New opportunities open up for funds in IFSC

Tuesday, December 04, 2018

Session: 12:00 PM (IST)

Repeat Session: 07:30 PM (IST)

VENUE: MUMBAI – BKC AUDITORIUM, NISHITH DESAI ASSOCIATES, 2ND FLOOR, 3, NORTH AVENUE, MAKER MAXITY, BANDRA-KURLA COMPLEX, MUMBAI – 400 051, INDIA

INTRODUCTION

SEBI released a circular on Operating Guidelines for Alternative Investment Funds (“AIFs”) in the International Financial Services Centres (“IFSC”) on Monday, November 26, 2018 (the “Circular”).

The Circular enables Indian managers to sponsor and manage AIFs set up in IFSCs (‘offshore AIFs’). For India inbound investments, the offshore AIF program also seems to combine the FDI, FPI and FVCI regimes. On the other hand, for outbound investments from India, there are no investment caps on the offshore AIFs. Accordingly, as designed, ‘offshore AIFs’ could potentially be an India managed-platform where a single pool of capital is raised from global investors including Indian residents, and invests on a global basis.

While SEBI considered the proposals made by the Alternative Investment Policy Advisory Committee (AIPAC) and sought to bring about regulatory clarity in the Circular, there are some issues to be considered for implementation of the Circular, including from a tax and exchange control perspective. The concept needs to be marketed to a global audience and it may be difficult to implement such structures till there is sufficient clarity on all these aspects.

In this webinar, our panel of experts, including our guest, Mr. Dipesh Shah (Chief, Gujarat International Finance Tec-City (“GIFT”), India’s first IFSC), will discuss the newer avenues opened up under the Circular for funds in IFSCs.

Focus Area

  • What has the Circular introduced in terms of offshore AIFs operating in IFSCs?
  • What are the advantages that an offshore AIF may derive from setting up in GIFT IFSC?
  • How does the Circular impact structuring of India focused funds?
  • What are the tax clarifications required for an effective implementation of the Circular for India focused funds?
  • What are the key questions / considerations for fund managers to set up in GIFT IFSC?
  • What are the clarifications / rules expected from the Reserve Bank of India (“RBI”) from an exchange control perspective on the Circular?
  • What are the key takeaways for those presently considering an AIF set up in IFSC?

About Our Guest

Dipesh Shah

Chief (GIFT IFSC), Gujarat International Finance Tec-City Co. Ltd. (GIFT)

GIFT City is developing Domestic and International Financial Services hub in Gandhinagar, Gujarat. Mr. Shah has over 18 years of professional experience in International Business, Project Development, Corporate Affairs, Corporate Law & Policy matters. His most prominent achievement includes setting up and operationalizing India’s 1st Smart City and International Financial Services Centre (IFSC). He has been one of the founding member of GIFT City.

In last 10 years, during his tenure, GIFT City made substantial progress in getting recognition as India’s model Smart City, starting India’s first Multi Services SEZ and only approved International Financial Services Centre. He brought in the regulatory and business changes in the GIFT IFSC to bring in Banks (now transacting more than US$ 15 Billion), International Exchanges, inaugurated by Hon’ble Prime Minister of India (now daily turnover > USD 1.5 bn) and Insurance & re-insurance companies for undertaking offshore transactions. He has developed various business structures for Financial Services & related businesses in Special Economic Zone.

Speakers

Nishith Desai

Founder

Nishith Desai Associates

Nishith Desai is the founder of the research & strategy driven international law firm, Nishith Desai Associates. Nishith himself is a renowned International Tax, Corporate, IP lawyer, researcher, published author and lecturer in leading academic institutions around the world. He specializes in the Financial Services sector and assisted Government of Mauritius and Government of India in launching their individual offshore financial centers. Soon after India opened up its economy to the outside world in 1991, he established the first five India Focused Funds and pioneered the roots of now burgeoning asset management industry. He played a seminal role in structuring several private equity funds in addition to structuring several domestic venture capital funds. The firm has now worked for over 1400 funds across all classes of assets.

Rajesh Simhan

Head, International Tax

Nishith Desai Associates

Rajesh Simhan leads the International Tax & Tax Controversies Practice at research & strategy driven international law firm, Nishith Desai Associates. Over the years, the International Tax & Tax Controversies Practice at Nishith Desai Associates has been consistently recognized as the leading tax practice in the country by Chambers & Partners and the Tax Directors Handbook amongst other noteworthy sources. Rajesh, one of the foremost authorities on International Tax, is renowned for the legal services he offers to those involved in some of the most complicated tax controversies of India; including advising Vodafone in NDA’s role as special counsel to Vodafone on its landmark tax litigation relating to indirect transfer taxes in India. He has successfully represented clients before various forums including different Tribunals, Authority for Advance Rulings, and in High Courts (pan India) as well as at the Supreme Court of India in relation to disputes on international tax.

Richie Sancheti

Head, Investment Funds

Nishith Desai Associates

Richie Sancheti leads the Funds Practice Group at Nishith Desai Associates and is based in Mumbai. With a strong background in funds, Richie advises on optimum structures for setting up onshore and offshore investment funds. He advises fund managers in connection with the formation, carry allocation program and governance of private funds. Richie specializes in all aspects of the formation and operation of venture capital, private equity and hedge funds that are focused on investing in India. Richie has extensive experience in designing fund structures and advising on “market” terms. Richie is also a member of the firm’s international tax and private equity investment practice groups and advises clients on matters including private equity transactions.

Nandini Pathak

Senior Member, Investment Funds

Nishith Desai Associates

Nandini Pathak is a senior member of the Investment Funds practice at the firm and is actively involved in the firm's thought leadership on the venture capital and private equity side. With a strong focus on VC/PE funds, she has advised several international and domestic clients on legal, regulatory and tax issues, fund governance and fund economics best practices and negotiations with various participants at the fund formation stage. She frequently interacts with the securities regulator and custodians. Her expertise includes tax efficient structuring for India focused funds as well as LP negotiations. With a strong practice base on the fund formation side, she also regularly advises clients on the regulatory front including securities laws and exchange control laws.

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Please find the IFSC-AIF circular, dated 26th Nov 2018, for your reference here.