Gujarat International Finance Tec-City (GIFT City), India’s first operational smart city and International Financial Services Centre (IFSC), is strategically located near Gandhinagar, Gujarat. It is rapidly emerging as a premier business hub, offering state-of-the-art infrastructure and a business-friendly regulatory framework. With its strategic advantages, GIFT City presents a valuable opportunity for entrepreneurs and corporations looking to tap into India’s expanding economic landscape.

This comprehensive guide provides a step-by-step overview of establishing a business in GIFT City, covering registration processes, incentives, and compliance requirements.

Understanding GIFT City and IFSC

GIFT City, a Multi-Services Special Economic Zone (SEZ), offers world-class infrastructure, regulatory incentives, and tax benefits, making it an attractive destination for businesses, especially those in finance, IT, and global trade.
 GIFT City is divided into two zones:  

• Domestic Tariff Area (DTA): Meant for businesses catering to the Indian market.
• International Financial Services Centre (IFSC): Designed for financial institutions and businesses operating in the global market.

The IFSC operates under a special regulatory framework governed by the International Financial Services Centres Authority (IFSCA) and provides a business-friendly environment.

Types of Businesses Eligible for GIFT City

The business must align with the permissible categories specified by the International Financial Services Centres Authority (IFSCA). These include:

• Financial Institutions & Banking Services: Banking, Capital Markets, Finance Companies, Fund Management, Insurance, Payment Services.
• Leasing & Fin-tech Services: Aircraft Leasing, Ship Leasing, Fin-tech
• IT and ITES: Software development, data centres, business process outsourcing (BPO), and knowledge process outsourcing (KPO).
• Accounting, Compliance & Support Services: Book-keeping, Accounting, Taxation, and Financial Crime Compliance (BATF) Services, Bullion Services, Global In-House Centres (GICs), Ancillary Services

Steps to Set-up your Business in GIFT City

The initial steps for establishing a business are equally applicable in this context, such as:

Perform a Comprehensive Market Analysis

Before setting up your business, conduct an in-depth market analysis to determine feasibility. Understand your target audience, study competitors, and assess regulatory frameworks to align your business strategy effectively.

Choose Business Structure

Decide on the type of entity you wish to establish, such as:

• Private Limited Company
• Limited Liability Partnership (LLP)
• Public Limited Company
• Branch Office, Liaison Office, or Wholly Owned Subsidiary

Establishing your business in GIFT City involves a series of specific steps, including

Secure Necessary Regulatory Approvals

Obtain the required approvals based on your business type:

• Financial Institutions: Seek authorization from the International Financial Services Centres Authority (IFSCA).
• IT/ITES & Other Sectors: Obtain necessary clearances from the Gujarat Urban Development Company (GUDC) and GIFT SEZ Authority.
• Infrastructure Development: Secure environmental and building permits as applicable.

Identify and Secure Office Space

Identify and select suitable office space within the GIFT SEZ, ranging from plug-and-play offices to custom-built facilities. Finalize the location by entering into an agreement with the developer or co-developer, ensuring it aligns with your business requirements for establishing operations within the SEZ.

Upon selection, apply for a Provisional Letter of Allotment (PLOA) for the office space from GIFT-IFSC, GIFT SEZ, or the designated developer.

Obtain Name Approval and Incorporate the Entity

Submit an application to the Ministry of Corporate Affairs (MCA) for name approval of the proposed entity. The name must include “IFSC” as part of the official title. Once approved, proceed with the incorporation of the business under the Companies Act, 2013, via the Ministry of Corporate Affairs (MCA).

Secure SEZ Approval

Prepare and submit Form F, along with required annexures such as the Project Letter of Approval (PLOA) and a detailed project report, to the Office of the Development Commissioner (ODC). Your application will be assessed by the Unit Approval Committee (UAC), where you must present a strong business proposal to secure approval.

Upon UAC approval, you will receive a Letter of Permission (LOP) from the ODC, authorizing business operations in GIFT City. Additionally, apply to the Development Commissioner (DC) of Kandla SEZ (KASEZ) for SEZ approval, ensuring full regulatory compliance.

Register for Tax and Compliance Requirements

Obtain essential tax and compliance registrations, including GST registration for domestic entities in the Domestic Tariff Area (DTA), PAN/TAN for income tax compliance, and an Import Export Code (IEC) for businesses engaged in cross-border trade. Additionally, secure a Registration-Cum-Membership Certificate (RCMC) and any sector-specific licenses required for your operations.

Register with the IFSC Authority

For businesses operating in the International Financial Services Centre (IFSC), apply for registration with the International Financial Services Centres Authority (IFSCA). This is a mandatory requirement for financial service entities within GIFT City.

Open a Bank Account in an IFSC Banking Unit

Establish a corporate bank account with an IFSC-registered banking unit to facilitate financial transactions in foreign currencies, ensuring seamless international operations.

Advantages of Setting up in GIFT City

GIFT City offers numerous advantages to businesses operating within its precincts:

• Attractive Tax Benefits: GIFT IFSC units enjoy a 100% income tax exemption for 10 years within the first 15 years and are not subject to GST, FEMA regulations, STT, CTT, or stamp duty.
• Capital Gains & Interest Exemptions: Non-residents benefit from tax-free interest on loans to IFSC units, and capital gains tax exemptions on listed securities traded on IFSC exchanges.
• Government Incentives: Gujarat offers waived stamp duty, lease rental subsidies, power subsidies, and EPF reimbursements, reducing setup and operational costs.
• Fin-tech & IT/ITeS Support: IT/ITeS businesses receive state subsidies, while fin-tech companies get technology grants and seed funding to foster innovation.
• Hub for Innovation & Growth: GIFT City supports banking, fin-tech, fund management, and ship leasing, with foreign universities enriching the talent pool.
• Infrastructure: World-class facilities, including uninterrupted power supply, smart utilities, and high-speed internet.
• Seamless Setup & Cost Savings: Plug-and-play infrastructure and pre-built utilities enable quick operations, reducing setup costs by up to 20%.
• Access to Global Capital: Businesses can directly list on IFSC exchanges, providing greater access to international capital markets.
• Regulatory Ease: A single-window clearance system and IFSCA’s unified regulations streamline compliance, reducing bureaucratic hurdles.
• SEZ Benefits: Duty-free import/export of goods and services lowers operational costs and enhances trade competitiveness.
• Prime Location: Close to major financial hubs, ensuring seamless connectivity and access to domestic and global markets.

Establishing a business in GIFT City offers significant advantages, particularly for financial and IT sectors, thanks to its state-of-the-art infrastructure, attractive tax incentives, and business-friendly regulatory framework. As India’s leading global financial hub, it provides a unique opportunity for both entrepreneurs and multinational corporations. By adhering to IFSCA regulations and following the proper setup steps, businesses can effectively establish and grow within this dynamic environment.