SPV-Based Leasing in GIFT IFSC: A New Regulatory Architecture for Global Asset Financing

The International Financial Services Centres Authority (IFSCA) has proposed an important development in the regulatory architecture for leasing activities in GIFT IFSC—a dedicated framework for undertaking leasing transactions through Special Purpose Vehicles (SPVs).

The proposal forms part of IFSCA’s consultation paper dated August 13, 2026 on the consolidated Framework for Leasing Activity in the International Financial Services Centre. While the draft seeks to bring aircraft, ship and other eligible equipment leasing under a common framework, the introduction of a formal SPV structure is particularly relevant from an international asset-financing perspective.

The significance of the proposal lies not merely in permitting another legal vehicle. It seeks to create a regulated structure through which high-value assets may be held and leased through transaction-specific entities, while retaining governance, substance and compliance requirements within the IFSC ecosystem.

What is an SPV under the Proposed IFSCA Leasing Framework?

The draft framework defines a Special Purpose Vehicle as a Finance Company incorporated or administered, or both, by a Trust and Company Service Provider (TCSP), in such manner as may be specified by IFSCA, for undertaking permissible activities.

In practical terms, an SPV provides a structure under which a separate Finance Company may be used for holding and undertaking leasing activity in relation to eligible assets.

For example, instead of a leasing group necessarily holding its entire asset portfolio directly through one principal leasing entity, qualifying assets may be housed through appropriately structured SPVs within GIFT IFSC.

Importantly, the SPV is not contemplated merely as a passive asset-holding company. It remains a regulated Finance Company operating within the framework prescribed by IFSCA.

The proposed regime is also clearly targeted towards high-value assets. An SPV may hold more than one eligible product or equipment, but the acquisition cost of each such asset must be USD 10 million or above.

Why SPVs are Relevant to Global Asset Leasing

SPVs are widely used in international asset-financing transactions because individual aircraft, ships and other high-value assets often have their own financing arrangements, lenders, investors, lease terms and security packages.

From a transaction-structuring perspective, an SPV can facilitate asset-level ownership and allow contractual and financing arrangements to be organised around particular assets or portfolios.

Depending on the commercial structure, SPVs may also support clearer segregation of transactions, lender security arrangements, investor participation, refinancing and transfer of particular assets or portfolios.

These are commercial characteristics commonly associated with SPV-based asset-financing structures and should be distinguished from the specific regulatory benefits expressly provided under the IFSCA framework.

The relevance of the proposed regime therefore lies in formally accommodating such transaction-specific vehicles within the GIFT IFSC leasing ecosystem.

The Role of TCSPs in the SPV Framework

A distinctive feature of the proposed framework is the role assigned to the Trust and Company Service Provider.

The SPV must have an arrangement with a TCSP to ensure compliance with applicable regulatory and other requirements. It is also required to designate a clearly identifiable person responsible for compliance.

This introduces an institutional support layer into the SPV model.

Conceptually, the proposed architecture combines:

Transaction-specific SPV + TCSP-supported compliance and administration + IFSCA regulatory oversight.

The TCSP model may be particularly relevant where sponsors or leasing platforms intend to establish multiple asset-holding vehicles and require a consistent framework for administration and regulatory compliance.

However, TCSP involvement does not eliminate the substance and governance requirements applicable to the SPV itself.

Substance and Governance Remain Central

The proposed SPV framework should not be viewed as facilitating shell or zero-substance entities.

IFSCA has prescribed specific operational and governance requirements for an SPV. It must have at least one director, equivalent-level individual or officer stationed in the IFSC and a minimum of two employees responsible for specified AML/KYC compliance requirements and other business operations.

The SPV must also:

• remain an independent entity separate from its originator;
• have at least one independent director or equivalent person; and
• maintain governance, operational continuity and structural safeguards commensurate with the nature of the transaction.

Further, the SPV cannot undertake any other independent commercial activity. This reinforces its character as a special-purpose vehicle established specifically for permitted leasing transactions.

Accordingly, the proposed structure reflects a deliberate balance between transaction flexibility and regulatory substance.

The framework can broadly be understood as:

Asset SPV + TCSP support + local substance + independent governance + regulatory oversight.

Simplified Application and Registration Framework

The draft also introduces certain regulatory facilitations for SPV structures.

An applicant proposing to operate as an SPV for Financial Lease, including hybrid operating and financial lease activity under clause 11(1)(b), is proposed to apply through a simplified application form as specified by IFSCA.

This provision should be read carefully, since the draft presently links the simplified application route specifically to the activity referred to in clause 11(1)(b), rather than to every category of leasing activity.

The framework also addresses situations where a lessor intends to establish separate entities for holding individual assets. Ordinarily, such entities would require separate registration. However, the draft provides that the requirement for separate registration shall not apply where the entity is established in the form of an SPV.

This is potentially significant for leasing platforms managing multiple high-value assets, as it can reduce duplication in the regulatory structure while preserving IFSCA oversight.

At the same time, the SPV remains subject to applicable requirements under the leasing framework and the Finance Company Regulations. The proposal should therefore be viewed as regulatory facilitation within a supervised framework, rather than an exemption from regulation.

Conclusion

The proposed SPV-based leasing framework in GIFT IFSC represents an important evolution in India’s international leasing ecosystem.

By formally recognising transaction-specific SPVs, integrating TCSP-supported compliance, prescribing minimum substance and governance requirements, and providing targeted regulatory facilitation, IFSCA is creating an architecture that is more aligned with the structural requirements of high-value international leasing transactions.

The framework is particularly relevant for aircraft, ships, ocean vessels and other qualifying equipment where asset-level ownership and financing structures are commonly used.

Its broader significance lies in enabling GIFT IFSC to support not only leasing businesses, but also the underlying ownership and financing structures through which global leasing transactions are organised.

If implemented substantially in its proposed form, the SPV framework could become an important component of GIFT IFSC’s development as a jurisdiction for sophisticated cross-border asset leasing and financing.

The above discussion is based on the IFSCA consultation paper dated August 13, 2026. The framework is presently in draft form and may undergo changes before final issuance.