Setting up Family Investment Funds in GIFT City

GIFT City’s IFSC is India’s onshore jurisdiction for international financial services, and AIFs here are managed through regulated Fund Management Entities (FMEs) under the IFSCA framework.

FMEs are authorised under the IFSCA (Fund Management) Regulations, 2022 to run AIFs and related strategies, including venture capital, private equity, credit, listed strategies, REIT/InvIT and family investment structures.

FMEs are classified into Authorised, Registered (Non‑Retail) and Registered (Retail) categories, each with defined permissible activities and minimum net‑worth requirements from USD 75,000 to USD 1,000,000.

The GIFT City AIF ecosystem is primarily designed for non‑resident investors and offshore capital pools—institutional investors, family offices, NRIs/OCIs and foreign funds—operating as an international asset management platform from within India.

Access to mainland Indian investors is restricted to permitted outbound routes such as the Liberalised Remittance Scheme (LRS) and other FEMA‑compliant frameworks, unless separate onshore approvals (e.g. SEBI) are obtained.

FMEs in GIFT City typically operate in permitted foreign currencies via IFSC banking channels, appoint an IFSCA‑registered custodian for AIF assets (with limited exceptions), and are expected to maintain real operational substance in the IFSC.

Set‑up costs combine IFSCA fees (USD 2,500 application, USD 5,000–10,000 registration, ~USD 2,000 annual) with capital, SEZ onboarding, office and key personnel, positioning GIFT City as an institutional‑grade fund domicile rather than a light‑touch, low‑substance option.

AxiomSync, as an IFSCA‑registered ancillary service provider within the 10 Leaves Group, helps sponsors design, license and operate GIFT City AIF platforms end‑to‑end—from jurisdictional and structuring advice through entity formation, FME/AIF applications, governance and compliance frameworks, to ongoing regulatory support and cross‑border coordination with DIFC, ADGM, Luxembourg and Mauritius structures.

What is GIFT City?

Why Setup 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 are Family Investment Funds?

Family Investment Funds (FIFs) in GIFT City are an IFSCA‑recognised vehicle for families to manage and grow their wealth within the IFSC. They are specifically designed for pooling money from a single family, defined as lineal descendants of a common ancestor, including their spouses and children.

IFSCA has created a tailored framework for FIFs in the GIFT IFSC. The focus is on enabling FIFs to function exclusively as investment vehicles, rather than as broader family‑needs or succession‑planning structures.

What are the eligibility conditions for setting up family investment funds in GIFT City?

FIFs are permitted to operate as self‑managed vehicles, eliminating the need for a separate fund manager entity. This significantly reduces administrative overhead as well as associated costs and compliance requirements compared to a full FME licence.

Eligible structures

A Family Investment Fund can be set up as:

a company.
a trust (contributory trust only, with conditions ensuring identifiable beneficiaries, determinable shares and transparency in contributions).
an LLP.
or any other legal form approved by IFSCA.

What instruments can a Family Investment Fund invest in?

FIFs can invest across a wide range of assets, including (but not limited to):

Securities:
- Unlisted entities
- Listed / traded securities on IFSC, Indian or foreign exchanges
Money market instruments and debt securities:
- Securitised debt instruments
- Asset‑backed or mortgage‑backed securities
Other investment schemes:
- Schemes set up in the IFSC, in India or in foreign jurisdictions
Derivatives, including commodity derivatives
Units of mutual funds and alternative investment funds in India and abroad
Limited liability partnerships and physical assets such as real estate, bullion or art, etc.
Other securities or assets, whether financial or physical, as permitted by IFSCA.

Importantly, FIFs are exempt from the full set of organisational and legal‑form requirements applicable to Fund Management Entities (FMEs), but they are still subject to a minimum size and residency framework.

What are the minimum requirements for a Family Investment Fund?

An FIF must maintain a minimum corpus of USD 10 million within three years of registration. FIFs can be structured as either open‑ended or close‑ended vehicles.

What are the primary benefits of setting up Family Investment Funds in GIFT City?

Diversified investment options, including securities, real estate, bullion, art and other assets under LRS or ODI‑compatible structures.
Access to foreign currency loans from GIFT City banks at competitive rates, lowering funding costs.
Ability to aggregate and maximise LRS limits across family members.
Tax benefits, including the IFSC income‑tax and GST concessions.
Convenience for HNIs, who can consolidate family wealth in a globally aligned yet India‑linked platform.
Regulated access to fund structures, reducing FEMA‑related risk associated with unregulated foreign vehicles.

What are the tax and regulatory benefits for FIFs in GIFT City?

