GIFT Legal and Compliance Support
IFSCA Setup, Documentation, Governance & Ongoing Compliance for GIFT IFSC Entities

GIFT IFSC (Gujarat International Finance Tec-City International Financial Services Centre) is India's only operational International Financial Services Centre, located at GIFT City, Gandhinagar, Gujarat. It is regulated by the International Financial Services Centres Authority (IFSCA), established under the IFSCA Act 2019 as the unified regulator for all financial services activities in India's IFSC. IFSCA replaced the previous multi-regulator framework and provides a single regulatory window for financial services businesses in GIFT IFSC.

GIFT IFSC can host a range of entity types: IFSC units (branches or subsidiaries of Indian entities specifically authorised for IFSC activities); foreign company branches; IFSCA-registered fund management entities (as companies, LLPs, or trusts); banking units of Indian and foreign banks (IBUs); insurance entities; fintech businesses (under the sandbox or regulated entity pathway); aircraft and ship lessors; treasury and holding company structures; and various ancillary service providers (law firms, accounting firms, and other professional services). The choice of entity type depends on the proposed activity, the regulatory category under which IFSCA authorisation will be sought, and the commercial and tax considerations relevant to the specific business.

GIFT IFSC is not a standard business registration environment. Setting up a company in mainland India involves a relatively standardised MCA registration process. In GIFT IFSC, setting up involves navigating IFSCA authorisation (which is specific to the activity and requires detailed substantive documentation), SEZ unit approval from the Development Commissioner (with its own procedural and substantive requirements), ongoing regulatory compliance under IFSCA sector regulations, and AML/CFT framework implementation. The overlap between the IFSCA regulatory framework, the SEZ framework, and the applicable Indian laws requires coordinated expertise across multiple regulatory systems. Without specialist legal and compliance support, entities risk making structural or procedural errors at the setup stage that are difficult and expensive to correct later.

Section 80LA of the Income Tax Act 1961 provides a significant income tax exemption for business income earned by IFSC units from permitted activities. For companies, a 100% deduction on business income is available for any 10 consecutive years out of the first 15 years of operation of the IFSC unit. For other entities, the exemption period may differ. The exemption applies to income from specific IFSC activities — including fund management, banking, insurance, leasing, and other financial services — earned from activities conducted from the IFSC unit. To qualify for the Section 80LA exemption, the entity must be registered with IFSCA, must conduct the relevant activities from within the IFSC, and must maintain proper books of account and file its income tax return. The correct interpretation and application of Section 80LA requires specialist tax advisory, which N D Savla & Associates provides as part of its integrated GIFT IFSC advisory service.

Yes, emphatically. IFSCA authorisation is not a one-time approval that allows an entity to operate without further regulatory engagement. Authorised entities must maintain ongoing compliance with all applicable IFSCA regulations, sector-specific frameworks, AML/CFT requirements, SEZ conditions, and Income Tax obligations — throughout the life of the entity. Regulatory returns must be filed periodically. Material events must be disclosed promptly. Governance and compliance frameworks must be maintained and updated as the business evolves and as IFSCA regulations change. IFSCA has the power to inspect, audit, and take enforcement action against authorised entities that fail to maintain required compliance standards. N D Savla & Associates provides structured ongoing compliance support that ensures authorised entities remain compliant across all their regulatory obligations without requiring management to track each deadline and requirement independently.

Yes — IFSCA's Innovation Sandbox framework is specifically designed for fintech entities that are still in the development and testing phase of their product or service. Under the Sandbox, IFSCA may grant certain regulatory relaxations or waivers for a defined testing period, allowing fintech entities to test their innovation with a limited set of eligible customers or within specified parameters before seeking full authorisation. The Sandbox application requires a clear description of the innovation, the testing plan, the risk management approach, and the intended path to full authorisation or exit. N D Savla & Associates assists fintech startups in evaluating whether the Sandbox is the right pathway for their product, preparing the Sandbox application, and transitioning from Sandbox testing to full IFSCA authorisation upon successful validation.