Guide to setting up an Ancillary Service Provider in GIFT City

1. GIFT City’s IFSC is India’s onshore zone for international financial business—and ancillary service providers (ASPs) exist to support that ecosystem (not to run regulated financial services themselves).
2. An ASP is a registered (not licensed) category under IFSCA, meant for services that support financial products/services/institutions in the IFSC.
3. Typical permitted ASP activities include legal/compliance/secretarial, accounting/audit/tax, management consulting, administration & back-office/fund support, and non-discretionary trusteeship/fiduciary support (plus other services if IFSCA approves).
4. ASPs cannot deal in financial products, manage assets, give investment advice, hold client money/assets, or intermediate transactions—crossing this line triggers a separate financial services authorisation.
5. IFSCA expects two key roles: a Principal Officer and a Compliance Officer, both based in the IFSC and generally not shared across entities unless permitted; headcount is not fixed, but substance must match scope.
6. ASPs must operate largely in permitted foreign currencies (not INR) via IFSC banking; financial institutions may use SNRR accounts outside IFSC for INR expenses outside the zone.
7. ASPs can serve clients outside India freely (within scope), and can serve Mainland India only where the service remains ancillary and does not become an India-regulated financial activity, with FEMA/GST/TP implications managed.
8. Setup costs are driven by scope and substance: IFSCA fees are per activity (USD 1,000 application + 1,500 registration + 1,500/yr annual fee per activity), plus incorporation/SEZ onboarding, office presence, staffing, audit, and light-touch compliance.

What is GIFT City?

GIFT City—short for Gujarat International Finance Tec-City—was conceived as a very specific solution to a long-standing problem in India’s financial landscape: how to host genuinely international financial activity without pushing it offshore. Physically, it sits between Ahmedabad and Gandhinagar in Gujarat. Functionally, however, it operates in a space that is deliberately set apart from India’s domestic financial system.

The idea behind GIFT City is not simply to create another business district. It is to carve out a jurisdiction that can support cross-border banking, investment, insurance, and financial services under a regulatory and tax framework that looks and feels familiar to global institutions, while remaining within India’s legal boundaries. In that sense, GIFT City is less about geography and more about jurisdictional design.

The city is divided into two zones – a Domestic Tariff Area, which functions like any other part of India, and a Special Economic Zone. Within that SEZ sits the International Financial Services Centre, or IFSC. International financial services are permitted only within the IFSC, and entities operating there are subject to a different set of rules than those that apply in the domestic economy. 

Firms operating in the IFSC are expected to deal primarily with non-residents, overseas investors, foreign counterparties, and cross-border transactions. Business is conducted in foreign currency rather than Indian rupees, which immediately sets the IFSC apart from traditional Indian financial centres. This foreign-currency framework allows institutions to operate without many of the exchange-control constraints that apply onshore,and hence makes it viable to run international treasury operations, offshore-style funds, global insurance and reinsurance businesses, and cross-border payment platforms from within India.

Oversight of this ecosystem sits with the International Financial Services Centres Authority, or IFSCA. Unlike India’s domestic system—where banking, securities, insurance, pensions, and payments are regulated by separate authorities—the IFSC operates under a single unified regulator. For firms, it means dealing with one authority for licensing, supervision, and regulatory engagement, a one-window regulatory clearance. 

GIFT City did not grow in the way most commercial areas do. It was planned upfront as a financial district, and that planning shows in practical ways. Core services are built into the layout rather than added later, utilities are largely out of sight, and systems such as cooling and power are designed to run continuously with minimal disruption. The expectation is reliability first, not adaptation after the fact.

The office buildings are designed for institutions that need stable infrastructure, secure access, and efficient layouts, rather than for generic commercial use. Beyond office space, the development includes housing, hotels, medical facilities, schools, and everyday retail.  GIFT City is meant to function as a place where firms can base teams on a long-term basis, not just operate temporarily or for regulatory reasons.

It is equally important to be clear about what GIFT City is not. It is not intended to replace Mumbai or compete with domestic Indian markets. Nor is it an unregulated offshore haven. Instead, it occupies a middle position: a tightly supervised, internationally aligned financial jurisdiction that happens to be located within India. Activities that are difficult or impractical to conduct in the domestic framework may be permitted in the IFSC, but only within clearly articulated regulatory boundaries.

Over time, GIFT City has moved beyond concept and policy intent into real operations. Banks conduct foreign-currency lending and trade finance. Fund managers launch structures that resemble offshore funds. Insurers and reinsurers underwrite international risk. Fintech firms test cross-border models. Multinational groups establish specialised financial service centres to support overseas operations. While the ecosystem is still developing, the range of activity already reflects the original ambition behind the IFSC.

At its core, GIFT City serves as India’s interface with global finance. It allows international institutions to engage with India-linked opportunities through a familiar regulatory lens, and it enables Indian firms to operate internationally without relocating to traditional offshore centres. 

