AIF Registration at GIFT IFSC

GIFT CITY

Overview

GIFT City, also known as the Gujarat International Finance Tec-City, is a multi-service Special Economic Zone (SEZ) with an International Financial Services Centre (IFSC) and a local financial centre1. It is India's first operational greenfield smart city and international financial services center, promoted by the Government of Gujarat as a greenfield project1. GIFT City is located near the Sabarmati River in Gandhinagar, around 12 km from the Sardar Vallabhbhai Patel International Airport2.

The city spans across 886 acres of land and includes office spaces, residential apartments, hotels, retail spaces, schools, hospitals, and clubs, making it a self-sustained city where residents can easily walk to work2.

GIFT City is aimed at becoming a global hub for financial services, and the government of India is working closely with various regulators to achieve this goal3. With its focus on fintech and financial services, GIFT City has the potential to contribute significantly to India's growing market in this sector1.

Overall, GIFT City offers a unique combination of technology, infrastructure, and facilities to attract national and international businesses in the financial sector1. It is an important initiative to promote economic growth and development in the state of Gujarat.

In India, an IFSC is approved and regulated by the Government of India under the Special Economic Zones Act, 2005
Government of India has approved GIFT City as a Multi Services Special Economic Zone (‘GIFT SEZ’) and has also notified this zone as India’s IFSC
The launch of the IFSC at GIFT City is the first step towards bringing financial services transactions relatable to India, back to Indian shores
IFSC unit is treated as a non-resident under extant Foreign Exchange Management regulations

What Is The GIFT City?

GIFT City, also known as the Gujarat International Finance Tec-City, is a multi-service Special Economic Zone (SEZ) with an International Financial Services Centre (IFSC) and a local financial centre 1 . It is India's first operational greenfield smart city and international financial services center, promoted by the Government of Gujarat as a greenfield project.

Located in the Gandhinagar district of Gujarat, GIFT City spans across 886 acres and includes office spaces, residential apartments, hotels, retail spaces, schools, hospitals, and clubs. It aims to be a self-sustained city where residents can easily walk to work.

The goal of GIFT City is to become a global hub for financial services. It is supported by the government of India, which is working closely with various regulators to achieve this objective. GIFT City's focus on fintech and financial services positions it to contribute significantly to India's growing market in this sector.

Overall, GIFT City is a unique project that combines technology, infrastructure, and facilities to attract national and international businesses in the financial sector. Its development and promotion reflect the government's commitment to fostering economic growth and development in Gujarat.

What Is Gift City SEZ?

GIFT City SEZ refers to the special economic zone (SEZ) located in the GIFT City development in the Indian state of Gujarat. It is a multi-service SEZ with various facilities and amenities, including the International Financial Services Centre (IFSC) and a local financial center.

The GIFT City SEZ was established to promote investment and growth in the financial sector and attract businesses to the state of Gujarat. It offers several benefits to companies located within its boundaries, including tax incentives, a simplified regulatory framework, and streamlined procedures for setting up and doing business.

One of the main objectives of the GIFT City SEZ is to become a global hub for financial services. It is supported by the government of India, which is working in collaboration with various financial regulators to develop a comprehensive regulatory framework to govern the activities of the businesses in the SEZ.

Overall, the GIFT City SEZ is an important initiative to promote economic growth and development in Gujarat and establish India as a leading hub for the global financial industry.

What Is Gift City IFSC? What Is the International Financial Services Centers Authority (IFSCA)?

Gift City IFSC stands for Gujarat International Finance Tec-City International Financial Services Centre. It is a financial centre and special economic zone established in Gujarat, India in 2015 to provide world-class infrastructure and services for financial institutions and companies operating in areas like banking, insurance, capital markets, and related services. Gift City IFSC serves as a hub for global economic activity and increases India's strategic position as a global hub for financial services.

