Gift City is one of the most prominent zones for those who are preferring to go on international level. Also for MNCs which are planning to enter the Indian market due to its advantages. Gift City is located in Gandhinagar city of Gujarat.
GIFT City (Gujarat International Finance Tec-City) is India’s first operational Smart City and International Financial Services Centre (IFSC), designed to cater to global and domestic business operations
Gift City Provides business platforms to both Domestic tariff Areas (DTAs) for Business related to India Operations & Multi Service Economic Zone. Under Multi Service Economic Zone, it provides International Finance Service Centre (IFSC) for export of financial services & other export of services.
GIFT IFSC at par with other financial centers:
- Unified Regulatory Authority
- Competitive Tax Regime
- Relaxed Company Law
- Strategic Time Zone
- International Arbitration Centre
List of Services allowed in Gift City IFSC
IFSC primarily relates to businesses related to following financial services :
- Offshore Banking
- Borrowing & Lending
- Deposits
- Trading & Clearing Member - Capital Markets
- Insurance
- Global Inhouse Centre
- Finance Company
- Ancillary Services like legal services, compliance, professional & management, accounting & book keeping services etc.
Who Can Set Up a Company in GIFT City IFSC
Any person or entity—Indian or foreign—can establish a company or unit in GIFT City IFSC, subject to applicable laws and approvals. The eligibility depends on the type of business activity proposed:
1. Indian Entities
Indian companies registered under the Companies Act, 2013 or LLPs under LLP Act, 2008 can set up a subsidiary or branch office in GIFT City IFSC to undertake permissible financial or non- financial services.
2. Foreign Companies
Foreign entities can:
- Set up a Wholly Owned Subsidiary (WOS) or Joint Venture with an Indian partner under the Companies Act, 2013, or
- Establish a Branch Office or Foreign Company under Section 380 of the Companies Act, 2013, after obtaining approval from the Development Commissioner (SEZ) and IFSCA, if engaged in regulated financial activities.
3. Financial Institutions
Banks, insurance companies, fund managers, brokers, and other financial intermediaries (both Indian and foreign) can register as:
- Banking Unit (under IFSCA Banking Regulations, 2020)
- Finance Company or Finance Unit (under IFSCA Finance Company Regulations, 2021)
- Insurance / Reinsurance Company or Intermediary
- Fund Management Entity (FME) after obtaining licenses from IFSCA.
4. Non-Financial or Support Service Providers
Entities offering ancillary or professional services — such as legal, compliance, accounting, IT/ITeS, and management consulting — can also set up units in GIFT City’s SEZ area with SEZ and GIFT City Development Authority approval.
Advantages of setting up Company in Gift City
1) World Class infrastructure- World Class Infrastructure is available in IFSC Gift city with proper sanitation, cooling systems & Water facilities
2) Talent Availability
3) Government of Gujarat incentives: Attractive IT / ITeS policy offers various incentives like EPF reimbursement, lease rental subsidy, power subsidy, etc
4) Single Window Clearance- All the regulatory power of financial services are unified to provide services at one place namely SEBI, RBI, IRDA, Pension Fund regulatory. This is done to avoid so that Companies don’t have to approach these regulatory separately. They get the approvals & licenses at one place only.
5) Business Cost Efficiency: 20% reduction in operating costs in relation to comparable locations.
Purpose of establishment of IFSC in India
IFSC primarily caters to customers outside the jurisdiction of domestic economy. Such centres deal with flow of financial products & services across the borders. It is a jurisdiction that provides financial services top non-residents & residents, in any currency other the Indian rupee (INR).
IFSC is setup the purpose of bringing back the financial services & transactions that are currently carried out in offshore financial Centers by Indian corporate entities and overseas branches /subsidiaries of financial institutions (FIs) to India by offering business and regulatory environment.
Benefits of setting up Company in Gift City IFSC
1) Tax Holiday for 10 years- Companies will not have to pay tax for 10 consecutive years. There will be tax holiday for 10 years out of 15 Years for companies registered in IFSC.
2) No GST- There will be no GST applicable on services provided to IFSC units itself or to offshore clients. However, there will be applicability of GST on services provided in Domestic tariff area.
3) Transactions on IFSC exchanges are exempt from STT (Securities Transaction Tax), CTT (Commodities Transaction Tax), and Stamp DutyCSR provisions not applicable for 5 years from commencement.
4) Internal audit applicable only if provided in AOA 5) Certain provisions of the Companies Act, 2013 — such as mandatory constitution of Audit Committee, Nomination & Remuneration Committee, and limits on managerial remuneration — are not applicable to private companies set up in IFSC, as per MCA Notification No. GSR 8(E) dated 4 January 2017.
Steps to Set up a Company in GIFT City:
- Choose type of entity (Private/Public/LLP).
- Apply for name reservation through the MCA portal.
- Obtain approval from GIFT SEZ Development Commissioner and IFSCA (if financial activity involved).
- Incorporate under Companies Act, 2013 or LLP Act, 2008.
- Obtain Letter of Approval (LOA) from SEZ Authority.
- Register with IFSCA for regulated financial activities.
At Vidhu Duggal & Company, we specialize in assisting foreign companies with business setup and FEMA compliance in India — from incorporation to post-setup reporting.
For professional consultation, reach us at vidhu@vidhuduggalandco.com Our expert team can help you navigate all regulatory and legal requirements seamlessly.