Why set up in GIFT City?

GIFT City offers a place to run international financial business without leaving the country. For decades, activities involving foreign currency, overseas investors, or cross-border structures were pushed offshore by default. GIFT City was created to pull that activity back, not by relaxing oversight, but by redesigning the framework altogether.

Since becoming operational, the IFSC has attracted a wide mix of institutions. Banks use it for foreign-currency lending and trade finance. Fund managers run India-linked strategies that would otherwise sit in traditional offshore centres. Insurers, reinsurers, payment firms, fintech platforms, leasing companies, and group treasury centres have followed. The common thread is not sector, but use case: these are activities that need to operate internationally, even when the underlying capital or risk is India-related.

Its location helps, but its real value lies in how it is positioned. Sitting between Ahmedabad and Gandhinagar, GIFT City remains close to India’s economic base while operating under a regime that is clearly separated from domestic financial rules. Indian firms can service non-resident clients and manage cross-border flows without the usual onshore constraints. Foreign institutions can engage with India-linked opportunities without having to navigate the full complexity of India’s domestic regulatory system.

Confidence in the IFSC has also been shaped by how it is regulated. Instead of multiple authorities with overlapping mandates, the entire ecosystem sits under a single regulator, the International Financial Services Centres Authority. For firms used to dealing with regulators in global financial centres, this makes a noticeable difference. Licensing paths are clearer, approvals are faster, and regulatory conversations tend to be more coordinated and predictable.

The regulatory framework itself reflects this intent. Rather than evolving slowly from legacy rules, IFSC regulations were designed with international alignment in mind from the outset. Fund management, banking, insurance, payments, fintech, leasing, and treasury operations are all covered under frameworks that borrow heavily from global practice, while still reflecting Indian policy priorities. For fund managers and fintech firms in particular, this balance between structure and flexibility has been a key draw.

Another reason GIFT City has gained traction is the sheer scale of capital linked to India. The Indian diaspora, NRIs and OCIs, family offices, and global investors are increasingly looking for ways to access Indian assets through structures that meet international governance and compliance expectations. Operating in foreign currency, within a recognisable regulatory environment, makes the IFSC a natural fit for that demand. Tax efficiency plays a role, but it is rarely the only factor.

At the same time, GIFT City is not being shaped around a single product or theme. Alongside traditional banking and funds, the ecosystem has expanded into areas such as private credit, infrastructure and real-asset strategies, aircraft and ship leasing, ESG-linked services, trade finance platforms, and cross-border payments. The range of permitted activity suggests a deliberate attempt to build depth rather than rely on one narrow advantage.

GIFT City was planned as a working financial district, not just a regulatory zone. Offices, housing, hotels, schools, healthcare, and everyday amenities sit within the same development. As more teams relocate, the city is gradually functioning less like a project site and more like a place where institutions can base operations for the long term.

Taken together, these factors explain the appeal of GIFT City. It is not simply a tax play or an experiment in regulatory arbitrage. For many firms, it has become the most straightforward way to run international financial business connected to India, without stepping outside India itself.

Specific advantages of establishing in GIFT City

Legal and regulatory framework

• Operates under a single, unified regulator – the International Financial Services Centres Authority (IFSCA)
• Regulatory frameworks aligned with international financial centres rather than domestic Indian rules
• Permits cross-border financial activities in foreign currency
• Allows 100 percent foreign ownership for most financial and ancillary services
• Simplified approval and supervision process compared to multi-regulator environments
  

Tax and fiscal benefits

• 100 percent income-tax exemption for any 20 consecutive years out of a 25-year block
• No securities transaction tax (STT) or commodities transaction tax (CTT) on IFSC exchange trades
• No GST on services received by IFSC units or on IFSC exchange transactions
• Capital gains exemptions on specified securities listed on IFSC exchanges
• Customs-duty exemptions on goods imported into the IFSC
  

Counterparty and investor confidence

• Independent statutory regulator with consolidated oversight
• Globally recognisable regulatory structure covering banking, funds, insurance, payments, and fintech
• Clear licensing categories, net-worth requirements, and compliance obligations
• Strong emphasis on AML, governance, and risk management aligned with international standards
  

Diverse and expanding ecosystem

• Presence of international and Indian banks, fund managers, insurers, fintechs, and leasing companies
• Rapidly growing fund domicile for India-linked offshore funds
• Supportive environment for global capability centres and financial services outsourcing
• Availability of professional services including legal, audit, compliance, and advisory firms
  

Strategic geographic and economic positioning

• Acts as India’s offshore financial gateway without requiring relocation to a foreign jurisdiction
• Enables participation in inbound and outbound capital flows linked to India
• Supports India’s role in South-South trade and cross-border investment between Asia, the Middle East, and Africa
• Well-positioned to benefit from long-term growth in emerging markets and global reallocation of capital
  

What kind of ancillary business activities can be carried out at GIFT City?

