GIFT City, India’s first International Financial Services Centre (IFSC), offers good business opportunities for entities looking for exposure to the global market. This smart city with green initiative is developed on 886 acres of land. The GIFT City’s unique infrastructure, strategic location, and single window clearance attract businesses across the globe.
A unified regulatory framework and wide-ranging tax incentives offered by multi-service special economic zones facilitate easy business operation. Integrated development, walk-to-work concepts, and quality of life make the city attractive to innovative talents for the entities in the GIFT City.
The Process to Set Up Business in GIFT City
GIFT City is emerging as a top global destination for various industries, mainly financial services and information technology. Setting up a company or IFSC unit in GIFT City requires certain regulatory and operational compliance to be fulfilled. While detailed regulatory requirements, eligibility and capital requirements vary from industry to industry, there are some common processes to follow for setting up an IFSC unit in GIFT City. Here is a step-by-step registration process:
Step 1:
Choosing the right base location for the business is pivotal. Businesses can consider factors like infrastructure compatibility, possibilities of expansion in the future transportation etc., to choose a suitable office location.
Step 2:
Apply for a Provisional Letter of Allotment (PLOA) in a specified format with the developer to reserve the chosen space.
Step 3:
Submit an application of name availability to the Ministry of Corporate Affairs. It is mandatory to include the ‘IFSC’ word in the name and then apply for incorporation of the proposed IFSC unit.
Step 4:
Submit an application to the office of the District Commissioner for setting up the unit in GIFT SEZ
Step 5:
Register with the IFSC Authority by submitting an application.
Step 6:
Apply for a GST number with CBIC (Central Board of Indirect Taxes and Customs) and open a bank account with the IFSC banking unit.
Upon completing the registration process and legal and compliance formalities, companies can start their operation in the GIFT City and avail of the following tax incentives available under GIFT SEZ:
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Tax Incentives and Operational Benefits for GIFT City Companies
| Corporate Tax | 100% tax exemption for 10 consecutive years out of the first 15 years of operation. |
| Minimum Alternate Tax | Reduced rate of 9% of book profits (applicable for certain companies only who have not opted for the new tax regime). |
| Goods and Services Tax (GST) | GST exemptions on services received by IFSC SEZ units. However, GST is applicable for companies operating in GIFT City Domestic Tariff Area (DTA) |
| Dividend Distribution Tax | No tax on dividend income distributed |
| State subsidies | Applicable for IT/ITeS companies – incentives for operational and capital expenditure, PF contribution and upskilling of employees. |
| Exemption from FEMA regulations | IFSC unit is considered as non-resident and gets the benefits under exchange control provisions. |
Find out which Top University in GIFT City is setting new standards in education and innovation.
Which Companies Have Invested in GIFT City?
Here are the primary industries operating in GIFT City with a list of notable companies:
| Sl. No | Primary Sectors | Brief on Activities | Notable Companies |
| 1 | Banking | GIFT City is considered to be the number one global financial services hub, including banking. The activities include commercial banking, retail banking, custodian and underwriting services, international bullion exchange, capital markets and more. A total of 29 banking units (including domestic and foreign banks) are operating in GIFT City. |
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| 2 | Insurance companies and intermediaries | Offshore direct and reinsurance businesses are permitted in GIFT City for both Indian and foreign insurers and reinsurers. There are more than 20 insurance and reinsurance companies licensed to operate in GIFT City. |
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| 3 | Bullion Exchange | Bullion and international stock exchanges in GIFT City are open for long-hour trading in dollar-denominated products |
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| 4 | Fund Management | GIFT City offers fund management solutions to global investors through Alternative Investment Funds and Portfolio Management Services. There are 100+ AIFs and PMS available in GIFT City. |
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| 5 | Ancillary services | Includes consulting, legal, accounting, trustee and fund administration services |
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| 6 | FinTech and IT companies | GIFT City is becoming a global hub for innovation and attracting many IT and FinTech companies. |
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Latest Developments
Many financial services and IT companies are applying for IFSC licenses to start operations in GIFT City. Wipro, Infosys, and Cognizant are planning to start their operations in the first quarter of 2025.
IFSCA chairman has stated that the process has already begun for the direct listing of stocks under IFSCA (listing) Regulations, 2024.
Conclusion
To conclude, GIFT City is rapidly becoming a global hub for various businesses. Businesses can leverage the various benefits offered by the ecosystem, such as international regulatory and SEZ incentives, to participate in the global business market. Innovative businesses in the GIFT City can create more jobs and contribute to the thriving Indian economy.
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