GIFT City (IFSC) Investments

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What is GIFT City (IFSC)?

GIFT City (Gujarat International Finance Tec-City) is India’s first International Financial
Services Centre (IFSC). It provides globally competitive investment opportunities in a tax-
efficient environment. Through GIFT City, investors can access USD-denominated products
such as global mutual funds, ETFs, international bonds, structured notes, and alternative
investments without the need to open a foreign brokerage account.

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How it differs from regular investing

  • Investments are denominated in USD, enabling natural currency diversification.
  • Offers access to global markets that are not available through domestic mutual funds.
  • IFSC provides potential tax advantages on specified categories of interest, dividends, and capital gains as per applicable regulations.
  • Regulated by the International Financial Services Centres Authority (IFSCA), ensuring transparency and adherence to global market standards.
  • Allows Indian residents to invest globally under the Liberalized Remittance Scheme (LRS) through a simplified structure.

Key features and benefits

  • Wide array of international investment options offered via GIFT City platforms.
  • Tax-efficient framework designed to potentially enhance overall investment returns.
  • Seamless onboarding and simplified investment processes.
  • Enables global diversification without the operational complexities of overseas accounts.
  • Exposure to USD assets provides a hedge against INR depreciation.

GIFT City investments suit investors who:

  • Seek global diversification in their portfolios.
  • Are looking for tax-efficient investment structures for long-term wealth creation.
  • Prefer USD-denominated assets for currency diversification and hedging.
  • Want to access offshore products within the regulatory framework without opening overseas accounts.

Investors should note that investments involve market and currency risks, and product complexity may vary, especially with structured notes and alternative investments. The tax treatment depends on the investor’s profile, product type, and holding period. It is advisable to consult a tax or financial advisor before investing.

Who should avoid it?

  • Ultra-conservative investors who prefer fully domestic investment exposure.
  • Those uncomfortable with global market or currency volatility.
  • Investors not willing or able to comply with regulatory and tax requirements applicable to IFSC investments.

Disclaimer: Investments in securities are subject to market and currency risks. Investors should carefully read all offer documents and seek independent financial and tax advice before investing.