The International Financial Services Centres Authority (IFSCA) is the regulatory body for Indian special economic zones such as Gift City IFSC. It was established in 2020 under the International Financial Services Centres Authority Act, 2019, to develop and regulate the financial services market in the International Financial Services Centre (IFSC) and its related areas in India. IFSCA is mandated to regulate insurance, banking and capital markets in the IFSC, and to promote and develop the IFSC.

IFSC Journey So Far

Key reforms and developments

2015 - Ministry of Finance notifies India’s first IFSC
2015- Exchange control regulations notified by RBI
2015- Capital markets regulations notified by SEBI
2016- Tax Reforms announced in Budget 2016
2016- International Exchanges established in IFSC
2017- Tie up with Singapore Arbitration Centre for Dispute resolution
2017- IRDAI issued IFSC operating guidelines for Indian, Foreign Insurers & Reinsurers
2019- Operating Guidelines for AIFs in IFSC issued by SEBI
2019- Establishment of Unified regulator in IFSC thru IFSC Authority Act
2020- Operating Guidelines for Investment Advisors in IFSC issued by SEBI
2020- Setting up of international bullion Exchange in IFSC announced in Budget 2020
2020- Rupee-Dollar trading permitted by RBI and launched at IFSC exchanges

What Are The Services Rendered In GIFT City?

Based on the information I found, GIFT City offers a range of services in the International Financial Services Centre (IFSC) within its premises. These include:

Offshore Banking: GIFT City provides a platform for offshore banking services, allowing banks to operate in a globally competitive environment and cater to international clients.

Insurance Services: The IFSC at GIFT City enables the establishment of insurance companies, offering services in areas such as life insurance, general insurance, reinsurance, and insurance broking.

Capital Markets: GIFT City facilitates capital market activities, including securities trading, clearing and settlement services, and financial intermediation.

Asset Management: The IFSC at GIFT City allows for the establishment of asset management companies, providing services such as fund management, portfolio management, and investment advisory services.

Wealth Management: GIFT City serves as a hub for wealth management services, catering to high-net-worth individuals and offering investment planning, wealth preservation, and related financial services.

Financial Technology (FinTech): GIFT City promotes the development and deployment of financial technology solutions, encouraging innovation in areas such as digital payments, blockchain, and artificial intelligence in finance.

What are the tax benefits in GIFT city?

Based on the information from my search, GIFT City offers several tax benefits to businesses and individuals operating within its premises. Some of the key tax benefits in GIFT City include Exemption from Minimum Alternate Tax (MAT): Companies operating in GIFT City are exempt from paying MAT, which is a tax levied on companies that show book profits but have little or no taxable income after claiming various deductions and exemptions.

Exemption from Dividend Distribution Tax (DDT): Dividends distributed by companies in GIFT City are not subject to DDT, which is a tax levied on the distribution of dividends by companies to their shareholders.

Exemption from Securities Transaction Tax (STT): Transactions in securities carried out in GIFT City are exempt from STT, which is a tax levied on the purchase or sale of securities listed on recognized stock exchanges.

Custom Duty Benefits: GIFT City provides customs duty benefits on the import of goods and equipment for setting up and operating businesses within the IFSC.

Tax benefits at Gift City?

GIFT City offers several tax benefits to companies operating within its jurisdiction. Some of the key tax benefits include:

Exemptions from Minimum Alternate Tax (MAT): Companies in GIFT City are exempt from MAT.
Exemptions from Dividend Distribution Tax (DDT): Dividends distributed by companies in GIFT City are exempt from DDT.
Exemptions from Securities Transaction Tax (STT): Transactions conducted in GIFT City are exempt from STT.
Exemptions from Customs Duty: Import of goods and services into GIFT City is exempt from customs duty.

These tax benefits aim to create a favorable environment for businesses in GIFT City and attract domestic and international investors. It is important to note that the specific tax benefits and regulations may be subject to change and it's advisable to consult with tax professionals and refer to official sources for the most up-to-date and accurate information.

Benefits of GST in Gift City?

