FPI count at GIFT City doubles in 4 months

Maiden IFSC emerges as preferred choice of fund managers

- KHUSHBOO TIWARI

Foreign portfolio investors (FPIs) are expanding their presence at the Gujarat International Finance Tec-City (GIFT City) to benefit from lower costs and mitigate operational challenges in popular jurisdictions like Singapore and Mauritius.

The number of FPIs registered in GIFT International Financial Services Centre (IFSC) has doubled in the past four months.

According to data from the National Securities Depository, the number of FPIs registered at GIFT IFSC stood at 41 until February 2024, compared to only 21 until October 2023.

Many fund managers are increasingly looking to re-domicile their base to India's maiden IFSC, say legal experts. This is because Indian fund managers are opting for GIFT City over their tax havens due to better clarity on regulations, they add.

"Many fund managers have started seeing merit in setting up a GIFT IFSC structure from a long-term perspective, as the said structure can accommodate all the possible strategies that the fund managers may come up with.

This, coupled with tax flexibility and substance, makes it a more appealing jurisdiction compared to traditional ones like Mauritius and even Singapore," said Twinkle Dhamecha, partner, IC Universal Legal.

'Substance' refers to the basic requirements mandated for the fund on employees, office, turnover, and expenses to operate in a specific country.