Drawing foreign investors
GIFT City is set to put India on the global financial map
In the backdrop of the country’s rapid financial growth and robust projections, the GIFT City financial and technology gateway assumes great significance. Formed by Gujarat International Finance Tec-City Company Limited, the Gujarat International Finance Tech City (GIFT) is a planned and integrated business district near Gandhinagar in Gujarat, with International Financial Services Centre (IFSC) status.
Built on 886 acres with 62 million sq. ft. of built-up area, GIFT City is conceived as a smart city, with modern urban planning that adheres to energy and environment conservation policies. About 20 per cent of the proposed greenfield development at GIFT City has been completed in the last 10 years. The project has attracted investments of ₹11,000 crore in Phase I and about ₹2,000 crore has been spent on infrastructure. Currently, 225 units employ a workforce of more than 10,000.
Synopsis
Foreign hedge funds can now operate in International Financial Services Centres in the country without getting a permanent account number, or PAN.
Agencies
Foreign hedge funds can now operate in International Financial Services Centres in the country without getting a permanent account number, or PAN. Foreign investors of category III alternative investment funds (AIFs) operating in IFSCs will not require PAN if they deduct tax from their income and provide details of investors’ name, address, country of residence and Tax Identification Numbers every quarter, the Central Board of Direct Taxes notified on Tuesday.
Category III AIFs include hedge funds. The board had already granted this exemption to foreign investors of AIF categories I and II. The move follows a representation by International Financial Services Centres Authority (IFSCA), an official said, adding, “This would pave way for a large number of category III AIF establishing a base in IFSCs.”
Law firms are getting interested in the gifts of the GIFT (photo via GIFT)
IC Universal Legal last week opened an office in the
Gujarat International Finance Tec-City (GIFT), with
Cyril Amarchand Mangaldas, hot-on-its-heels, announcing today that it had also done so.
The two law firms’ moves follow a new February 2021 regulatory regime in the GIFT special economic zone (SEZ) announced last month. J Sagar Associates (JSA) after having been first to open in the GIFT in 2017, had not renewed its licence during the pandemic.
IC Universal wrote in a statement last week: “The firm has opened its branch office in GIFT IFSC and has become the first law firm to receive the regulatory authorisation from International Financial Services Centres Authority (IFSCA) to provide legal, regulatory and compliance services from IFSCs.”
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Tuesday, April 13, 2021
Introduction
Over the past few months there has been a flurry of developments involving the Gujarat Internal Finance Tech-City (“GIFT City”). New guidelines are being issued and MOUs executed with financial institutions on a weekly basis, all with the aim of incentivizing overseas financial institutions and overseas branches /subsidiaries of Indian financial institutions to bring to Indian shores those financial services transactions that are currently carried on outside India. The underlying key to this incentivization is the International Finances Services Centre (“IFSC”) which is set up in the special economic zone (“SEZ”) within GIFT City. While the IFSC is technically located on Indian soil, it is considered an offshore jurisdiction for foreign exchange purposes, allowing investors to invest in businesses located within the IFSC without having to comply with India’s foreign exchange regime. Special tax incentives have also been p