Ancillary Services

Under the IFSCA regulatory framework, ancillary services are defined in relation to the broader financial ecosystem in the International Financial Services Centre (IFSC) and refer to support services that are connected with or assist in the provision of financial products, financial services, and financial institutions as envisaged under the IFSCA Act, 2019. In other words, these are services that directly or indirectly aid, help, assist, strengthen or are attendant upon financial activities permitted in the IFSC. 

An activity qualifies as an ancillary service if it directly or indirectly supports a financial product, financial service, or financial institution permitted under Section 3 of the IFSCA Act, 2019, and does not involve dealing in, managing, holding, or advising on financial products in its own right.

Permissible Ancillary Activities

Ancillary services refer to those that directly or indirectly support, aid, or strengthen the BFSI industry. These include:

Legal, compliance and governance support

• Regulatory compliance advisory
• Legal support (non-advocacy)
• Corporate secretarial services
• Policy drafting, regulatory filings, and governance documentation
  
  

Accounting, audit and tax support

• Accounting and bookkeeping
• Financial reporting support
• Audit support services
• Tax advisory and compliance services relating to IFSC operations
  
  

Professional and management consulting

• Business and management consulting
• Operational advisory
• Process design and transformation support
• Risk, control, and internal governance advisory (non-decision-making)
  
  

Administration and back-office services

• Fund administration and operational support
• Middle-office and back-office services
• Reporting, reconciliations, and operational coordination
• Support services to asset managers, insurers, banks, and fintechs
  
  

Trusteeship and fiduciary support (non-discretionary)

• Trustee and fiduciary support services
• Administrative trusteeship functions
• Oversight and reporting support (without investment discretion)
  
  

Any other service approved by IFSCA

• The Authority retains discretion to approve additional services where:
  • the service supports IFSC financial activity, and
  • it does not amount to a regulated financial service itself
    
    

What ancillary service providers cannot do

Ancillary registration does not permit the provider to:

• Deal in securities or financial products
• Manage assets or exercise investment discretion
• Provide investment advice or client-facing financial recommendations
• Hold client money or assets
• Act as an intermediary in financial transactions

If an activity crosses into any of the above, a separate financial services licence is required.

Ancillary service providers operating in the IFSC are required to be registered with the International Financial Services Centres Authority, rather than licensed as financial institutions. While they do not fall within the prudential regulatory perimeter applicable to banks, fund managers, insurers, or other regulated financial service providers, they remain subject to the IFSCA’s expectations on fitness and propriety, governance standards, and conduct of business.

Prudential capital thresholds are not imposed on ancillary service providers. Instead, these entities are required to confine their operations to well-defined, non-financial support functions and to ensure that their activities do not, in substance or effect, amount to the carrying on of regulated financial services. They are also expected to put in place appropriate arrangements to identify, manage, and mitigate conflicts of interest, and to evidence a level of AML and CFT understanding and controls that is commensurate with the scope, complexity, and risk profile of the services they deliver within the IFSC.

Are voice broking and ship broking activities considered ancillary services within the IFSCA framework in GIFT City?

Voice broking and ship broking are not expressly listed as standalone ancillary activities, but they may fall within the scope of permissible ancillary services if they meet the IFSCA’s core test for ancillary activity.

Under the IFSCA framework, an activity qualifies as ancillary only where it supports or facilitates a financial product, financial service, or financial institution regulated under Section 3 of the IFSCA Act, without itself becoming a regulated financial service.

Voice broking

Voice broking can be treated as an ancillary service in the IFSC only where:

• The broking activity is introducer-based or information-facilitation based
• The provider does not deal, trade, or execute transactions
• No discretion, pricing authority, or transaction control is exercised
• The broker does not intermediate financial contracts (e.g. derivatives, securities, insurance)

Examples that may be acceptable:

• Introducing counterparties for OTC commodity, freight, or FX-related transactions
• Relaying market information or facilitating communications between parties
• Supporting trade discovery where execution occurs elsewhere by regulated entities

If the voice broking crosses into execution, negotiation of binding terms, or financial intermediation, it would no longer qualify as ancillary and would require a separate financial services authorisation, which the IFSCA may or may not permit depending on the asset class.

Ship broking

Ship broking may fall within ancillary services where it is:

• Supportive of leasing, financing, insurance, or trade-finance activity conducted in the IFSC
• Limited to advisory, introducer, or facilitation roles
• Clearly separated from asset ownership, chartering risk, or principal trading

This is particularly relevant because the IFSCA explicitly permits ship leasing and related financial activities in the IFSC. Where ship broking services are ancillary to ship leasing, financing, or insurance structures, the IFSCA has shown openness to treating them as eligible ancillary activities, subject to approval.

