A Comprehensive Roadmap for Establishing Your Startup in GIFT City IFSC

In the pulsating realm of India's burgeoning startup ecosystem, a nuanced narrative has emerged. Alongside the remarkable growth and recognition, there's a discernible trend of startups opting for externalization or "flipping" to overseas jurisdictions.

This shift involves the intricate process of transferring ownership, including intellectual property and data, to foreign entities. Acknowledging the imperative to address this "flight of innovation," a dedicated committee has proposed the GIFT City International Financial Services Centre (IFSC) as a strategic solution.

This article meticulously unfolds the detailed steps for incorporating a business in GIFT City IFSC, accentuating the pivotal role of a vibrant holding company regime in attracting foreign investment.

Step-by-Step Guide to Incorporating Your Business in GIFT City IFSC:

Step 1: Identification of Suitable Office Space in GIFT SEZ:

• Begin by meticulously identifying and selecting office space within GIFT SEZ through a comprehensive agreement with the developer or co-developer.
• The chosen office space serves as the nucleus for establishing your business operations within the SEZ.

Step 2: Obtain Provisional Letter of Allotment (PLOA):

• Following the agreement with the developer, embark on securing a Provisional Letter of Allotment (PLOA). This official document solidifies the allocation of the chosen office space within the GIFT SEZ for your entity.
• The PLOA stands as a pivotal document, initiating the establishment of your business operations within the SEZ.

Step 3: Application in FORM F to SEZ Authorities:

The entity needs to prepare and submit FORM F along with the following annexures:

1. Demand Draft of Rs 5,000/-
2. Provisional Letter of Allotment issued by the Co-Developer.
3. Detailed Project Report, including projections for the next five years.
4. Entity ID documents such as License, PAN Card, IEC Code, etc.
5. Self-certified copies of Memorandum of Association and Articles of Association.
6. Self-certified copies of Board Resolution for setting up an office in GIFT IFSC.
7. Certificate of Incorporation.
8. List of Directors with their identity proofs.
9. Last 3 years’ audited financial statements and IT returns of the entity or directors.
10. Brief presentation covering the entity profile and scope of activities in GIFT IFSC.
11. Affidavit

Prepare three sets of the above documents and submit them as follows:

• Original set to the Office of the Development Commissioner.
• Second set to the developer (GIFT SEZ) to facilitate the submission of NOC from the developer to the Office of the Development Commissioner.
• Third set for the entity itself.

Step 4: Unit Approval Committee (UAC) Meeting:

• Subsequent to the submission of FORM F, the Development Commissioner will initiate contact for a meeting with the Unit Approval Committee (UAC).
• During the UAC meeting, the entity’s authorized representative presents the case on their behalf, elucidating the merits of establishing operations within GIFT City IFSC.

Step 5: Letter of Permission / Approval (LOA):

Following the UAC meeting, if the committee is satisfied with the entity’s presentation, the Development Commissioner issues a Letter of Permission / Approval (LOA).

Step 6: Letter of Acceptance:

Within 45 days of LOA issuance, the entity is mandated to deliver a Letter of Acceptance to the Development Commissioner, signifying the acceptance of the LOA’s terms and conditions.

Step 7: Execution of Lease Deed:

• The entity must proceed to sign a lease deed with the co-developer of GIFT SEZ within six months of receiving the LOA.
• Subsequently, the executed lease deed must be submitted to the Development Commissioner for validation.

Step 8: SEZ License and Registration with NSDL Portal:

• Post the issuance of the SEZ License, the entity is obligated to obtain registration with the NSDL portal for SEZ Online Registration.
• This registration facilitates reporting and other services related to import, procurement, and services within the SEZ.

Step 9: Bond Cum Legal Undertaking:

The organization is required to prepare and sign a comprehensive Bond Cum Legal Undertaking with the Development Commissioner and the Specified Officer of GIFT SEZ before submitting it.

Step 10: Obtain Registration Certificates and Exemption Eligibility:

• The entity must progress to obtain various registration certificates such as GST, RCMC, IEC, etc.
• Simultaneously, the entity should apply for eligibility certificates for exemption from various taxes from both the Central and State Governments.

Step 11: Registration with IFSCA:

• Before commencing business operations, the entity must secure a Certificate of Registration from the International Financial Services Centres Authorities (IFSCA).
• This involves preparing and submitting a comprehensive application along with the requisite fees to the IFSCA.

Step 12: Commencement of Business Operations:

After successfully completing all the necessary steps, the entity attains eligibility to commence its business operations, specifically the export of services.

It is imperative to inform the Office of the Development Commissioner about the date of the first export of services through a formal application titled “Commencement of business operations,” accompanied by supporting evidence such as a tax invoice.

Additionally, a copy of the application should be marked to the GIFT SEZ developer for record-keeping.

Conclusion:

Navigating the labyrinth of establishing a business in GIFT City IFSC demands meticulous attention to detail, unwavering commitment, and adherence to a multifaceted process. The overarching vision is not only to streamline the incorporation journey but also to position GIFT City as the epitome of a conducive business environment.

This involves not just a regulatory framework but a holistic approach that actively incentivizes and supports holding company structures, setting the stage for a robust and globally competitive ecosystem. The concerted effort aims not only to reverse the trend of startups seeking innovation havens abroad but to propel India's startup landscape to new heights of excellence.