GIFT City – India’s Premier International Financial Centre

A Comprehensive Guide for International Investors
Prepared by Orbit | Urjita Financial Services Pvt. Ltd.
AMFI Registered Mutual Fund Distributor

This document is for informational purposes only and does not constitute financial advice.

1. What is GIFT City?

Gujarat International Finance Tec-City commonly known as GIFT Cityis India’s first and only operational International Financial Services Centre (IFSC). Located in Gandhinagar, Gujarat, it was developed to bring global financial activity back to India that had previously been routed through offshore centres like Singapore, Dubai, Hong Kong, and London.

It is regulated by the International Financial Services Centres Authority (IFSCA) — an unified regulator set up by the Indian government in 2020 to oversee all financial entities operating within the IFSC.

1.1  Why Was GIFT City Created?

India has long been one of the world’s fastest-growing economies, yet much of the cross-border financial activity connected to Indian markets was being conducted abroad, largely for reasons of regulatory ease, tax efficiency, and access to global capital. GIFT City was conceived specifically to:

• Bring offshore financial activity involving Indian assets back on Indian soil
• Create a globally competitive hub that rivals Singapore, Dubai, and Hong Kong
• Attract foreign capital into India under a simplified, internationally aligned regulatory framework
• Allow Indian companies to access international capital in a cost-effective manner
• Provide international investors easy, tax-efficient access to Indian markets

1.2  GIFT City: A World Apart from Domestic India

This is a critical distinction for international clients. GIFT City does not operate under India’s domestic financial regulations or tax laws. Instead:

• Transactions in GIFT City are denominated in freely convertible foreign currencies — primarily the US Dollar (USD)
• It has its own regulatory authority (IFSCA), separate from SEBI, RBI, and IRDAI
• Tax treaties and concessions applicable to international investors are distinct from domestic India
• Funds domiciled in GIFT City are treated as offshore funds — not as Indian mutual funds under SEBI

Think of GIFT City as a financially sovereign zone within India — Indian soil, but operating by a globally aligned rulebook.

2. Mutual Funds at GIFT City

GIFT City offers a unique avenue for international investors to access Indian and global assets through IFSC-domiciled funds. These are not Indian domestic mutual funds — they are internationally structured vehicles that invest in a range of assets while being domiciled in GIFT City.

2.1  What are GIFT City Funds?

Under the IFSCA (Fund Management) Regulations, 2022, fund managers can set up Fund Management Entities (FMEs) in GIFT City to launch and manage the following types of funds:

• Retail Schemes – Equivalent to publicly offered mutual funds, open to a broader pool of investors including non-resident Indians (NRIs) and international investors
• Non-Retail Schemes (Privately Placed) – Equivalent to alternative investment funds, suited for high-net-worth individuals (HNIs) and institutions
• Exchange-Traded Funds (ETFs) – Listed on GIFT City’s stock exchange, the India International Exchange (INX) or NSE IFSC

2.2  What Do These Funds Invest In?

GIFT City funds enjoy wide investment flexibility, covering:

• Indian equities and debt (accessed via Foreign Portfolio Investor routes)
• Global equities, international ETFs, and foreign bonds
• Derivatives, commodities, and alternative assets
• Overseas listed securities including US, European, and Asian markets

This makes GIFT City funds powerful tools for international investors seeking diversified exposure to both Indian markets and global assets, through a single, dollar-denominated vehicle.

2.3  Key Advantages for International Investors

• Dollar-denominated investments – no INR conversion required; returns are received in USD
• No foreign investment limits – unlike domestic mutual funds, GIFT City funds are not subject to India’s overseas investment caps
• Globally aligned fund structures – familiar framework for overseas investors
• Access to India’s growth story – one of the world’s fastest-growing major economies, accessible from a globally compliant, tax-efficient structure
• Simplified onboarding – KYC and account opening procedures are aligned with FATF standards, similar to opening an account with any global financial institution

2.4  Investor Eligibility

The following investor categories can invest in GIFT City funds:

• Non-Resident Indians (NRIs)
• Foreign nationals and institutional investors
• Overseas Citizens of India (OCIs)
• Foreign Portfolio Investors (FPIs)
• Resident Indians (with permissible LRS limits for certain fund types)

3. Portfolio Management Services (PMS) at GIFT City

Portfolio Management Services (PMS) in GIFT City represent a premium, bespoke investment offering for high-net-worth individuals and institutional investors seeking personalised portfolio construction, active management, and flexible investment strategies across global and Indian asset classes.