While FIFs do not use the AIF categorisation, they sit within the same IFSC tax and regulatory ecosystem, and families therefore benefit from many of the same concessions in a more focused, family‑only wrapper. Here are some key benefits:

FIFs treated as regulated IFSC vehicles
Family Investment Funds in GIFT City are established under a dedicated IFSCA framework, giving families a recognised, on‑shore/off‑shore structure for pooling and managing wealth, rather than relying on unregulated foreign vehicles.

Use of IFSC tax incentives
Where the FIF is housed in an IFSC entity that qualifies for the IFSC income‑tax holiday, eligible business income can benefit from the same concessions that apply to other IFSC units (for example, a 10‑year income‑tax exemption within a broader eligibility period, subject to conditions).

Favourable overseas investment treatment for Indian contributors
Under the Overseas Investment (OI) Rules, 2022, contributions by Indian residents or Indian entities into FIFs in the IFSC are treated as Overseas Portfolio Investment (OPI), which is generally more flexible and less onerous than direct overseas investment routes.

Access to IFSC markets without domestic frictions
FIFs can invest in securities listed on IFSC exchanges and access other IFSC products without domestic STT/CTT frictions that apply to onshore exchanges, and they operate within the wider IFSC environment of GST and capital‑gains concessions on specified securities.

Simplified management structure
Unlike AIFs, FIFs can be structured as self‑managed pooling vehicles, without a separate FME, which reduces regulatory layers and ongoing compliance cost while still operating under an IFSCA‑approved framework.

Summary of key tax benefits in GIFT City

Area	Tax treatment for GIFT City FIFs and their platforms
Income tax	Where the FIF is housed in an eligible IFSC entity, the platform can access the IFSC income‑tax holiday (100% exemption on specified business income for a chosen 10‑year period within a broader eligibility window), allowing the family to align the benefit with the build‑out of the FIF structure.
Capital gains	Capital gains on transfers of specified securities listed on IFSC exchanges can be exempt from tax, subject to conditions. FIFs that deploy into listed instruments through IFSC markets can therefore reduce portfolio‑level tax leakage.
STT / CTT	Transactions executed on recognised IFSC exchanges are not subject to Securities Transaction Tax (STT) or Commodities Transaction Tax (CTT), lowering dealing costs where the FIF trades listed securities or derivatives through the IFSC.
Withholding tax	Certain interest payments made by IFSC units to non‑resident lenders benefit from concessional withholding tax rates, which can improve economics where the FIF (or its investment vehicles) uses foreign‑currency borrowing or structured finance.
Family vehicle / investors	The FIF framework allows a single, regulated vehicle to pool family capital and access IFSC tax concessions, instead of spreading investments across multiple individual LRS or ODI positions, simplifying monitoring and potentially improving overall tax efficiency for the family as a whole.
GST / indirect tax	IFSC units are generally exempt from GST on services received for authorised operations, and transactions on IFSC exchanges are relieved from indirect tax, reducing the running and transaction cost base of FIF investment activity.
Export of services	Where the FIF (or its associated family office unit) provides portfolio or treasury services to family members resident outside India, those services can in many cases be treated as exports for GST purposes, and may be zero‑rated when statutory conditions are met.
Residency status	FIF platforms in the IFSC are treated as Indian residents for tax but as overseas units from a FEMA perspective, while IFSC units more broadly are regarded as non‑residents for exchange‑control purposes. This dual treatment underpins the foreign‑currency operating model and facilitates cross‑border investment structures for families.

What is the residential status of Family Investment Funds?

An FIF is treated as an Indian resident for tax purposes, while being regarded as an overseas resident / offshore unit from a FEMA perspective. Any investments flowing from India into the FIF are regulated by FEMA, and any onward investments made by the FIF are regulated under the FME / FIF regulatory framework issued by IFSCA.

Under the Overseas Investment (OI) Rules, 2022, contributions by Indian residents or Indian entities into FIFs in IFSCs are treated as Overseas Portfolio Investment (OPI), which offers regulatory advantages compared to direct overseas investment routes.

What legal structures can FIFs use in GIFT City?

In GIFT City’s IFSC, Family Investment Funds are not confined to a single legal form. Subject to the IFSCA framework for FIFs, a family can typically establish its FIF using one of the following structures:

Company structure

The FIF is set up as a company incorporated in the IFSC, usually as a company limited by shares.
Family members (and, where relevant, family entities) subscribe to shares or units issued by the company.
This format works well where the family wants a familiar corporate governance model, with a board, formal reporting, and the potential to create different share classes for different branches of the family.