However, ship broking would not qualify as ancillary if it involves:

• Acting as principal or agent in chartering contracts
• Commercial ship trading unrelated to financial services
• Activities regulated under maritime or commercial laws rather than financial regulation
  
  

Can a GIFT City–based Ancillary Service Provider serve clients in mainland India?
Yes, an ancillary service provider operating from the IFSC may extend its services to clients located in mainland India, but this ability is conditional rather than automatic. Such cross-border engagement is permissible only where all of the following requirements are satisfied together:

• The activity clearly falls within the definition of an “ancillary service” under the IFSCA framework
• The service does not, by its nature or outcome, constitute a regulated financial activity under Indian law
• The arrangement complies with applicable FEMA provisions, as well as Indian direct and indirect tax requirements governing cross-border services

While the IFSCA framework does not bar India-based clients, it equally does not disapply India’s domestic regulatory regime. There is no overarching exemption simply because the service is delivered from an IFSC entity.

In practice, the IFSCA adopts a substance-based, rather than geography-based, lens. The relevant question is not where the provider is located, but how the activity would be characterised if performed within India. The analysis therefore turns on two key considerations:

• • Would the same activity, if carried out directly in India, require authorisation or registration with an Indian regulator?
  • If so, an IFSC ancillary registration does not replace or bypass that requirement.

• If not, the service may be provided from GIFT City, subject to ongoing compliance with FEMA and applicable tax laws.

The following are commonly accepted as permissible when provided from the IFSC to Mainland India:

• • Legal advisory (non-litigation, non-representation)
  • Compliance and governance advisory
  • Policy drafting and regulatory interpretation
  • Accounting, bookkeeping, and tax advisory
  • Management consulting and operational advisory
  • Back-office, middle-office, and shared services

• Group support and global capability centre functions

These are treated as professional or support services, not financial services.

An IFSC ancillary service provider cannot use its IFSC status to:

• Provide investment advice to Indian residents
• Deal in or intermediate securities, derivatives, insurance, or credit products in India
• Execute, negotiate, or structure financial transactions for Indian clients
• Hold client money or assets relating to Indian transactions
• Perform any activity that would require SEBI, RBI, IRDAI, or other Indian regulatory authorisation

If the activity falls within an Indian regulator’s perimeter, a separate Indian licence is required, regardless of IFSC registration.

It should also be noted that services to Mainland India may be invoiced in foreign currency, but:

• GST implications must be assessed (export vs domestic supply)
• Place of supply rules apply
• Transfer pricing rules apply for group entities
  

• • IFSC status does not automatically make all India-facing services “exports”

• Use of INR is restricted and generally routed through permitted SNRR mechanisms for expenses, not revenue
  
  

Can an Ancillary Service Provider based in GIFT City provide services to clients outside India?

Ancillary service providers registered with the International Financial Services Centres Authority are expressly permitted to deliver services to non-resident clients, overseas group entities, and foreign financial institutions, provided the services remain ancillary in nature. There is no geographic restriction under the IFSCA framework that limits ancillary services to India-only or IFSC-only clients.

The regulatory test applied by the IFSCA is functional rather than territorial. As long as the activity supports financial products, services, or institutions and does not itself constitute a regulated financial service, it may be provided to clients located outside India.

What is typically permitted for overseas clients

In practice, ancillary service providers commonly service overseas clients in areas such as legal and regulatory advisory, compliance and governance support, accounting and tax services, management consulting, fund and operational administration, middle- and back-office support, and shared or global capability centre functions. These services are treated as professional or support services delivered from the IFSC into international markets.

Such arrangements align squarely with the IFSC’s policy objective of positioning GIFT City as a base for export of financial and professional services.

Key conditions that still apply

While overseas servicing is permitted, the following boundaries remain critical:

First, the ancillary service provider must not cross into regulated financial activity. This means it cannot provide investment advice, deal in financial products, execute or negotiate transactions, hold client money or assets, or otherwise perform activities that would require a financial services licence in the client’s home jurisdiction or under Indian law.

Second, services must be delivered in accordance with the foreign currency framework of the IFSC. Fees are typically invoiced and settled in permissible foreign currencies through IFSC banking units.

Third, the provider must comply with applicable cross-border legal, tax, and data requirements, including contractual enforceability, sanctions screening, AML awareness proportionate to its role, and any client-jurisdiction requirements that may apply to professional services.

What kind of legal structures are available for Ancillary Service Providers in GIFT City?

There are four possible legal structures available for ancillary service providers.

1. Company incorporated under the Companies Act, 2013 

The most widely used structure for ancillary service providers is a company limited by shares, incorporated under the Companies Act, 2013 and registered as an IFSC unit.

This structure is generally preferred by the IFSCA because it provides a clear separation between the entity and its shareholders, a well-understood governance framework (Board, directors, statutory filings), ease of demonstrating fit-and-proper status of shareholders and management, and scalability for multi-service or multi-jurisdictional operations.

Both private limited and public limited companies are permitted, although private limited companies are far more common for professional and advisory services.