3.1  What is GIFT City PMS?

A PMS in GIFT City is managed by a registered Portfolio Manager under the IFSCA framework. Unlike a mutual fund (which pools capital across many investors into a common portfolio), a PMS maintains individual, segregated accounts for each client — meaning the portfolio is customised to the client’s unique goals, risk appetite, and preferences.

3.2  Structure and Operations

• Each client has a dedicated, individually managed account — not a pooled fund
• The portfolio manager actively manages allocations across equities, fixed income, derivatives, and alternative assets
• Investments can span Indian markets, global markets, and thematic strategies (e.g., ESG, technology, emerging markets)
• Full transparency — clients receive detailed statements and can view every holding in their portfolio

3.3  Minimum Investment

GIFT City PMS typically require a minimum investment threshold consistent with international wealth management standards. While specific minimums vary by manager, they are generally set to cater to sophisticated, high-net-worth clients – commonly starting from USD 150,000 or equivalent.

3.4  Key Advantages of GIFT City PMS Over Domestic PMS

3.5  Who Should Consider GIFT City PMS?

• International investors and family offices seeking India exposure alongside global diversification
• NRIs and diaspora investors who prefer dollar-denominated wealth management
• Institutional investors wanting a regulated, transparent Indian vehicle
• High-net-worth individuals seeking personalised, actively managed portfolios beyond standard fund products

4. Taxation of Investments at GIFT City

One of the most compelling features of GIFT City for international investors is its significantly simplified and concessional tax environment. The Indian government has deliberately structured GIFT City to be tax-competitive with leading international financial centres.

4.1  Tax Benefits for Fund Management Entities (FMEs)

• 100% tax exemption on income of FMEs for a period of 10 consecutive years out of any 15 years
• Exemption from Minimum Alternate Tax (MAT)
• No Goods and Services Tax (GST) on services provided within the IFSC
• No Securities Transaction Tax (STT) on transactions executed on IFSC exchanges
• No Commodity Transaction Tax (CTT)
• No Stamp Duty on transactions within the IFSC

4.2  Tax Treatment for International Investors

For non-resident investors (including NRIs and foreign nationals) investing in GIFT City funds and PMS:

• Capital gains arising from transfer of securities listed on IFSC exchanges are exempt from Indian capital gains tax
• Dividend income distributed by IFSC funds to non-residents is exempt from withholding tax in many scenarios
• No Dividend Distribution Tax (DDT) — abolished in India from 2020
• India’s Double Taxation Avoidance Agreements (DTAAs) apply — investors from treaty countries may benefit from further reductions in withholding tax

Important note: Tax residency and specific tax obligations in the investor’s home country remain the investor’s responsibility. GIFT City’s tax benefits relate to Indian tax incidence — investors must consult their local tax advisors to understand the treatment in their country of residence.

4.3  Summary Tax Comparison

4.4  FATCA and CRS Compliance

GIFT City is fully compliant with international tax transparency standards:

• FATCA (Foreign Account Tax Compliance Act) — US persons investing in GIFT City vehicles will have their account information reported to the IRS as required
• Common Reporting Standard (CRS) — India is a CRS participant; financial account information of non-residents in GIFT City will be automatically exchanged with their country of tax residence

This ensures that investing in GIFT City is fully above-board and consistent with global tax disclosure obligations — a significant comfort factor for international clients and their advisors.

5. Banking, Currency, and Linking Your Accounts

Understanding how money flows in and out of GIFT City is essential for international investors. The structure is designed to be intuitive, internationally familiar, and operationally simple.