GST (Goods and Services Tax) in GIFT City offers several benefits for businesses operating within its jurisdiction. Some of the key benefits are:

Simplified Tax Structure: GIFT City follows the GST regime, which provides a simplified tax structure by replacing multiple indirect taxes with a single tax. This helps businesses by eliminating the complexities associated with multiple tax compliances and reduces the overall tax burden.
Input Tax Credit: Under GST, businesses in GIFT City can claim input tax credit on the tax paid on their purchases of goods and services, including capital goods and input services. This helps in reducing the cost of inputs and enhances the competitiveness of businesses.
Streamlined Compliance: GST in GIFT City has introduced a unified compliance system, making it easier for businesses to comply with tax obligations. The implementation of technology-driven processes, like GSTN (Goods and Services Tax Network), has improved the efficiency and transparency of tax administration.
Increased Market Access: Businesses in GIFT City can take advantage of the GST framework to expand their market access across different states in India. GST has enabled seamless movement of goods and services across state borders, eliminating interstate barriers and facilitating trade
Elimination of Cascading Effect: GST in GIFT City eliminates the cascading effect of taxes, also known as the tax on tax. With the input tax credit mechanism, businesses can reduce the tax liability on their output supplies by offsetting the tax paid on their inputs. This reduces the overall cost of goods and services and promotes competitiveness.

Conclusion for Gift City

In conclusion, GIFT City (Gujarat International Finance Tec-City) is an ambitious project in India that aims to establish an International Financial Services Centre (IFSC) and a global financial hub. It offers a range of financial services and incentives to attract domestic and international businesses. Some notable features of GIFT City include:

Diverse Financial Services: GIFT City provides a platform for offshore banking, insurance services, capital markets, asset management, wealth management, and financial technology (FinTech) solutions.

Tax Benefits: Companies operating in GIFT City enjoy tax benefits such as exemptions from Minimum Alternate Tax (MAT), Dividend Distribution Tax (DDT), Securities Transaction Tax (STT), and customs duty.

Global Standards and Infrastructure: GIFT City is designed to meet international standards in terms of infrastructure, connectivity, and regulatory practices. It aims to provide a conducive environment for businesses to grow and flourish.

Promoting Investment and Employment: GIFT City intends to attract global financial institutions and investors, fostering investments in India and creating employment opportunities.

How we Estabizz Fintech can help with GIFT CITY UNIT Setup

We can provide you with some general information and guidance on setting up a unit in GIFT City. However, please note that the process and requirements may vary depending on the type of business, legal structure, and specific regulations.

Consult our professionals and relevant team for detailed assistance.

Determine the Business Structure: Decide on the legal structure of your business, such as a company, branch office, or partnership, considering factors like liability, ownership, and compliance requirements.
Eligibility and Application: Ensure that your business meets the eligibility criteria for setting up in GIFT City, as defined by the regulations. Submit the necessary application with the required documentation to the appropriate authority, such as the Gujarat International Finance Tec-City Company Limited (GIFTCL) or the regulator for your specific industry.
Obtain Approvals and Permissions: Obtain necessary approvals and permissions, including those related to licensing, permits, and regulatory compliance. This may involve engaging with relevant authorities and completing the required documentation and formalities.
Infrastructure and Office Space: Select suitable office space in GIFT City that meets your business requirements. Consider factors such as proximity to financial institutions, amenities, connectivity, and infrastructure facilities.
Tax Registration and Compliance: Register your business for taxes, such as Goods and Services Tax (GST), and comply with the applicable tax regulations in GIFT City. Consult with tax professionals to ensure compliance with tax obligations and to understand the specific tax benefits available.
Hiring and Manpower: Recruit and hire employees as per your business needs. Ensure compliance with labor laws and employment regulations governing GIFT City.
Banking and Financial Services: Establish banking relationships with approved banks operating in GIFT City. Consult with financial institutions to fulfill the necessary financial requirements and avail of the financial services offered in the financial hub.
Ongoing Compliance and Reporting: Understand and fulfill the ongoing compliance requirements, reporting obligations, and regulations as mandated by the relevant authorities in GIFT City.

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