How Do the New Fund Management Regulations Impact Fund Setup in GIFT City? – Corpzo, Delhi, India
- Corpzo Ventures Private Limited
- Jun 21
- 4 min read
📩 reach@corpzo.com | 📞 +91 9999 139 391 | 🌐 www.corpzo.com
Introduction: GIFT City – India’s Emerging Global Financial Hub
India’s first International Financial Services Centre (IFSC), GIFT City, has emerged as a game-changing destination for global finance, investment, and fintech innovation. With world-class infrastructure, tax incentives, and a progressive regulatory environment, GIFT City is now competing with international hubs like Singapore and Dubai.
One of the major catalysts for this transformation has been the IFSCA (Fund Management) Regulations, 2022 — a comprehensive framework introduced by the International Financial Services Centres Authority (IFSCA) to regulate fund management entities (FMEs) in the IFSC.
These regulations simplify the process of setting up Alternative Investment Funds (AIFs), mutual funds, portfolio management services (PMS), and investment advisory firms within GIFT City, offering flexibility, clarity, and global investor-friendly norms.
In this blog, Corpzo, a trusted compliance partner based in Delhi NCR, explains how these new regulations impact fund setup in GIFT City — and why now is the best time for Indian and foreign fund managers to launch operations here.
The Fund Management Regulations, 2022 consolidate and replace earlier guidelines issued by IFSCA, creating a unified regulatory framework that:
Simplifies the classification of fund managers
Encourages foreign capital inflow
Permits innovation in fund structuring
Enables easier fundraising and investor onboarding
Introduces flexible currency, tax, and operational rules
Key Types of Fund Managers Under the Regulations
The new regulations define three categories of FMEs (Fund Management Entities), each with specific rules:
1. Retail FME
Can manage retail schemes like mutual funds
Higher compliance and capital requirements
Suitable for large-scale public fund offerings
2. Non-Retail FME
Can manage Category I, II, and III AIFs
Most popular route for private funds, PE, VC, hedge, and debt funds
Minimum net worth: USD 300,000 (approx ₹2.5 crore)
3. Authorised FME (Portfolio Manager/Investment Adviser)
Can offer discretionary/non-discretionary PMS and advisory services
Light-touch compliance framework
Suitable for wealth managers and family offices
Key Impacts of the New Regulations on Fund Setup in GIFT City
Let’s explore how the 2022 regulations have made fund formation in GIFT City more attractive:
1. Simplified Onboarding & Classification
The regulations eliminate the confusion around multiple licenses. Now, any applicant can choose their category — Retail, Non-Retail, or Authorised FME — based on business scope.
Impact:✅ Faster approvals✅ Clarity in structuring (no more ambiguity between PMS, AIF, or advisory licenses)
2. Low Entry Barriers for AIF Managers
For Non-Retail FMEs (i.e., AIF managers), the minimum capital requirement is just USD 300,000, which is considerably lower than the cost of launching funds in global jurisdictions like Singapore.
Impact:✅ Startups, family offices, and new-age fund managers can enter the space✅ Even foreign asset managers can set up Indian funds with ease
3. Tax Incentives for FMEs and Investors
GIFT City offers some of the most favorable tax treatments in India:
Zero capital gains tax on offshore investors investing through AIFs in GIFT City
10-year tax holiday for FMEs under Section 80LA
No GST on management fees
No securities transaction tax (STT)
Impact:✅ Boosts after-tax returns✅ Makes India globally competitive for fund domicile✅ Encourages USD-denominated funds for foreign investors
4. Foreign Investors Can Freely Participate
The new framework allows international LPs and sponsors to invest and co-manage funds without FEMA restrictions.
Units can be issued in foreign currencies
Repatriation and redemption simplified
Onboarding of foreign LPs does not require RBI approvals
Impact:✅ GIFT City becomes a viable alternative to Mauritius or Cayman✅ Funds can target NRI, HNI, institutional, and sovereign wealth investors
5. Innovation in Fund Structures
Fund managers in GIFT City can now set up:
Open-ended or close-ended AIFs
Funds with multiple share classes
USD or INR denominated funds
Funds with international investments
ESG, fintech, real estate, or crypto-focused funds (subject to permissions)
Impact:✅ Customizable structures to suit investor needs✅ Modern alternatives to rigid SEBI-regulated fund formats
6. Unified Filing and Compliance Platform
IFSCA has introduced a digital-first approach with centralized filing systems for:
Fund registration
Periodic disclosures
KYC/AML compliance
Audited financials and valuation reports
Impact:✅ Reduces paperwork✅ Improves compliance efficiency✅ Enables remote management
7. Physical Presence Requirement Simplified
While FMEs must maintain a presence in GIFT City, the rules now allow for:
Shared office spaces
Virtual compliance offices
Remote teams with only key decision-makers stationed in GIFT
Impact:✅ Firms in Delhi NCR or Mumbai can still launch in GIFT City✅ Corpzo helps establish co-working offices within the SEZ
Though GIFT City is located in Gujarat, you don’t need to relocate your core operations to benefit from its incentives. With Corpzo, based in Delhi NCR, you can set up and manage your fund entirely online, with full compliance and documentation handled remotely.
Corpzo Services Include:
Company/LLP formation in GIFT SEZ
FME license application filing
AIF registration and PPM drafting
Shared office arrangements
Regulatory compliance management
Valuation and audit support
Investor onboarding, KYC/AML
RBI, SEZ, and IFSCA liaison
✅ Deep Expertise in IFSCA Regulations
We’ve helped multiple fund managers, family offices, and fintech players successfully establish GIFT operations.
✅ End-to-End Virtual Execution
From our Delhi base, we serve clients across India and globally—zero travel required.
✅ Affordable Pricing Plans
No inflated consulting fees. Transparent packages for setup and maintenance.
✅ Comprehensive Post-Setup Support
Annual compliance, reporting, and audit handled by experts.
Conclusion: A Golden Era for Fund Managers in India
The IFSCA Fund Management Regulations, 2022, have created a fertile ground for innovation, global capital flow, and wealth creation via GIFT City. Whether you’re a startup VC, a seasoned PE manager, a global hedge fund, or a family office—now is the perfect time to set up your fund in India’s newest global financial center.
And with Corpzo by your side, the process is not only faster but also fully compliant and cost-effective.
Start Your GIFT City Fund Journey Today with Corpzo
📍 Based in Delhi NCR | Serving All India & Global Clients
📞 Call Us: +91 9999 139 391📩 Email: reach@corpzo.com🌐 Visit: www.corpzo.com
Corpzo – India’s Trusted Partner for Fund Setup in GIFT City, IFSC.Expert. Efficient. Affordable.
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