5.1  Currency of Investment

All investments in GIFT City are denominated in freely convertible foreign currencies. The US Dollar (USD) is the primary and most widely used currency, though other major currencies are supported, including:

• Euro (EUR)
• British Pound (GBP)
• Japanese Yen (JPY)
• Singapore Dollar (SGD)
• Other major internationally traded currencies as permitted by IFSCA

There is no Indian Rupee (INR) requirement for international investors investing in GIFT City. This is a key differentiator from domestic Indian mutual funds, which require INR-based transactions and are subject to foreign exchange conversion costs and RBI regulations.

5.2  IFSC Banking Units (IBUs)

Major Indian and international banks have set up IFSC Banking Units (IBUs) within GIFT City. IBUs function similarly to offshore banking branches — they accept foreign currency deposits, provide loans in foreign currencies, and facilitate international wire transfers. They are not subject to India’s domestic banking regulations (such as CRR and SLR requirements).

Leading banks with IBUs in GIFT City include State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Standard Chartered, DBS Bank, and several others.

5.3  How International Investors Link Their Bank Accounts

The process of connecting your overseas bank account to your GIFT City investment account is straightforward:

• Step 1 — KYC Completion: Submit KYC documents as per IFSCA/FATF standards (passport, proof of address, source of funds declaration, tax residency certificate)
• Step 2 — Account Opening: Open an account with a Fund Manager, PMS provider, or through a registered intermediary (such as Orbit by Urjita Financial Services)
• Step 3 — Bank Linkage: Provide your overseas bank account details (SWIFT/IBAN). Funds are transferred via standard international wire transfer (SWIFT) directly to your designated IFSC account or fund subscription account
• Step 4 — Investment Execution: Once funds are received, your portfolio manager or fund administrator will execute the investment as per your mandate
• Step 5 — Redemption and Repatriation: On redemption, proceeds are repatriated to your linked overseas bank account in the same foreign currency — free of Indian withholding tax in most cases

5.4  Repatriation of Funds

One of the most investor-friendly features of GIFT City is the complete freedom of repatriation. Unlike domestic Indian investments, which may require RBI approval for large repatriations, funds invested in GIFT City can be freely repatriated:

• Principal invested can be repatriated at any time without Indian regulatory approval
• Capital gains and income can be freely repatriated
• No lock-in periods imposed by the IFSC regulatory framework (subject to specific fund terms)

5.5  No Requirement for an NRE/NRO Account

Unlike investing in domestic Indian markets, international investors in GIFT City do NOT need to open an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account with an Indian bank. All transactions are conducted in foreign currency through international wire transfers, making the process fully seamless and familiar for any global investor.

6. Why Choose Orbit for Your GIFT City Journey?

Orbit, by Urjita Financial Services Pvt. Ltd., is a SEBI-registered AMFI Mutual Fund Distributor with deep expertise in guiding clients — both resident and non-resident — to build, grow, and protect their wealth through the most efficient and transparent investment structures available in India and at GIFT City.

Our Value Proposition

• End-to-end guidance: From KYC and account setup to portfolio construction and ongoing review
• Access to curated GIFT City fund managers and PMS providers
• Personalised investment strategies aligned with your global financial goals
• Full compliance and transparency: we operate to the highest standards of fiduciary responsibility
• Dedicated relationship management for international clients, with multilingual support

Whether you are an NRI looking to invest in India’s growth story, a foreign institutional investor seeking regulated access to Indian and global markets, or a family office exploring bespoke wealth management in a globally competitive jurisdiction — Orbit is your trusted partner at GIFT City.

Disclaimer

This document is for informational purposes only and does not constitute an offer, solicitation, or financial advice. Investment in securities markets is subject to market risks. Please read all scheme-related documents carefully before investing. Investors are advised to consult their legal, tax, and financial advisors before making any investment decisions. Past performance is not indicative of future results.

Orbit | Urjita Financial Services Pvt. Ltd. | AMFI Registered Mutual Fund Distributor