DelhiDesk GIFT City is an International Financial Services Center (IFSC) in India that provides financial services in foreign currency and has been envisioned as a global finance hub. Several portfolio management services (PMSes) are setting up shop here, offering both inbound and outbound investment services. The global portfolio management services being offered by firms such as PhillipCapital and Marcellus have created a new international investing avenue for HNIs and ultra high net worth individuals. The funds managed under GIFT City are not regulated by Sebi or the Reserve Bank of India but by the IFSCA (Fund Management) Regulations, 2022. For portfolio managers rendering service in IFSC, there is a tax holiday on their profits. However, residents and non-residents are taxed differently for investments in outbound funds in GIFT City. For residents, the money invested through a PMS is considered a direct investment and the tax will be charged at the capital gains tax of 20% with an indexation benefit for investments held for more than two years (36 months for investments in ETFs).
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– GIFT City is an International Financial Services Center (IFSC) in India that provides financial services in foreign currency and is considered a separate jurisdiction from the rest of India.
– SGX derivatives have transitioned to GIFT City, making it an international finance hub.
– Several portfolio management services (PMSes) are setting up shop in GIFT City, offering both inbound and outbound investment services.
– The global portfolio management services being offered have created a new international investing avenue for HNIs and ultra-high net worth individuals.
– The funds managed under GIFT City are not regulated by Sebi or the Reserve Bank of India but by the IFSCA (Fund Management) Regulations, 2022.
– For portfolio managers rendering service in IFSC, there is a tax holiday on their profits for 10 years.
– Investors do not have to open a bank account in GIFT City and can become clients of the portfolio manager and international brokers/custodian with a tripartite arrangement.
– Taxation for residents and non-residents investing in outbound funds in GIFT City differs, with non-residents exempt from tax in India.
– Available funds in GIFT City include Phillip Ventures IFSC and Marcellus ‘Global Compounders Portfolio’, with SBI Funds Management also planning to set up a fund.
– It is important to check whether the fund manager has enough expertise in the international markets before investing in PMSes in GIFT City.
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