Guide to Establishing Your Business in India’s GIFT City

India’s rapid economic growth and emergence as a global powerhouse have paved the way for numerous opportunities in the business landscape. Amidst these, Gujarat International Finance Tec-City (GIFT City) emerges as a premier choice for enterprises aiming to leverage India’s thriving financial markets.

Positioned within the dynamic milieu of Gujarat, India, GIFT City represents a distinctive venture in financial innovation. Serving as India’s inaugural International Financial Services Centre (IFSC) and a Multi-Services Special Economic Zone (SEZ), it offers an alluring opportunity for businesses seeking a strategic entry point into the world’s most rapidly advancing economy.

Why choose GIFT City?

GIFT City envisions itself as a global financial and technology hub, attracting businesses across diverse sectors like banking, insurance, capital markets, fintech, IT, and more. Here are some key advantages:

1. Internationally benchmarked regulatory environment: One of the key advantages of establishing a business in GIFT City is the favorable regulatory environment. As an IFSC, GIFT City operates under a specialized regulatory framework designed to promote ease of doing business, facilitate financial transactions, and attract foreign investment.

2. Tax advantages: Companies benefit from a 10-year income tax holiday, lower minimum alternate tax (MAT), and exemption from capital gains tax on the sale of units within GIFT City. Additionally, dividend distribution tax and long-term capital gains tax on investments made in India from GIFT City are also exempt.

3. Ease of doing business: Single window clearance, streamlined regulatory processes, and minimal documentation requirements make setting up and running a business smoother.

4. State-of-the-art infrastructure: GIFT City boasts world-class infrastructure, equipped with state-of-the-art facilities and amenities to support the needs of modern businesses. From cutting-edge office spaces and commercial complexes to advanced technology parks and data centers, GIFT City provides the necessary infrastructure to foster innovation, collaboration, and growth.

5. Strategic location: Strategically located in close proximity to major financial centers and economic hubs, GIFT City offers unparalleled connectivity and access to domestic and international markets. Its proximity to major airports, seaports, and highways facilitates seamless connectivity, making it an ideal location for businesses looking to expand their global footprint.

Setting up your business in GIFT City: A detailed step-by-step process

Establishing a business in GIFT City entails navigating a well-defined incorporation process. Below, we outline the step-by-step process of setting up a business in GIFT City:

Step 1: Market research and feasibility analysis

Before venturing into GIFT City, conduct thorough market research and feasibility analysis to assess the viability of your business idea. Identify target markets, analyze competition, and evaluate regulatory requirements to ensure alignment with your business objectives.

Step 2: Choose the right business structure

Selecting the appropriate business structure is crucial for establishing your presence in GIFT City. Whether it’s a company, partnership, or branch office, consider factors such as liability, taxation, and regulatory compliance before making a decision.

Step 3: Obtain the necessary approvals and clearances

Once you’ve decided on the business structure, obtain necessary approvals and clearances from regulatory authorities. This may include approvals from the IFSCA, Registrar of Companies (ROC), and other relevant bodies. Ensure compliance with regulatory requirements and documentation procedures to avoid any delays in the incorporation process.

Step 4: Office space selection

Identify suitable office space within the GIFT SEZ based on your business requirements and budget. GIFT City offers a wide range of office spaces, including plug-and-play offices, co-working spaces, and custom-built facilities, to accommodate diverse business needs.

Step 5: Obtain the Provisional Letter of Allotment (PLOA)

Upon finalizing the office space agreement with the SEZ developer, obtain a Provisional Letter of Allotment (PLOA) to secure your chosen premises within the GIFT SEZ. The PLOA serves as official confirmation of the allocated office space for your business.

Step 6: Application submission to SEZ authorities

Prepare and submit Form F along with the requisite annexures to the Office of the Development Commissioner (ODC) for approval. Annexures typically include the PLOA, detailed project report, entity ID documents, board resolution, certificate of incorporation, and financial statements.

Step 7: Unit Approval Committee (UAC) meeting

The ODC convenes a meeting with the Unit Approval Committee (UAC) to review your application and business proposal. Your authorized representative presents the case on your behalf, highlighting the merits of your business venture.

Step 8: Receipt of the Letter of Permission (LOP)

If the UAC approves your application, you will receive a Letter of Permission (LOP) from the ODC, granting you permission to establish and operate your business in GIFT City.

Step 9: Lease deed execution

Sign a lease deed with the SEZ developer to formalize your occupancy of the chosen office space within the GIFT SEZ. The lease deed outlines the terms and conditions of the lease agreement, including rent, tenure, and other relevant clauses.

Step 10: SEZ license and NSDL portal registration

After obtaining the LOP, apply for the SEZ license from the ODC and register with the NSDL portal for SEZ online registration. This registration facilitates compliance with SEZ regulations and enables access to various services related to import, procurement, and taxation.

Step 11: Acquisition of registration certificates and exemption eligibility

The entity must obtain a Goods and Services Tax (GST) registration certificate for sales tax purposes. Additionally, it should apply for a Registration-Cum Membership Certificate (RCMC) certificate for import-export activities and an Import Export Code (IEC) code for international trade. It may also qualify for exemptions from income tax, customs duty, and other taxes based on specific government schemes.

Step 12: Registration with IFSCA

Prior to commencing operations, it’s imperative to register formally with the International Financial Services Centres Authorities (IFSCA). Submit your application along with the requisite fees to obtain your Certificate of Registration, which authorizes your business to operate within GIFT City’s regulatory framework.

For more information reach out to CA Neetu Jain