An Detailed Overview Of IFSC GIFT City
26 April, 2023
The Gujarat International Finance Tech-City, or GIFT City is a service hub for global financial and information technology (IT) companies. GIFT City offers commercial spaces to both domestic and international corporations to set up units and allow foreign investments. GIFT City is India’s first operational smart city as well as the first International Financial Service Centre (IFSC). Here, you can get information on IFSC in GIFT City and how it benefits businesses.
What is IFSC GIFT City?
IFSC GIFT City is an initiative by the Gujarat Government and the Government of India (GOI) to establish an upscale financial hub in the country. Their objective is to allow a greater influx of foreign investments. This would also allow India to compete with other global financial centres, which can consequently strengthen India’s position in the global economy. GIFT City hosts a wide range of financial institutions like Indian and foreign banks, insurance providers, asset management companies, FinTech hubs, international exchanges, capital market investment companies, etc.
The GOI approves and regulates IFSCs under the Special Economics Zone (SEZ) Act, 2005. GIFT City has been approved as a multi services SEZ, also known as GIFT SEZ.
Benefits of IFSC GIFT City
Businesses should consider the following benefits of setting up their business operation spaces in GIFT City:
To promote ease of doing business, the IFSC is regulated by a single entity – the International Financial Services Centre Authority (IFSCA). The IFSCA combines regulatory powers of the four domestic financial regulators. These include the:
Reserve Bank of India (RBI),
Securities and Exchange Board of India (SEBI),
Insurance Regulatory and Development Authority of India (IRDAI) and
Pension Fund Regulatory and Development Authority (PFRDA).
IFSC units are exempt from income tax payment for 10 consecutive years. The companies under IFSC are not liable for Dividend Distribution Tax (DTT) while Minimum Alternate Tax (MAT) will be charged at 9%. For companies opting for the new tax regime, MAT will not apply. Also, state subsidies will be applicable on lease rental, Provident Fund (PF) contribution and electricity charges.
IFSC GIFT City is located on the banks of river Sabarmati, between the business capital (Ahmedabad) and the political capital (Gandhinagar). The city is also in close proximity of major transit systems like the Ahmedabad International Airport, railway station, metro and the bullet train terminus.
The state government has waived off the stamp duty and registration charges for businesses who wish to develop buildings in IFSC GIFT City. They also offer development incentives. The plug-and-play infrastructure of city can further reduce the cost of development. IFSC offers up to 20% reduction in operating costs. Low attrition also minimises costs otherwise incurred for recruiting and training new employees.
Access to talented workforce
Gujarat is home to some of the top educational institutions in business management, information technology, engineering, law, design, etc. Businesses can take advantage of this talent availability and create a high-functioning workforce. A competent workforce is essential for efficiency and increased return on investment for a business.
How investors can benefit from HDFC Bank IBUs
With HDFC Bank IFSC Banking Unit (IBU), foreign nationals as well as Non-Resident Individuals can invest in India through Offshore Accounts & Deposits and Call Accounts. Moreover, Resident Indians can invest in fractional shares of the top 50 US stocks traded at GIFT City’s exchanges via the Liberalised Remittance Scheme (LRS).
Diversify your investments and invest in global equities with HDFC Bank.
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Read more about GIFT City here.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Investments are subject to changes in tax laws. Please contact a professional consultant for an exact calculation of your liabilities.