities are generally prohibited from making overseas investments, this restriction has been relaxed for investments made through structures established at GIFT IFSC.
Competitive Regulatory and Tax Environment
GIFT IFSC is designed to compete with established hubs by offering an attractive regulatory and tax environment. Under the governance of the International Financial Services Centres Authority (IFSCA), the regulatory framework is simplified to attract family offices seeking an efficient and business-friendly environment. Family offices benefit from a 100% tax exemption on business income for up to 10 years within a 15-year block, along with exemptions on Securities Transaction Tax (STT), Commodities Transaction Tax (CTT), and stamp duties on IFSC transactions.
In contrast, financial hubs like Singapore, Zurich, and Dubai feature mature but often more rigid regulatory frameworks. While they provide economic stability, they also impose stringent compliance obligations, which can act as barriers for new or smaller family offices. GIFT IFSC’s streamlined governance offers flexibility without sacrificing legal robustness, making it a cost-effective alternative for those looking to expand their financial footprint.
Aligning with Governmental Vision
The Indian government’s vision for GIFT IFSC is to create an environment where family offices can thrive, aligning with the needs for wealth management, tax efficiency, and succession planning. The introduction of FIFs within the IFSCA framework has opened up new possibilities for Indian and international families, offering access to global markets while retaining the benefits of a home-grown, regulated environment.
Moreover, FIFs structured as private trusts have become a critical tool for succession planning, allowing families to manage wealth across generations in a manner that aligns with their long-term objectives. The Indian government has maintained an ongoing dialogue with family offices to refine the regulatory framework, ensuring that GIFT IFSC remains an attractive destination for global wealth management.
The Next 5 to 10 Years: GIFT City’s Growing Global Role
Over the next decade, GIFT IFSC is poised to play a transformative role in the global wealth management landscape. A significant investment in infrastructure, including the expansion from 886 to over 3,300 acres, underscores India’s commitment to positioning GIFT IFSC as a global financial hub.
Recent regulatory shifts in other financial centres—such as the introduction of corporate taxes in Dubai and capital gains taxes in Singapore—also present opportunities for GIFT IFSC. As these established hubs become more costly, GIFT City is well-positioned to attract a substantial portion of the global wealth management market, offering families a more affordable yet equally secure environment for their financial operations.
Addressing Challenges and Ensuring Smooth Operations
Like any emerging financial hub, GIFT IFSC presents certain challenges. Securing timely regulatory approvals, navigating RBI oversight, and ensuring compliance with evolving rules can be daunting for newcomers. However, these hurdles can be mitigated through partnerships with legal and tax professionals familiar with GIFT IFSC regulations. Leveraging expertise in cross-border transactions and operational structuring will be crucial for family offices looking to establish a presence in GIFT IFSC.
Infrastructure that Supports Global Financial Operations
Finally, GIFT IFSC offers world-class infrastructure—both physical and digital. With the recent introduction of metro connectivity, a dedicated fintech hub, and cutting-edge telecommunications (including 5G and fiber-optic networks), GIFT City is building the foundations for seamless global financial operations. The IFSCA’s SWIT system further enhances efficiency, consolidating regulatory processes across various bodies into a single digital platform, simplifying compliance and operations.
In conclusion, GIFT IFSC represents India’s bold foray into the world of global financial services. By offering a unique combination of cost efficiency, regulatory flexibility, and world-class infrastructure, it is set to attract family offices that value innovation, flexibility, and long-term growth. With the right strategies in place, GIFT City is well on its way to becoming a leading destination for family offices around the world.
About the Authors
Rohit Jain is a Partner at Singhania and Co. LLP, Solicitors & Advocates, heading the Delhi-NCR practice of the firm. A third-generation lawyer, his firm Singhania & Co. LLP was established in 1969 and is one of the top full-service law firms, with offices around the world. Rohit is also an engineer and a graduate from IIT Kharagpur, actively participating in various tech forums and keenly following the innovation space. Rohit has also been recognized by the World Bank for his contribution on ‘Doing Business in India’.
Roopal Bajaj is the leader of Investment Funds practice, and co-leader of the Private Client and Transaction Tax practice of the firm. Roopal has extensive experience in Succession Planning, Corporate Restructuring, Buy-side/ Sell-side advisory on M&A deals, Fund Structuring and Tax Due Diligence. Roopal’s clientele includes distinguished promoter families, HNWIs, Ultra-HNWIs, entrepreneurs of successful business ventures, investment houses, PE firms and C-suite executives.
Introduction
As family offices evolve and expand globally, established financial hubs like Singapore, Zurich, and Dubai have long held appeal for high-net-worth families seeking favorable tax regimes, robust legal structures, and easy access to international markets. Yet, on the horizon, an exciting new player is emerging: Gujarat International Finance Tec-City (GIFT IFSC), India’s response to these established giants. In a rapidly changing global landscape, GIFT IFSC is positioning itself as a compelling alternative for Indian and international families alike, offering unique advantages in cost, regulatory flexibility, and investment opportunities. Here's why family offices should take note of GIFT City.
GIFT City’s Global Hub Ambitions
Indian high-net-worth individuals (HNWIs) are increasingly seeking to diversify their portfolios and explore global opportunities. While family offices in Singapore, Dubai, and Zurich have long been the go-to for managing international investments, GIFT IFSC is stepping up as India’s answer to this trend. What makes GIFT City particularly noteworthy is its strategic goal of onshoring offshore transactions, positioning itself as an international financial services hub that adheres to global standards.
The establishment of the Family Investment Fund (FIF) framework in GIFT IFSC is a game-changer. This self-managed fund pools money from a single family, providing a formal structure for managing investments across asset classes—something Indian families have historically sought overseas. The FIF framework not only helps streamline investments but also offers unique benefits that existing global hubs cannot.
