GIFT City, or Gujarat International Finance Tec-City, is India’s first operational greenfield smart city and international financial services center. It is a business district that offers a range of services, such as banking, capital markets, insurance, fintech, and more, supported by the Government of India and Gujarat, with cutting-edge infrastructure and sustainability.
In this blog post, we will explore the benefits of operating in GIFT City, as shared by Mr Maya Sharan Singh, the Director of Lares, a leading hedge fund management company. Mr Maya Sharan Singh has extensive experience and expertise in finance and technology.
GIFT City’s Role in Access Global Financial Solutions
One of the main benefits to entities operating in GIFT City operating in GIFT City is that it provides global access to reach out for innovative financial solutions that are not available in the domestic market.
Some of the financial solutions that GIFT City enables Indian companies to access are:
- We are raising funds from foreign investors in foreign currency, without any restrictions on capital account convertibility.
- Offering products and services in foreign currency, such as banking, insurance, capital markets, asset management, etc.
- Investing in foreign assets, such as equities, bonds, commodities, derivatives, etc.
- Leasing ships and aircraft through GIFT City, rather than on foreign shores, to save on taxes and fees.
- Setting up family offices, fintech companies, biotech companies, and other innovative ventures in GIFT City, to leverage the talent, technology, and infrastructure available there.
Why GIFT City is an Alternative to Dubai, Singapore, and Hong Kong
One of the main benefits of operating in GIFT City is that it provides a global platform for financial and technological businesses to cater to customers outside the Indian jurisdiction. GIFT City is designed to compete with other international financial centers, such as Singapore, Dubai, and Hong Kong, by offering a conducive regulatory environment, tax incentives, and ease of doing business. Also, know about the benefits of investing in GIFT City, go through it now.
Some of the attractive features for entities operating in GIFT City:
- It has India’s first international financial services center (IFSC), which allows entities to conduct transactions in foreign currency and offer products and services that are not available in the domestic market.
- Its multi-service special economic zone (SEZ) provides various benefits, such as exemption from customs duty, goods and services tax (GST), stamp duty, and income tax for a specified period.
- It has a domestic tariff area (DTA), which caters to the domestic market and offers facilities such as banking, maritime cluster, finance, insurance, IT and ITES, engineering, fintech, automobile, capital market, pharmaceuticals, and biotech.
- It has state-of-the-art infrastructure, such as a utility tunnel, a city command and control center, a district cooling system, a smart water infrastructure, a power infrastructure, and an automated waste management system.
- It has a walk-to-work concept, which provides social facilities such as schools, clubs, parks, etc., enhancing the quality of life for its residents.
GIFT City: A Testimony of India’s Economic Potential
The benefit of operating in GIFT City is that it showcases India’s economic potential and vision to the world. GIFT City is a testimony of India’s commitment to creating a world-class finance and IT zone for India and the world. It is a flagbearer for smart cities in India and sets an international benchmark for finance and technology hubs worldwide.
Mr Maya Sharan Singh, Director of Lares Algotech, believes that GIFT City is a strategic location for businesses to tap into the opportunities and challenges of the Indian and global markets. He says, “GIFT City is a gateway to India’s vast and diverse market, as well as a bridge to the global market. It offers a competitive edge to businesses that want to leverage the best of both worlds. It is a reflection of India’s economic prowess and potential, as well as its aspiration to be a global leader in finance and technology.”
Conclusion
GIFT City is a futuristic city that offers a range of benefits of operating in GIFT City there. It is a global financial and technological hub that provides access to financial solutions that are not available in the domestic market. It is a viable alternative to jurisdictions such as Dubai and Singapore, which are popular destinations for offshore financial activities. It is a source of benefits to Indian entities, such as tax exemptions, access to skilled professionals, access to state-of-the-art infrastructure, and access to a vibrant ecosystem of financial and technological players. GIFT City is a place where entities can unleash their potential and achieve their goals.
Frequently Asked Questions about GIFT City:
1. What are the tax benefits of GIFT City Ahmedabad?
GIFT City offers several tax benefits, including:
- 10-year tax holiday: IFSC units operating in GIFT City are exempt from income tax for the first 10 years of operation.
- Minimum Alternate Tax (MAT) at 9%: This significantly lower rate compared to the domestic 15% MAT provides substantial relief.
- Exemption from various taxes: These include customs duty, goods and services tax (GST), stamp duty, and dividend distribution tax (DDT).
- Capital gains tax exemptions: Long-term capital gains (LTCG) on securities are exempt for qualified Indian residents investing in GIFT City.
2. Who owns GIFT City?
GIFT City is a joint venture between the Government of India (GoI) and the Government of Gujarat, with 50% equity stake each. Additionally, several state-owned and private institutions are involved in developing and managing the city.
3. How does GIFT City affect the economy of India?
GIFT City is envisioned to contribute to the Indian economy by:
- Attracting foreign investments and fostering the development of international financial services within India.
- Creating high-skilled job opportunities and boosting economic growth.
- Acting as a gateway for Indian companies to access global markets and raise capital.
- Strengthening India’s position as a financial hub in Asia.
4. Is GIFT City a SEZ?
Yes, GIFT City includes a Multi-services Special Economic Zone (SEZ) with additional benefits like exemption from excise duty and direct taxes on import of goods for authorized operations.
5. Which companies are coming to GIFT City?
Several notable companies across various sectors, including finance, IT, biotechnology, and fintech, have already set up operations in GIFT City. Some prominent names include:
- ICICI Bank
- Axis Bank
- HDFC Bank
- India International Exchange (INX)
- Deutsche Bank
- National Stock Exchange (NSE)
- Dubai Mercantile Exchange (DME)
- Capgemini
- TCS
6. What is the future plan of GIFT City?
The future plans for GIFT City involve further expansion and development, including:
- Expanding the IFSC and attracting more international financial institutions.
- Diversifying the range of business activities allowed in the SEZ.
- Developing more residential and social infrastructure to create a truly “live-work-play” environment.
- Enhancing connectivity with Ahmedabad and other major cities.
