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New framework for Foreign Portfolio Investors (“FPI”) at GIFT City

13 May 2024

Amrita Arvind Divay and Ramesh Dara

A significant milestone has been reached for funds operating within the GIFT City International Financial Services Centre (“IFSC”).

The Securities and Exchange Board of India (“SEBI”) has recently announced a groundbreaking decision to permit up to 100% participation by non-resident Indians (“NRIs”) and overseas citizens of India (“OCIs”) in IFSCA-regulated FPIs. This marks a pivotal shift from the previous limit of 50% ownership for NRIs and OCIs in FPIs based in GIFT City.

In simpler terms: FPIs based in GIFT City IFSCs can now accept 100% contribution from any one of the three categories of investors: NRIs, OCIs, and resident Indians (“RIs”).

Enhancing ease of doing business for foreign investors 

This regulatory change not only enhances the ease of doing business for foreign investors but also underscores the Indian government's commitment to fostering a conducive environment for international investment. The relaxation of ownership limits is expected to yield significant benefits for FPIs operating within GIFT City, relieving them of previous constraints related to NRI/OCI contribution thresholds. With increased regulatory scrutiny in other fund jurisdictions, GIFT City is poised to gain significant interest among General Partners and Limited Partners when choosing the domicile for their fund. Existing FPIs may consider the option of redomiciling their investment vehicles.

This augurs well for increased foreign investment in India.  

How can we help?

We are one of the largest Single source solution providers for all requirements from asset and investment managers ranging from capital raise, fund services, financial services and corporate services globally and has a presence at GIFT City with a 20,000 sqft office. This signifies not only growth but also a commitment to providing exceptional service to our clients. 

Let's collaborate to make significant strides at GIFT City and contribute to the growth of India's international financial services hub. We are ready to support the relocation of funds to GIFT City IFSC or the establishment of new funds. 

To learn more about our services and solutions at GIFT City IFSC, contact us.


*SEBI press release dated April 30 2024

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