GIFT City, also known as Gujarat International Finance TecCity, is a ground-breaking smart city in Gujarat, India. The city’s vision is to establish a financial and technology hub that cultivates economic growth, catalyses innovation, and promotes sustainability. GIFT City’s state-of-the-art infrastructure and strategic location in the heart of India’s financial capital positions it as an attractive destination for top companies worldwide. Companies that choose to operate from GIFT City will have access to unparalleled opportunities for collaboration.

GIFT City is a transformative initiative for Gujarat and India, with enormous growth potential and promising prospects. Here’s why:

1. Financial Hub and Regulatory Framework

GIFT City aspires to become a worldwide financial hub, offering a favourable atmosphere for both domestic and international financial institutions, banks, insurance companies, and other financial service providers to operate and flourish. The city’s modern infrastructure, supportive regulations, and strategic location make it an attractive destination for businesses.

GIFT City in India is regulated by the IFSC Authority (IFSCA), which combines the regulatory powers of four financial services regulators in India, namely the Reserve Bank of India (RBI), Securities Exchange Board of India (SEBI), Insurance Regulatory Development Authority of India (IRDAI), and Pension Fund Regulatory & Development Authority of India (PFRDAI). This enables single window clearance for all necessary approvals under one umbrella easily.

The IFSCA has notified the IFSCA Fund Management Regulation, 2022, in April 2022. These regulations provide a comprehensive framework for asset managers and funds to operate in GIFT IFSC.

A brief snapshot of the fund regime in GIFT IFSC is provided below-

2. International Connectivity

GIFT City is well-connected, with proximity to the Ahmedabad International Airport and major national highways. This connectivity facilitates seamless travel and accessibility for businesses and investors, further enhancing its appeal as a global financial centre.

3. Special Economic Zone (SEZ) Status

GIFT City has been granted Special Economic Zone (SEZ) status, which provides numerous benefits and incentives to businesses. These include tax advantages, simplified regulatory procedures, and a business-friendly environment. The SEZ status of GIFT City is a major attraction for both domestic and international companies, which can invest in the city and thus contribute to its economic growth.

The Special Economic Zone (SEZ) is designed to promote foreign investment and exports, particularly for multinational corporations. SEZ offers benefits to the businesses operating in this zone, including duty-free imports and exports, easy regulatory processes, and tax benefits.

4. Infrastructure and Amenities

GIFT City has a top-notch infrastructure and amenities, which include contemporary office spaces, residential complexes, educational institutions, healthcare facilities, recreational areas, and a lively social and cultural atmosphere. Such all-inclusive facilities contribute to an appealing ecosystem for professionals, residents, and businesses alike.

The Government of Gujarat and the Government of India have done spectacular and unparalleled urban planning that gives the next-gen ‘plug & play’ infrastructure, facilitating quick and hassle-free business set-up with all the infrastructural clearances in place.

5. Innovation and Technology

GIFT City is dedicated to encouraging innovation and endorsing the use of advanced technology. Its goal is to lead the way in various fields, such as financial technology (fintech), smart city solutions, and sustainable development. By prioritising innovation and technology-oriented solutions, GIFT City is positioned as a leader in the rapidly changing financial landscape.

6. Job Creation

The development of GIFT City has led to the creation of numerous job opportunities in various sectors, including finance, banking, insurance, information technology, real estate, and construction. This not only enhances regional employment prospects but also contributes to the overall economic growth of Gujarat and India.

7. International Collaboration

GIFT City has established collaborations with leading international financial centres, such as London, Dubai, and Singapore. These partnerships facilitate knowledge sharing, skill development, and cross-border investment opportunities, further strengthening GIFT City’s position as a global player in the financial sector.

8. Sustainable Development

GIFT City is highly committed to sustainable development, and this is reflected in its focus on green buildings, renewable energy, waste management, and efficient resource utilisation. This emphasis on sustainability aligns with global trends and positions the smart city as an environmentally responsible business destination.

9. Other Important Regulations

1. The regulatory regime of GIFT IFSC is formulated to parallel the best practices accepted globally, facilitating flexibility and reducing compliance burdens. Amongst the plethora of such benefits, a few noteworthy relaxations include an exemption for non-residents from obtaining a permanent account number (PAN) or filing a return of income in India in certain circumstances.
2. The IFSC Units set up in GIFT City, India offer various tax benefits like exemptions on corporate tax, tax holidays for ten years, reduced Minimum Alternative Tax (MAT), etc., increasing the profitability and growth of the business houses. It also offers numerous indirect tax benefits such as no Goods and Service Tax (GST) on services received by units in IFSC, and no GST on services provided to IFSC units / SEZ units / offshore clients.
3. The Government of Gujarat provides various state incentives in the form of financial incentives and support schemes to attract companies and investors to GIFT IFSC. These incentives include grants, subsidies, and reduced operational costs due to OPEX support, CAPEX support, and employment generation incentives. The government has also announced various state-level incentives and subsidies to Information Technology (IT) and Information Technology Enabled Services (ITeS) Companies.
4. GIFT City India provides distinguished benefits to the financial and IT/ ITeS companies, making it a pivotal bedrock at par with the various global financial and IT hubs. GIFT City is a vision of the Government of India and Gujarat aiming to serve as a centre for global banking, trade, and business. To promote the innovation of ideas and entrepreneurship, IFSC-GIFT City provides dedicated FinTech sandboxes and a requisite start-up-friendly environment intending to shape and fulfil the aspirations and ambitions of start-ups and entrepreneurs.
5. The companies set up in GIFT City are exempted from certain provisions of the Companies Act of India.

Exemptions related to Companies

There are various exemptions and relaxations given to the companies being set up in the GIFT IFSC concerning the regulatory requirements under the Companies Act in India. Few are enumerated as follows:

• In a company set up in GIFT IFSC, the requirement of having at least one resident director is waived. This makes it easier for foreign entities to establish their presence in India with the management personnel with whom they are familiar.
• There is also an exemption for the applicability of secretarial standards, which lay down the procedural aspects of board meetings and general meetings.
• Furthermore, there is a relaxation in compliance about loans, advances, guarantees, and investments made by companies set up in GIFT IFSC.
• Lastly, internal auditors are exempted from being appointed by these companies.

Comparison with Global Financial Hubs

GIFT City’s strategic development, focus on digital infrastructure, and regulatory innovations position it as a formidable contender on the international stage despite being relatively nascent compared to established global financial hubs. As GIFT City continues to advance, it will undoubtedly become a major player in the global financial landscape, representing India’s rising power in the world economy.

With cutting-edge infrastructure, a welcoming business environment, and a comprehensive range of financial services, GIFT City is poised to attract substantial international investment and top talent. As it further expands its offerings and capabilities, GIFT City will inevitably be compared with other major financial hubs around the world, such as London and New York, on an equal footing. This shift in perception will reflect India’s growing self-assurance and commanding position in the global financial arena.