GIFT City - India’s Financial Hub

GIFT City (Gujarat International Finance Tec-City) is India’s first operational International Financial Services Centre (IFSC), developed as a globally competitive financial and services hub to attract international capital, financial institutions, fintech companies, and global service providers.

Conceived as a next-generation global business district, GIFT City is deemed a foreign jurisdiction for financial services, enabling cross-border transactions in foreign currency with minimal regulatory friction. It operates under a distinct legal, tax, and regulatory regime, separate from the Domestic Tariff Area (DTA), and is positioned as India’s gateway for international finance and offshore services.

As of 2025, GIFT City has

•1,034+ registered entities across financial and allied sectors

•Multi-sector presence including banks, insurers, FMEs, fintechs, and lessors

•Global recognition: Ranked 46th in GFCI and 5th among emerging centres

Policy Objective and Strategic Intent of GIFT city

GIFT City has been established to:

Bring offshore financial services currently conducted outside India back onshore
Position India as a global financial and fintech hub
Facilitate international banking, capital markets, insurance, and fund management
Promote innovation-driven sectors such as Fintech
Enable seamless cross-border financial transactions in foreign currency

Strategic relevance for foreign companies

GIFT City allows global institutions to access the Indian market while operating within an internationally aligned regulatory and tax framework—without the constraints typically associated with onshore Indian regulations.

1. Direct Tax Incentives

Eligible IFSC units enjoy significant income-tax benefits, including:

100% income tax exemption for 10 consecutive years out of 15 years
Exemption applies to income derived from eligible IFSC activities
No Minimum Alternate Tax (MAT) for IFSC units

Strategic relevance for foreign companies

Predictable long-term tax planning

Lower effective tax rate compared to onshore India

Enhanced post-tax returns

2. Indirect Tax and GST Framework

Goods and services provided to outside GIFT attract a 0% GST rate.

Intra-GIFT transactions are considered zero-rated supplies, removing GST taxation.

Goods imported into GIFT City are not subject to customs duties at the time of import, as long as those goods remain within the IFSC or are used for permitted IFSC activities

Strategic relevance for foreign companies

GST neutrality for services/goods rendered to the parent or international company

Lower effective tax rate compared to onshore India

Enhanced post-tax returns

3. Liberalised Foreign Exchange and FEMA Framework

GIFT City IFSC operates under a liberalised foreign exchange regime, including:

Transactions permitted in foreign currency.

Simplified FEMA compliance

Offshore-style treasury and funding operations

No restriction on capital repatriation, subject to IFSC norms

Strategic relevance for foreign companies

Global treasury centralisation

Reduced currency risk

Alignment with international financial practices

4. Operational and Infrastructure Advantages

GIFT City offers:

Plug-and-play Grade-A commercial infrastructure

Smart city features with integrated utilities

High-speed data connectivity and disaster recovery facilities

Dedicated residential, social, and commercial zones

Strategic relevance for foreign companies

Faster setup timelines

World-class working environment

Integrated live-work-play ecosystem

5. Single-Window Approval and Compliance Ecosystem

Centralised licensing through IFSCA

Streamlined onboarding for banks, funds, insurers, fintechs, and GCCs

Ongoing regulatory support through IFSC-specific compliance frameworks

Strategic relevance for foreign companies

Reduced administrative complexity

Faster time-to-market

Minimal regulatory overlap

What you can do in GIFT City IFSC

GIFT City supports a wide set of international financial and allied services, including:

Financial Institutions & Markets

IFSC Banking Units (IBUs) and treasury operations
Capital markets and exchange participation
Broker-dealer and market intermediary setups
Funds & Investment Platforms
Fund management and investment vehicles
Alternative structures for global investors (eligible IFSC frameworks)
Insurance & Reinsurance
Insurance, reinsurance, and captive arrangements (as permitted)
Leasing & Cross-border Assets
Aircraft leasing and structured finance models (IFSC-aligned)
Fintech & Regtech
Cross-border fintech solutions, payment innovations, digital platforms (subject to eligibility)
Global Capability Centres (GCCs)
Financial services GCCs supporting global operations, analytics, risk, compliance, and reporting

Step-by-Step Process to Set Up a Business in GIFT City

1. Office space in GIFT SEZ

For setting up businesses at GIFT City, the first and foremost step is to identify and select the office space within the SEZ. To validate this step, approval must be taken from the developer or co-developer. The office space will serve as the location for establishing business operations.