This is the default structure used by:

• Legal and compliance advisory firms
• Consulting and management advisory firms
• Fund administration and back-office providers
• Group shared-service or capability centres

2. Limited Liability Partnership (LLP)

A limited liability partnership formed under the LLP Act, 2008 can also be used for operations in the IFSC and is a structure many professional firms naturally prefer. It works best where the business is built around individual partners rather than a corporate hierarchy, where commercial arrangements between principals need flexibility, and where the firm’s output is advisory or opinion-led rather than transactional.

From the regulator’s standpoint, the form itself is not the deciding factor. What matters is how the LLP is organised and run. The IFSCA will expect partners—particularly designated partners—to meet basic fitness and integrity standards. It will also look for clear internal arrangements that explain who makes decisions, how conflicts are handled, and who is responsible for ongoing compliance and regulatory interaction. These responsibilities must be expressly allocated; informal understandings are not sufficient.

In practice, this structure is most often seen among consulting firms, accounting and tax practices, and specialist compliance or risk advisers that operate as professional partnerships rather than scaled financial institutions.

Branches of foreign entities

Instead of incorporating locally, some overseas firms choose to establish a branch presence in the IFSC for ancillary activities, subject to regulatory approval. This route is commonly used by international consultancies, global advisory networks, and multinational groups that want a direct operating footprint without creating a separate legal entity.

That said, branches tend to attract closer supervisory attention. The IFSCA typically examines how accountability is retained when senior management sits outside India, how control is exercised over the IFSC operation, and where responsibility ultimately lies between the head office and the local unit. For this reason, approvals are usually conditional on having a clearly identified local officer in charge, tightly defined limits on what the branch may do from the IFSC, and formal governance and reporting lines back to the parent organisation.

4. Subsidiary of an Indian or foreign parent

An ancillary service provider may also operate as a wholly owned subsidiary of an Indian or overseas group, incorporated in India and registered as an IFSC unit.

This structure is commonly used where the IFSC entity forms part of a wider regional or global platform, services are provided primarily to group entities or group clients, or the parent entity wishes to ring-fence IFSC operations.

From the regulator’s perspective, this is generally viewed favourably, provided that the subsidiary has adequate substance and decision-making capability, the scope of services is clearly defined, and conflicts between group and third-party work are addressed.

What currencies are permitted for transactions?

All units operating in the International Financial Services Centre (IFSC) at GIFT City are required to conduct their business activities in permissible foreign currencies, other than the Indian Rupee. To this end, such units are required to open and maintain foreign currency accounts with banks operating within the IFSC at GIFT City.

Financial institutions established in the IFSC, being treated as persons resident outside India for exchange-control purposes, are permitted to open and maintain a Special Non-Resident Rupee (SNRR) account with a bank in India, outside the IFSC, in accordance with the Foreign Exchange Management (Deposits) Regulations, 2016. Such SNRR accounts may be used solely for meeting expenses denominated in Indian Rupees and incurred outside GIFT City and the IFSC.

The International Financial Services Centres Authority has notified the following specified foreign currencies as permissible for undertaking business in the IFSC at GIFT City:

US Dollar (USD), Euro (EUR), Pound Sterling (GBP), Japanese Yen (JPY), Swiss Franc (CHF), Singapore Dollar (SGD), Australian Dollar (AUD), Canadian Dollar (CAD), Hong Kong Dollar (HKD), UAE Dirham (AED), Russian Rouble (RUB), Swedish Krona (SEK), Danish Krone (DKK), Norwegian Krone (NOK), and New Zealand Dollar (NZD).

What are the minimum personnel requirements for an ancillary service provider in GIFT City?

The IFSCA (TechFin and Ancillary Services) Regulations, 2025 do not approach staffing through fixed numerical thresholds. There is no rule that requires an ancillary service provider to employ a prescribed minimum number of people. Instead, the regulatory shift has been toward accountability, competence, and demonstrable operational substance.

In practical terms, the Authority is less concerned with how many individuals appear on an organisation chart and more focused on whether responsibility for the business is clearly anchored in identifiable, suitably experienced individuals. The framework therefore prioritises senior appointments and governance over headcount.

Every ancillary service provider is expected to identify two core roles. One is a Principal Officer, who carries overall responsibility for the conduct and management of the ancillary services activity within the IFSC. The second is a Compliance Officer, responsible for overseeing regulatory compliance, maintaining records, managing internal reporting, and ensuring that applicable legal and procedural requirements are actually implemented rather than remaining theoretical.

These roles are not intended to be nominal. Both officers are expected to be engaged on a full-time basis and to operate from the IFSC unit itself. The IFSCA applies fit-and-proper standards to these appointments, typically looking for relevant professional background and a minimum level of hands-on experience—commonly around three years—in areas connected to the services being offered.