Unique Value Propositions of GIFT IFSC
GIFT IFSC’s edge lies in offering several advantages that make it an attractive option for family offices:
- Real Estate Investment: India’s strict exchange control regulations make it difficult for Indian families to invest in overseas real estate. However, FIFs at GIFT IFSC create a legal workaround, allowing families to participate in global real estate projects, enabling portfolio diversification while complying with domestic rules.
- Lower Operational Costs: GIFT City offers significant cost advantages compared to Singapore, Zurich, or Dubai. The cost of real estate, staffing, and services is markedly lower in India, driven by a combination of lower living expenses and proactive governmental incentives. Where cities like Singapore and Zurich rank among the most expensive globally, GIFT IFSC allows family offices to access high-quality talent and infrastructure without the financial overhead.
- Profit Sharing Beyond the Family: FIFs in GIFT IFSC allow non-family members—such as employees or directors—to share up to 20% of the fund’s profits. This not only fosters alignment between family offices and their teams but also creates a more inclusive investment environment, boosting motivation and retention.
- Regulatory Flexibility: GIFT IFSC has found ways to ease restrictions imposed by Indian exchange control regulations. For example, while unlisted Indian entities are generally prohibited from making overseas investments, this restriction has been relaxed for investments made through structures established at GIFT IFSC.
Competitive Regulatory and Tax Environment
GIFT IFSC is designed to compete with established hubs by offering an attractive regulatory and tax environment. Under the governance of the International Financial Services Centres Authority (IFSCA), the regulatory framework is simplified to attract family offices seeking an efficient and business-friendly environment. Family offices benefit from a 100% tax exemption on business income for up to 10 years within a 15-year block, along with exemptions on Securities Transaction Tax (STT), Commodities Transaction Tax (CTT), and stamp duties on IFSC transactions.
In contrast, financial hubs like Singapore, Zurich, and Dubai feature mature but often more rigid regulatory frameworks. While they provide economic stability, they also impose stringent compliance obligations, which can act as barriers for new or smaller family offices. GIFT IFSC’s streamlined governance offers flexibility without sacrificing legal robustness, making it a cost-effective alternative for those looking to expand their financial footprint.
Aligning with Governmental Vision
The Indian government’s vision for GIFT IFSC is to create an environment where family offices can thrive, aligning with the needs for wealth management, tax efficiency, and succession planning. The introduction of FIFs within the IFSCA framework has opened up new possibilities for Indian and international families, offering access to global markets while retaining the benefits of a home-grown, regulated environment.
Moreover, FIFs structured as private trusts have become a critical tool for succession planning, allowing families to manage wealth across generations in a manner that aligns with their long-term objectives. The Indian government has maintained an ongoing dialogue with family offices to refine the regulatory framework, ensuring that GIFT IFSC remains an attractive destination for global wealth management.
The Next 5 to 10 Years: GIFT City’s Growing Global Role
Over the next decade, GIFT IFSC is poised to play a transformative role in the global wealth management landscape. A significant investment in infrastructure, including the expansion from 886 to over 3,300 acres, underscores India’s commitment to positioning GIFT IFSC as a global financial hub.
Recent regulatory shifts in other financial centres—such as the introduction of corporate taxes in Dubai and capital gains taxes in Singapore—also present opportunities for GIFT IFSC. As these established hubs become more costly, GIFT City is well-positioned to attract a substantial portion of the global wealth management market, offering families a more affordable yet equally secure environment for their financial operations.
Addressing Challenges and Ensuring Smooth Operations
Like any emerging financial hub, GIFT IFSC presents certain challenges. Securing timely regulatory approvals, navigating RBI oversight, and ensuring compliance with evolving rules can be daunting for newcomers. However, these hurdles can be mitigated through partnerships with legal and tax professionals familiar with GIFT IFSC regulations. Leveraging expertise in cross-border transactions and operational structuring will be crucial for family offices looking to establish a presence in GIFT IFSC.
Infrastructure that Supports Global Financial Operations
Finally, GIFT IFSC offers world-class infrastructure—both physical and digital. With the recent introduction of metro connectivity, a dedicated fintech hub, and cutting-edge telecommunications (including 5G and fiber-optic networks), GIFT City is building the foundations for seamless global financial operations. The IFSCA’s SWIT system further enhances efficiency, consolidating regulatory processes across various bodies into a single digital platform, simplifying compliance and operations.
In conclusion, GIFT IFSC represents India’s bold foray into the world of global financial services. By offering a unique combination of cost efficiency, regulatory flexibility, and world-class infrastructure, it is set to attract family offices that value innovation, flexibility, and long-term growth. With the right strategies in place, GIFT City is well on its way to becoming a leading destination for family offices around the world.
About the Authors
Rohit Jain is a Partner at Singhania and Co. LLP, Solicitors & Advocates, heading the Delhi-NCR practice of the firm. A third-generation lawyer, his firm Singhania & Co. LLP was established in 1969 and is one of the top full-service law firms, with offices around the world. Rohit is also an engineer and a graduate from IIT Kharagpur, actively participating in various tech forums and keenly following the innovation space. Rohit has also been recognized by the World Bank for his contribution on ‘Doing Business in India’.
Roopal Bajaj is the leader of Investment Funds practice, and co-leader of the Private Client and Transaction Tax practice of the firm. Roopal has extensive experience in Succession Planning, Corporate Restructuring, Buy-side/ Sell-side advisory on M&A deals, Fund Structuring and Tax Due Diligence. Roopal’s clientele includes distinguished promoter families, HNWIs, Ultra-HNWIs, entrepreneurs of successful business ventures, investment houses, PE firms and C-suite executives.
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