Contributory trust structure

The FIF can be constituted as a contributory trust, with family members contributing capital and receiving units or beneficial interests in return.
IFSCA requires that such trusts have identifiable beneficiaries, determinable shares and transparent contribution records, so the vehicle functions clearly as an investment pool rather than as a discretionary family trust.
This structure tends to suit families already comfortable with trust‑based arrangements or those using trusts in their broader estate and asset‑holding structures.

Limited Liability Partnership (LLP) structure

An FIF may also be established as an LLP, with family members (or family entities) admitted as partners.
This can be attractive where the family prefers a partnership‑style governance and profit‑sharing model, with flexibility in how capital accounts and distributions are structured.

Other IFSCA‑approved forms

In addition to companies, contributory trusts and LLPs, IFSCA may approve other legal forms that meet its requirements for ownership clarity, ring‑fencing of assets and regulatory oversight.

Across all these structures, the FIF is a self‑managed pooling vehicle: the family uses the chosen wrapper (company, trust or LLP) as its investment fund, rather than appointing a separate external FME as is required for most AIFs.

In practice, the choice between these forms is usually driven by:

the family’s familiarity with companies, trusts or partnerships;
tax and succession‑planning considerations in India and key overseas jurisdictions; and
how the FIF is intended to sit alongside existing family holding companies, family offices or offshore structures.

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).

How much does it cost to set up a Family Investment Fund in GIFT City?

The cost of establishing a Family Investment Fund in GIFT City is driven by three main elements:

the legal form chosen (company, contributory trust or LLP)
the minimum corpus of USD 10 million to be built up within three years of registration
the level of physical and operational presence the family chooses to maintain in the IFSC.

Because FIFs are self‑managed vehicles under a dedicated IFSCA framework, they avoid the full cost of a separate FME licence and multiple scheme filings, but they are still expected to have real substance and to comply with IFSC and SEZ requirements.

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

These are the core regulatory fees for an FIF licence in GIFT City:

Particulars	Fees (USD)
Application fee	2,500
Registration fee	15,000
Annual fee	2,000

These figures are at the FIF level; there is no separate “per‑scheme” filing fee as with AIFs.

2. Entity incorporation and SEZ onboarding (one‑time)

To establish an FIF, the family must set up the underlying entity (company, trust or LLP) in the IFSC and complete SEZ onboarding. Indicative one‑time costs are:

Incorporation and structuring of the IFSC entity: USD 2,000 – 5,000
SEZ approvals, Provisional Letter of Allotment (PLOA) and related documentation: USD 3,000 – 6,000

Indicative total, one‑time (excluding capital contributions into the FIF): USD 5,000 – 11,000.

3. Office space and operational presence

Setting up an FIF in GIFT City mandates a physical office. This includes securing space, obtaining the SEZ unit approvals and establishing basic infrastructure. Typical ranges are:

Grade‑A office rent in GIFT City: USD 12 – 18 per sq ft per month
Annual office running costs (basic setup): USD 10,000 – 25,000
Fit‑out and infrastructure (one‑time): USD 15,000 – 40,000

Smaller, closely held FIFs often start with a compact office footprint and scale up as AUM and activity grow.

4. Professional and advisory costs (one‑time)

Families usually engage advisors to handle:

structuring (choice of company / trust / LLP, FEMA and tax alignment)
IFSCA/FIF application drafting and submissions
SEZ documentation and initial governance policies

Indicative advisory budgets are in the region of USD 15,000 – 40,000+, depending on complexity (cross‑border holdings, multiple family branches, existing offshore structures, etc.).

5. Ongoing annual operating costs

Once the FIF is up and running, typical recurring costs include:

IFSCA annual fee: USD 2,000
Audit, accounting and tax compliance: USD 10,000 – 25,000 per year (higher where the FIF holds many portfolio entities)
Personnel / family office support (investment oversight, administration, compliance), which can range from a lean part‑time arrangement to a fully staffed family office team.
Banking, custody and other service‑provider fees, which will vary with AUM, number of assets and use of leverage.
Technology and tools (portfolio reporting, document management, risk/analytics): often in the USD 5,000 – 20,000 per year range for smaller FIFs, rising with sophistication.

For a modest but credible FIF platform in GIFT City, a practical annual run‑rate once established is often in the USD 75,000 – 200,000+ band, depending on office size, staffing model and the extent to which services are outsourced versus kept in‑house. This is typically lower than a full institutional AIF platform, but still reflects the expectation of a substantive, long‑term family investment base in the IFSC.

All cost figures above are indicative and based on current IFSCA fee schedules and prevailing market practice as of 2025; actual costs will vary with the nature, scale and regulatory classification of the particular FIF.

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.