For Foreign Companies
For Indian Companies
GIFT City
Taxation Services
Advisory & Regulatory
Accounting Services
GIFT City offers a distinct regulatory and tax ecosystem for financial services and allied activities. A gift city company setup operates within a designated Special Economic Zone in Gujarat and is regulated by the International Financial Services Centres Authority, established under the IFSCA Act, 2019. The framework combines exchange control flexibility, tax incentives, and sector specific supervision within a single jurisdiction.
As per data published by the IFSC Authority, more than 600 entities were registered in GIFT City’s IFSC by the end of 2025 across banking, capital markets, fund management, insurance and fintech segments. The Union Budget 2026 further strengthened the regime by extending and refining profit linked deductions under Section 80LA of the Income tax Act, 1961. It also clarifies tax treatment for treasury and cross border structures operating from the IFSC. For foreign groups evaluating entry into India, the gift city company setup model presents a structured alternative to conventional onshore incorporation.
Entities seeking a gift city company setup must undertake permitted financial or ancillary activities within the IFSC. These include:
Core Financial Services
Operational and Support Services
Non-financial services may be permitted if they are incidental to financial operations and approved by the Development Commissioner and IFSCA.
Each vertical is governed by specific IFSCA regulations prescribing:
A gift city company setup can be structured in multiple forms depending on operational objectives, group structure and regulatory requirements.
| Structure | Suitable For | Key Characteristics |
|---|---|---|
| Private Limited Company | Fund managers, fintech entities, treasury centres | Separate legal entity, limited liability, eligible for Section 80LA benefits |
| Limited Liability Partnership | Advisory and professional services | Operational flexibility with limited liability |
| Branch Office of Foreign Company | Extension of overseas parent | No separate incorporation, regulated presence in IFSC |
| Trust Structure | Asset management and investment vehicles | Fiduciary structure for pooling investments |
The choice of structure depends on licensing conditions under relevant IFSCA regulations and tax optimisation considerations.
The procedure integrates SEZ approval and IFSCA registration. The broad steps are as follows:
1. Preliminary Engagement with IFSCA
Applicants should approach the IFSCA Development Division for guidance on eligibility, capital requirements, and regulatory classification. This helps align the proposed activity with the appropriate vertical.
2. Securing Office Space within IFSC SEZ
Your unit must obtain a Provisional Letter of Allotment from the SEZ developer confirming physical premises within GIFT City’s SEZ. Physical presence within the notified IFSC area is mandatory under SEZ Rules.
3. SEZ Unit Approval
The applicant submits Form F through the SEZ online portal to the Development Commissioner. Documentation typically includes:
The Unit Approval Committee evaluates the proposal and, if satisfied, issues a Letter of Approval under SEZ Rules, 2006.
4. Execution of Bond and Import-Export Code
Post approval, the entity must:
5. Incorporation under Companies Act, 2013
For companies, incorporation is done through the Ministry of Corporate Affairs portal. The registered office must be within the IFSC premises.
6. Registration with IFSCA
The entity applies via the Single Window IT System portal using the Common Application Form along with the vertical specific annexure.
Upon satisfaction of capital, governance and compliance criteria, IFSCA issues a Certificate of Registration enabling commencement of regulated operations.
For well-prepared applications, the timeline may range between four to eight weeks, subject to regulatory review.
Tax efficiency remains one of the primary drivers for a gift city company setup. The Union Budget 2026 introduced refinements to reinforce the IFSC regime.
Section 80LA Profit Linked Deduction
Provisions of Section 80LA of the Income Tax Act:
This allows long term tax planning and alignment with business cycles.
Concessional Corporate Tax
After the expiry of the deduction period:
This compares favourably with the general corporate tax regime applicable to foreign companies under Section 115A and related provisions.
Other Key Tax Benefits
Government notifications and amendments provide:
The precise applicability depends on activity classification and compliance with conditions prescribed in notifications issued by the Central Board of Direct Taxes and the Ministry of Finance.
Under SEZ Rules, 2006, every IFSC unit must achieve positive Net Foreign Exchange earnings over a five-year block.
Net Foreign Exchange is calculated as:
Foreign Exchange Earnings minus Foreign Exchange Outgo.
Failure to maintain positive Net Foreign Exchange may attract action under SEZ regulations, including potential cancellation of approval.
A gift city company setup requires continuous regulatory oversight. Core obligations include:
IFSCA regulations also prescribe governance standards including:
Non-compliance may result in penalties, suspension or cancellation of registration.
Most financial services activities in IFSC permit 100 percent foreign direct investment under the automatic route, subject to sectoral caps and conditions where applicable.
Transactions are governed by FEMA, 1999 and relevant notifications issued by the Reserve Bank of India and the Central Government. The IFSC framework allows:
This enables multinational groups to centralise treasury and cross border financial operations within the IFSC structure.
GIFT City operates as a planned financial district with:
According to official disclosures by IFSCA and GIFT SEZ authorities, employment in IFSC units has crossed 20,000 professionals by late 2025, reflecting steady institutional expansion.
The ecosystem includes recognised stock exchanges, clearing corporations and depositories operating within the IFSC framework, enabling integrated capital market operations.
Before undertaking a gift city company setup, foreign promoters should evaluate:
A detailed feasibility study supported by regulatory analysis ensures that the structure is sustainable and aligned with global group strategy.
A gift city company setup represents a specialised route for financial services operations within India’s international financial jurisdiction. Supported by the SEZ Act, the IFSCA Act of 2019, and tax benefits under the Income Tax Act. The GIFT City offers a unique blend of regulatory integration and fiscal efficiency. The improvements brought about by the Union Budget 2026, specifically in relation to Section 80LA deductions and the concessional tax treatment, further enhance the long-term viability of the IFSC structure.
For foreign groups and institutional investors, the IFSC structure offers regulatory clarity, foreign exchange flexibility and a defined tax horizon within a government backed financial district. With careful structuring, robust compliance systems and alignment with notified regulations, the IFSC platform can serve as a strategic base for cross border financial operations anchored in India’s evolving global financial architecture.