Beyond these baseline roles, staffing expectations scale with the business model. Where the scope or complexity of services increases, the Authority expects the firm’s personnel profile to reflect that reality. Senior management must collectively demonstrate sufficient expertise, and the overall staffing level must be credible when viewed against the nature, volume, and risk profile of the activities proposed.

When assessing an application, the IFSCA therefore looks for evidence of real operating capability. The question it asks is not whether the applicant meets a numerical staffing test, but whether the firm, as structured and resourced, can reasonably be expected to deliver its permitted ancillary services in a controlled and accountable manner.

Key Review Criteria:

1. Personnel and Expertise:

• For Legal or Compliance Services: The Authority expects to see qualified professionals with relevant experience.
• For Accounting, Audit Support, or Taxation: Staff must be suitably qualified, with relevant experience in the field. 

2. Organisational Structure and Governance:

The regulator assesses the firm’s operational structure, internal reporting lines, and decision-making arrangements. 

3. Genuine On-Ground Presence:

The IFSCA requires evidence that the provider actually operates from the IFSC on an ongoing basis. 

The IFSCA has further emphasised the importance of clear accountability for key roles. In particular, the Principal Officer and Compliance Officer are expected to be dedicated to the IFSC unit and are not generally permitted to be shared across multiple IFSC entities, unless approved by the Authority. The IFSCA has, however, recognised that these roles may be performed by professionals engaged on a non-employment basis, such as consultants, provided that such individuals are based in the IFSC and exclusively dedicated to the relevant entity.

What are the key tax benefits available to firms in GIFT City?

The tax framework in GIFT City is best understood as a set of targeted concessions rather than a standalone tax regime. Entities operating in the IFSC remain within India’s income-tax system, but specific incentives are layered on top to make international financial activity viable onshore. The focus is on foreign-currency business, cross-border services, and India-linked offshore activity that would otherwise sit outside the country.

One of the central incentives is the income-tax holiday available to IFSC units. Eligible entities can claim a full exemption from income tax for twenty consecutive years, chosen by the taxpayer, within a broader twenty-five-year window. This flexibility allows firms to defer the exemption until operations stabilise or profitability improves, rather than being forced to use it from day one. The exemption applies only to income earned from approved IFSC activities and does not extend to unrelated or domestic operations.

Capital markets activity in the IFSC benefits from a separate set of concessions. Capital gains arising from transfers of specified securities listed on IFSC exchanges are exempt from tax, subject to prescribed conditions. In addition, transactions executed on IFSC exchanges are not subject to securities transaction tax or commodities transaction tax. For trading desks, funds, and institutional investors, this materially reduces transaction costs and aligns the IFSC more closely with offshore exchanges.

The regime also addresses cross-border funding efficiency. Interest payments made by IFSC units to non-resident lenders are subject to concessional withholding tax rates, improving the economics of offshore borrowing. This is particularly relevant for banking units, leasing companies, and treasury centres that rely on international debt markets.

For funds established in the IFSC, the tax framework is designed to minimise leakage at the fund level. Certain funds benefit from tax-neutral or pass-through treatment, and eligible non-resident investors may be exempt from capital gains tax on transfers of fund units, subject to conditions. This makes GIFT City a workable domicile for India-focused offshore funds without forcing managers or investors into complex multi-jurisdictional structures.

Indirect taxes are also addressed. IFSC units are generally exempt from GST on services received for authorised operations, and transactions carried out on IFSC exchanges are similarly relieved from indirect tax. Where services are provided to overseas clients, they are typically treated as exports for GST purposes, provided the statutory conditions are met. This reduces the operating cost base for firms using the IFSC as an export hub for financial or professional services.

Finally, for tax and exchange-control purposes, IFSC units are largely treated as non-residents. This classification supports the foreign-currency operating model and complements the direct-tax incentives by allowing greater flexibility in cross-border structuring, treasury activity, and group support arrangements.

Summary of key tax benefits in GIFT City

Area	Tax treatment in GIFT City (IFSC)
Income tax	100% income-tax exemption for any 20 consecutive years out of a 25-year block, for eligible IFSC income
Capital gains	Exemption on capital gains from transfer of specified securities listed on IFSC exchanges (subject to conditions)
STT / CTT	No securities transaction tax or commodities transaction tax on IFSC exchange transactions
Withholding tax	Concessional withholding tax rates on certain interest payments to non-residents
Funds	Tax-neutral / pass-through treatment for eligible funds; capital gains exemptions for certain non-resident investors
GST / indirect tax	GST exemption on services received for authorised operations; IFSC exchange transactions exempt
Export of services	Services provided to overseas clients generally treated as exports, subject to GST conditions
Residency status	IFSC units treated as non-residents for tax and exchange-control purposes

 

How much does it cost to set up an Ancillary Service Provider in GIFT City?

