Fund Formation
In this research paper, Opportunities in GIFT City - Fund Formation (May 2026), we revisit the current Indian legal, tax, and regulatory landscape for establishing and structuring funds in GIFT City, building on our earlier 2024 edition. The paper opens with an overview of GIFT City's origins and the institutional architecture of the International Financial Services Centres Authority, followed by a broad survey of the regulatory frameworks applicable across the GIFT IFSC ecosystem i.e., banking, insurance, capital markets, aircraft, and ship leasing, FinTech, and TechFin and ancillary services.
The core of the paper provides a detailed analysis of the legal, tax, and regulatory framework governing the setting up of Fund Management Entities and the launch of schemes including Venture Capital Schemes, Restricted Schemes, and Family Investment Funds under the IFSCA (Fund Management) Regulations, 2025, which replaced the earlier IFSCA (Fund Management) Regulations, 2022. It also covers the FPI route for investment into Indian securities, the overseas investment framework under FEMA, key income-tax considerations under the newly enacted Income-tax Act, 2025, and a structured comparison of GIFT IFSC schemes against traditional offshore fund structures.
This paper aims to offer practitioners, fund managers, and investors a current and comprehensive reference for navigating the legal and commercial architecture of GIFT IFSC as it matures into a structurally significant international financial centre.
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Mukund Arora, Harit Gandhi, Akash Shirore, Prafful Tonge, Sehar Sharma, Morvi Chaturvedi, Ipsita Agarwalla and Parul Jain
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