2. Provisional Letter of Allotment (PLOA)

After the entities have established communication with the developer/co-developer, it is necessary to get a PLOA. Through this document, you can initiate the establishment of your business operations, confirming the chosen office space within the GIFT SEZ.

3. Form FA to SEZ Authorities

The businesses looking to set up under the GIFT SEZ are required to submit Form FA and a list of other documents.

4. Unit Approval Committee (UAC) meeting

After successful submission of Form FA to the SEZ authorities, entities will be contacted by the Development Commissioner. During the hearing, the entities will be represented by an authorised representative.

5. Letter of Approval

After the hearing, the Development Commissioner will authorize a Letter of Permission/Approval (LOA) if the Committee deems the entity fit to operate under the GIFT IFSC.

6. Letter of Acceptance

Entities looking to set up business at GIFT City are required to submit a letter of acceptance to the Development Commissioner stating they agree to the LOA’s terms and conditions within 45 days of receiving the LOA.

7. Lease Deed

A lease deed must be signed with the developer/co-developer of the GIFT SEZ and submitted to the Development Commissioner within six months of receiving the LOA.

8. SEZ License and Registration

After entities obtain a SEZ license, they need to obtain a registration with the NSDL portal.

9. Bond cum Legal Undertaking

For setting up a business in GIFT City, a bond cum legal undertaking must be prepared and signed by the Development Commissioner and GIFT SEZ’s specified officer.

10. Registration Certificates and Exemption Eligibility

Several certificates are to be obtained before beginning the business operations. These registration certificates include GST, RCMC, IEC, etc. The entity should also apply for eligibility certificates for exemption from taxation with the respective state and central governments.

11. Registration by IFSCA

Since GIFT City is a certified IFSC, entities must obtain a Certificate of Registration by paying the fees from the International Financial Services Centres Authorities (IFSCA).

Conclusion

Businesses can avail significant tax and regulatory benefits by establishing operations in GIFT City, which offers a specially tailored, business-friendly regulatory environment. With its SEZ status, world-class infrastructure, and globally aligned financial regulations, GIFT City presents a compelling opportunity for companies seeking operational efficiency and long-term value creation. For businesses aiming to strategically enhance growth, optimise taxation, and future-proof their India presence, GIFT City merits serious consideration. We hope this blog has provided useful insights into GIFT City and the tax benefits available to eligible entities.

How India Company Incorporation Helps You Set Up in GIFT City

India Company Incorporation provides end-to-end advisory and execution support for establishing and operating in GIFT City. Our approach is aligned with IFSC regulations and your commercial objectives, ensuring a compliant, efficient, and future-ready setup while avoiding regulatory missteps, delays, or eligibility gaps.

Our GIFT City Services Include

1. Feasibility and Eligibility Assessment

•Evaluation of your proposed business model against permitted IFSC activities

•Assessment of regulatory eligibility and commercial viability

•Recommendation on the most appropriate entity structure and licensing pathway

2. Entity Structuring and Incorporation Support

•Advisory on setup strategy, entity selection, and incorporation roadmap

•End-to-end support on documentation and filings

•Structuring for optimal ownership, governance, and operational control

3. IFSCA Licensing Support

•End-to-end application management and documentation readiness

•Guidance on regulatory workflows, approvals, and timelines

•Ongoing coordination to ensure smooth licensing progression

4. Tax, FEMA, and Cross-Border Structuring

•Transaction structuring for fund flows, repatriation, and intercompany arrangements

•Advisory on FEMA compliance for IFSC entities

•Withholding tax planning and treaty-aligned structuring, where applicable

5. GST Advisory for IFSC Supplies

•Analysis and mapping of zero-rated and tax-neutral supplies

•Advisory on GST compliance framework for IFSC operations

•Structuring to mitigate indirect tax exposure and leakage

6. Ongoing Compliance and Expansion Support

•Periodic regulatory and statutory compliance assistance

•Support for modifications, business expansion, and scaling

•Advisory focused on operational optimisation within the IFSC framework

GIFT City - India’s Financial Hub

GIFT City - India’s Financial Hub

Policy Objective and Strategic Intent of GIFT city