Cost of setting up an Ancillary Service Provider in GIFT City (IFSC)

The cost of establishing an ancillary service provider in GIFT City depends primarily on the scope of activities proposed and the level of operational substance maintained in the IFSC. While ancillary service providers are subject to a lighter regulatory regime than financial institutions, GIFT City is not a low-cost jurisdiction. It is designed for credible, internationally oriented businesses, and the cost structure reflects that objective.

Indicative figures below are based on IFSCA’s notified fee schedule for ancillary services, combined with prevailing market practice for incorporation, SEZ onboarding, and operational setup. These figures should be read as guidance rather than fixed quotations.

1. IFSCA application, registration, and supervisory fees (official)

Ancillary service providers are registered (not licensed) with the IFSCA. Fees are levied on a per-activity basis, which means that entities registering for multiple ancillary activities must pay fees separately for each activity.

For each ancillary service activity, the applicable fees are:

• Application fee (one-time): USD 1,000
  
  
• Registration fee (one-time, post approval): USD 2,500
  
  
• Annual supervisory fee: USD 2,500 per year
  The annual supervisory fee consists of a flat fee of USD 2,500 per year (payable on a pro-rata basis in the year of registration and in full for each subsequent financial year) plus a conditional turnover-linked fee. No conditional fee applies if annual turnover is below USD 1 million; it then rises in slabs up to approximately USD 10,000–12,500 for higher turnover levels.
•  

. .

2. Capital or net-worth requirements

The IFSCA does not prescribe any minimum capital or net-worth requirement for ancillary service providers.

That said, applicants are expected to demonstrate adequate financial standing to support their proposed activities. In practice, most ancillary service providers incorporate with a modest paid-up capital to demonstrate substance and operational credibility, even though this is not mandated by regulation.

Typical market practice ranges from USD 10,000 to 30,000 equivalent in paid-up capital, depending on the nature of services and group backing.

3. Entity incorporation and SEZ onboarding costs (one-time)

Ancillary service providers must incorporate an Indian entity (company or LLP) and complete SEZ formalities applicable to IFSC units.

Typical one-time costs include:

• Company or LLP incorporation: USD 1,000 – 2,500
  
  
• SEZ processing, PLOA, bonding, and documentation: USD 2,000 – 4,000
  

Indicative total one-time setup cost:

USD 3,000 – 6,500

4. Office space and physical presence

A physical presence in GIFT City is expected, although ancillary service providers are permitted to operate with relatively modest space compared to regulated financial institutions.

Indicative costs:

• Grade-A office rent: USD 12 – 18 per sq ft per month
  
  
• Typical starter office (500–1,000 sq ft): USD 8,000 – 18,000 per year
  
  
• Fit-out and basic furnishing (one-time): USD 10,000 – 30,000
  

Managed or shared office arrangements may be acceptable at the initial stage, provided the entity has dedicated seating and staff based in the IFSC.

5. Professional and advisory fees (one-time)

Ancillary service registrations are relatively straightforward compared to regulated financial licences.

Typical advisory costs are:

• Single-activity ancillary registration: USD 5,000 – 10,000
  
  
• Multi-activity or cross-border scope registrations: USD 10,000 – 15,000
  

These fees generally cover activity scoping, application drafting, governance descriptions, and regulatory interaction.

6. Ongoing annual operating costs

Once operational, an ancillary service provider should budget for the following recurring costs:

• IFSCA annual supervisory fee: USD 1,500 per activity
  
  
• Audit and accounting: USD 4,000 – 8,000
  
  
• Compliance support (light-touch): USD 5,000 – 12,000
  
  
• Staff and local substance: USD 30,000 – 80,000+
  
  
• Technology, systems, and administration: USD 5,000 – 15,000
  

Indicative minimum annual run-rate:

USD 45,000 – 120,000, depending on scale and staffing

Summary table – Ancillary Service Provider costs in GIFT City

Cost category	Indicative cost (USD)
IFSCA application fee (per activity)	1,000 (one-time)
IFSCA registration fee (per activity)	1,500 (one-time)
IFSCA annual supervisory fee (per activity)	1,500 per year
Incorporation + SEZ setup	3,000 – 6,500 (one-time)
Office rent (annual)	8,000 – 18,000
Fit-out and furnishing	10,000 – 30,000 (one-time)
Advisory and setup support	5,000 – 15,000 (one-time)
Ongoing annual operating costs	45,000 – 120,000

“All cost figures are indicative only and are based on applicable IFSCA regulations, publicly available fee schedules, and prevailing market practice as of 2026. Actual costs may vary depending on the nature, scale, and regulatory classification of the business.”

How can AxiomSync help you establish and maintain your presence in the GIFT City?

AxiomSync is a registered Ancillary Service Provider with the International Financial Services Centres Authority (IFSCA) and forms part of the 10 Leaves Group, a cross-jurisdictional legal, compliance, and financial advisory platform headquartered in Dubai, UAE. The group maintains established regulatory and operational capabilities across DIFC, ADGM, Luxembourg, Mauritius, and India, enabling it to support clients with international structures that intersect multiple regulatory regimes.

