Register as a Fund Management Entity (FME) in IFSC in 2025
India’s GIFT IFSC (International Financial Services Centre, Gandhinagar) has become the country’s most attractive jurisdiction for global fund management. With the IFSCA (Fund Management) Regulations, 2025, the framework has been made more flexible, efficient, and investor-friendly—unlocking greater opportunities for asset managers, fund sponsors, and wealth platforms.
At the core of this ecosystem is the Fund Management Entity (FME), the regulatory vehicle through which managers establish and operate funds, PMS, and other investment structures in IFSC.
What is a Fund Management Entity (FME)?
An FME is a licensed entity under the International Financial Services Centres Authority (IFSCA) that can:
- Launch and manage Alternative Investment Funds (AIFs)
- Operate mutual funds and ETFs
- Provide Portfolio Management Services (PMS)
- Manage other permissible structures within IFSC
In practice, the FME is the fund manager—responsible for structuring funds, raising capital, and managing portfolios.
Categories of FMEs in 2025
Under the FM Regulations 2025, FMEs can register in three categories, each with different scopes and net-worth thresholds:
- Authorised FME – Net worth requirement: USD 75,000
- Registered FME (Non-Retail) – Net worth requirement: USD 500,000
- Registered FME (Retail) – Net worth requirement: USD 1,000,000
Key Updates in 2025
The revised regulations bring significant improvements that make fund management in IFSC more practical and globally competitive:
- Lower minimum corpus:
- Non-retail and retail schemes can now launch with USD 3 million (down from USD 5 million).
- Open-ended funds may start with USD 1 million, scaling to USD 3 million within 12 months.
- Extended fundraising window: PPM validity increased to 12 months (with a one-time 6-month extension option).
- Manager commitment flexibility: FMEs and associates can now contribute up to 100% of the scheme corpus (earlier capped at 10%).
- PMS made accessible: Minimum PMS ticket size reduced to USD 75,000 (from USD 150,000).
- Operational flexibility:
- Temporary parking of un-deployed funds in bank deposits/overnight schemes is allowed.
- Listing of close-ended retail schemes is now optional if each investor contributes at least USD 10,000.
- Global expansion: FMEs may establish foreign branches or representative offices for marketing and client servicing with only intimation (no prior approval).
Third-Party Fund Management Services (TFMS) – New in 2025
A landmark addition in 2025 is the TFMS platform model, enabling an FME to manage restricted schemes on behalf of third-party fund managers without an IFSC presence.
- Additional net worth required: USD 500,000 over the base FME category.
- Scheme size range: USD 3 million – USD 50 million.
- Governance: Each scheme must have a dedicated Principal Officer and a Compliance Officer.
- Responsibility: The registered FME remains accountable for compliance and investor protection.
This framework allows foreign managers to test IFSC with smaller funds while leveraging an Indian partner FME.
Eligibility Criteria to Register as an FME
To be approved as an FME in IFSC, an applicant must:
- Be incorporated as a company, LLP, or branch of a foreign entity in IFSC
- Maintain the prescribed net worth for its chosen category
- Meet the “fit and proper” standards relating to integrity, reputation, and financial soundness
- Appoint qualified Key Managerial Personnel (KMPs) such as Principal Officer, Fund Manager(s), and Compliance Officer
Registration Process
- Application Filing – Submit prescribed application with supporting documents to IFSCA.
- Regulatory Review – IFSCA examines governance, compliance framework, and financials.
- Approval & Certification – Upon satisfaction, a Certificate of Registration is issued.
- Post-Registration Compliance – Appointment of KMPs, reporting obligations, custodian/valuation arrangements, and ongoing filings.
Why Register in IFSC in 2025?
- Access to global and Indian investors through a tax-neutral and flexible platform
- Globally benchmarked regulations with simplified compliance pathways
- Lower entry barriers with reduced corpus requirements and PMS ticket size
- Operational freedom including cross-border expansion and platform partnerships
- Strategic positioning as India’s alternative to Singapore, Mauritius, and DIFC
How Nexpective Advisors Can Help
At Nexpective Advisors, we specialise in IFSC advisory with 15+ years of expertise in fund structuring, valuation, taxation, and compliance. With offices in GIFT City and Vadodara, our team of Chartered Accountants, Company Secretaries, Registered Valuers, and legal experts provide:
- FME Registration Support – Category selection, application filing, and regulatory interface
- Fund Setup & Structuring – AIFs, retail schemes, PMS, and TFMS authorisation
- Compliance Management – Reporting, governance, and regulatory filings
- Cross-Border Solutions – Structuring foreign investor entry and global fund strategies
Final Word
Registering as a Fund Management Entity (FME) in IFSC in 2025 is a strategic gateway to India’s international fund management ecosystem. With the revised regulations lowering entry thresholds and expanding flexibility, fund managers can build scalable, globally competitive platforms from GIFT City.
Contact Nexpective Advisors today to navigate your FME registration and fund setup in IFSC with confidence.
