Benefits of Establishing an FME at GIFT IFSC

A New Era of Global Fund Management in India

As India positions itself as a global financial powerhouse, the Gujarat International Finance Tec-City (GIFT IFSC) is becoming the go-to destination for international financial services. One of its most impactful reforms is the introduction of the Fund Management Entity (FME) framework, a game-changer for fund managers, alternative investment platforms, and institutional investors.

At Nexpective Advisors, we help clients unlock the full potential of setting up their FME at GIFT IFSC, combining regulatory clarity, tax efficiency, and access to global capital under one powerful structure.

What is an FME at GIFT IFSC?

A Fund Management Entity (FME) is a licensed entity under the International Financial Services Centres Authority (IFSCA) that is authorized to manage funds, including Alternative Investment Funds (AIFs), Portfolio Management Services (PMS), and Mutual Funds, from within GIFT IFSC.

It offers a simplified, globally-aligned regulatory regime that allows fund managers to structure and manage investments across borders, all from within India’s first international financial hub.

Key Benefits of Establishing an FME at GIFT IFSC

1. Globally Competitive Fund Management Framework

• IFSCA has introduced a single, unified framework for fund managers, making it easier to operate multiple structures (AIFs, PMS, mutual funds) under one umbrella license.
• Regulatory compliance is streamlined compared to onshore regimes, allowing greater flexibility in managing domestic and offshore capital.

2. Tax Advantages for FMEs and Investors

• Zero capital gains tax for non-residents investing through GIFT IFSC on certain securities.
• 10-year tax holiday on business income for FMEs registered in IFSC.
• No GST on services received by units in GIFT IFSC from another IFSC unit.
• Pass-through status for eligible AIFs, ensuring income is taxed only at the investor level.

3. Access to Global Capital Pools

• FMEs in GIFT IFSC can raise and manage funds in foreign currencies.
• Provides a gateway for cross-border AIF investments with minimal restrictions.
• International investors view GIFT IFSC as a transparent, regulator-backed fund jurisdiction, increasing trust and participation.

4. Flexibility Across Fund Structures and Strategies

• Supports multiple fund types including:
  • Category I AIFs (venture capital, infrastructure, social impact funds)
  • Category II AIFs (PE, debt, structured credit)
  • Category III AIFs (hedge funds, alternative strategies)
• Enables innovative alternative fund investment strategies under a flexible and modern legal regime.

5. Reduced Regulatory Burden Compared to Domestic Jurisdictions

• No prior approval needed for setting up sub-funds or launching schemes.
• Simplified KYC and onboarding procedures aligned with global practices.
• Ease of doing business with single window clearances for FMEs and fund registration.

6. Robust Infrastructure and Global Connectivity

• World-class financial infrastructure with modern office space, fintech parks, and regulatory sandboxes.
• Real-time access to international stock exchanges and clearing systems.
• Support ecosystem includes custodians, depositories, auditors, and fund administrators located within GIFT City.

Why Nexpective Recommends GIFT IFSC for Fund Managers

At Nexpective Advisors, we specialize in helping fund managers, asset management companies, and high-net-worth investors set up compliant, future-ready structures at GIFT IFSC.

Our services include:

• End-to-end FME licensing under IFSCA
• Fund structuring for AIFs, PMS, and mutual funds
• Tax strategy and advisory for domestic and offshore investors
• Regulatory filings, ongoing compliance, and cross-border transaction support

Whether you’re launching a venture capital fund, a hedge fund, or a structured credit vehicle, Nexpective Advisors ensures you do it smarter, faster, and more efficiently at GIFT IFSC.

Conclusion – GIFT IFSC is the Future of Fund Management in India

By setting up an FME at GIFT IFSC, fund managers and investors gain access to a globally competitive, tax-efficient, and innovation-friendly ecosystem that rivals established hubs like Singapore and Dubai.

With simplified regulations, world-class infrastructure, and direct access to international markets, the benefits of FME in GIFT IFSC go far beyond compliance, they deliver unmatched strategic and financial advantages.