With a team of over 50 specialised professionals spanning compliance, legal advisory, risk management, regulatory licensing, and operational setup, AxiomSync provides end-to-end support to firms seeking to establish, license, and operate businesses from GIFT City IFSC. Its services are designed to align with the IFSCA regulatory framework while remaining practical, implementation-focused, and scalable.

1. Jurisdictional assessment and structuring advisory

Before incorporation or licensing, AxiomSync supports clients in determining whether GIFT City is the appropriate jurisdiction for their proposed business model. This includes comparative analysis against other international financial centres such as DIFC and ADGM, assessment of regulatory fit, tax considerations, and operational substance requirements.

Services include:

• Business-model suitability assessment for GIFT City
• Regulatory perimeter analysis under IFSCA regulations
• Cross-jurisdiction structuring involving DIFC, ADGM, Luxembourg, or Mauritius
• Holding, fund, treasury, or platform structuring for India-linked international activity

This upfront advisory ensures that clients enter the IFSC with a structure that is viable both commercially and regulatorily.

2. Entity formation and SEZ setup support

AxiomSync manages the complete entity setup process within GIFT City, coordinating incorporation, SEZ approvals, and statutory registrations through the SWIT portal and related authorities.

This includes:

• Assistance with office identification and SEZ documentation
• Provisional Letter of Approval (PLOA) support
• Company or LLP incorporation in India for IFSC purposes
• Execution of bond-cum-legal undertaking with SEZ and customs authorities
• GST and Import Export Code (IEC) registrations, where applicable

The focus is on ensuring that legal formation, SEZ compliance, and regulatory readiness progress in parallel.

3. IFSCA licensing and regulatory authorisation

As an IFSCA-registered Ancillary Service Provider, AxiomSync provides hands-on regulatory licensing support across all major IFSC business categories.

This includes assistance with:

• IFSC Banking Unit-related advisory (non-bank participants and group interfaces)
• Finance Company registrations (including lending, trade finance, factoring, forfaiting, leasing, ITFS participation)
• Fund Management Entity (FME) registration and fund launches
• Capital Market Intermediary licensing (brokers, advisers, custodians, distributors)
• Payment Services authorisation and sandbox participation
• Insurance and reinsurance office applications

Support covers preparation of regulatory applications, business plans, financial projections, governance frameworks, and ongoing engagement with the IFSCA through the application lifecycle.

4. Governance, compliance, and AML framework design

AxiomSync designs and implements IFSCA-aligned governance and compliance frameworks tailored to the client’s regulatory category and risk profile.

Services include:

• Drafting of compliance manuals and regulatory policies aligned with applicable IFSCA regulations
• AML, CFT, and KYC frameworks compliant with IFSCA AML Guidelines
• Risk management frameworks and internal control policies
• Board and management governance structures
• Outsourcing, data protection, and business continuity policies

These frameworks are designed not just for approval, but for actual operational use, inspection readiness, and scalability.

5. Ongoing compliance and regulatory support

Beyond licensing, AxiomSync provides ongoing compliance support to IFSC entities operating in GIFT City, either on a retained or modular basis.

This includes:

• Outsourced or co-sourced Compliance Officer and AML Officer support
• Regulatory reporting and filing assistance
• Support during IFSCA supervisory reviews and inspections
• Ongoing monitoring of regulatory changes and impact assessments
• Periodic compliance health checks and gap analyses

This allows clients to maintain regulatory continuity without over-building in-house teams in the early stages.

6. Cross-border legal and regulatory coordination

Many GIFT City structures sit alongside entities in other jurisdictions. Through the 10 Leaves Group, AxiomSync coordinates cross-border legal and compliance alignment across DIFC, ADGM, Luxembourg, Mauritius, and India.

This includes:

• Group-level compliance and governance harmonisation
• Regulatory mapping across multiple jurisdictions
• Support for India-linked global fund and treasury structures
• Assistance with regulator-to-regulator consistency and disclosures

This capability is particularly relevant for multinational groups, fund sponsors, family offices, and fintech platforms operating across regions.

7. Operational readiness and scaling support

Once licensed, AxiomSync assists clients in moving from regulatory approval to live operations and growth.

This includes:

• Support with IFSC banking relationships and operational accounts
• Assistance with onboarding service providers and vendors
• Regulatory input on new products, services, or geographic expansion
• Preparation for audits, investor due diligence, and counterparties

The objective is to ensure that IFSC entities are not only compliant on paper, but operationally credible and scalable.

Positioning within the GIFT City ecosystem

Through its registration with the IFSCA and its integration within the wider 10 Leaves Group, AxiomSync operates as a long-term advisory partner rather than a one-time setup provider. Its role is to bridge regulatory intent with commercial reality, helping clients navigate the IFSC framework with clarity, discipline, and foresight.