with a Domestic Tariff Area & a Multi Services SEZ
● GIFT SEZ- Notified as India’s 1st International
Financial Services Centre (GIFT IFSC)
● Employment opportunities for 1 Million
workforce
●A Greenfield Smart City
with State-of-the-Art Infrastructure
● A Vertical City 1st of its kind in the country in scale, scope & quality District Colling Plant Water Treatment Plant
Utility Tunnel
Automated Waste Collection & Segregation Plant
INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (IFSCA) INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
1 IFSCA has been established as a unified financial regulator by the Government of
India under the IFSCA Act, 2019
The Authority is mandated to develop and regulate Financial Institutions, Financial
2 Services and Financial Products in the International Financial Services Centre (IFSC) in India
To develop and regulate IFSC’s in India, IFSCA has been vested with powers of four 3 sectoral regulators namely- RBI*, SEBI*, IRDAI* & PFRDA*
*RBI- Reserve Bank of India, *SEBI- Securities and Exchange Board of India, *IRDAI- Insurance Regulatory and Development Authority & *PFRDA- Pension Fund Regulatory and Development Authority Overview - Opportunities The latest Global Financial Centers Index, London, (March 2021) puts IFSC in GIFT City at the top amongst 15 centers globally, which are likely to become more significant over the next two to three years
● Access to large hinterland economy ● Access to Global Investors to participate in India growth story ● Connecting ~30 Mn strong Indian diaspora globally to India through IFSC ● Opportunity to Global investors to set up business in the areas of banking, investments, insurance and asset ● Inbound and outbound gateway for International management financial services ● IFSC to emerge as a leading fund destination for both Indian and Foreign centric funds and as a global hub for fintech startups Overview - IFSC BUSINESS ACTIVITIES
BANKS CAPITAL MARKET ASSET MANAGEMENT
● Indian banks ● Stock/Commodity ● Alternate Investment Fund ● Foreign banks Exchanges ● Investment Advisers ● Clearing Corporation ● Wealth Management ● Depository ● Portfolio Manager ● Broker Dealer ● Custodial Services INSURANCE ● Indian Insurer Other Financial Institutions Emerging Activities ● Indian Reinsurer ● Finance Company ● Global Fintech Hub ● Indian Broker ● Global Corporate Treasury Centre ● Global inhouse centres ● Foreign Insurer ● International Trade Finance ● International Bullion Exchange ● Foreign Reinsurer Services Platform ● Aircraft Leasing & Financing ● Ancillary Services/Professional Service Providers Overview - IFSC COMPETITIVE TAX REGIME
● 100% Tax Exemption (for 10 out of 15 ● No Capital Gain Tax
years) ● Withholding tax @4% on interest paid on Debt ● Minimum Alternate Tax* @ 9% Instruments
● No CTT**/STT**/GST**/Stamp Duty ● Competitive AIF Tax Regime
* MAT provisions not applicable for companies opting for concessional tax rate under Sec. 115 BAA of Income Tax Act, 1961 **CTT- Commodity Transaction Tax, STT- Securities Transaction Tax, GST- Goods and Service Tax IFSCA: New Regulatory Regime IFSC Regulations Benchmarked with International Best Practices
IFSCA (Bullion IFSCA (Global In- Regulatory Sandbox IFSCA (Issuance and IFSCA (Banking) Exchange) House) Regulations Framework for Listing of Securities) Regulations 2020 Regulations 2020 2020 FinTech 2020 Regulations, 2021
IFSCA (Market IFSCA (Finance Framework For Framework for Framework for Global Infrastructure Company) Aircraft Leasing and Ancillary Services Corporate Treasury Institutions) Regulations, 2021 Finance 2021 2021 Centres in IFSC 2021 Regulations 2021
Framework for IFSCA (Capital IFSCA (Registration setting up IFSCA(Insurance IFSCA Banking Market of Insurance International Trade Intermediary) Handbook 2021 Intermediaries) Business) Financing Services Regulations, 2021 Regulations, 2021 Regulations, 2021 Platform (ITFS) 2021 GIFT IFSC: Key Number Highlights 4500+ $15 Bn Employment in GIFT SEZ compared to 2500 + employment in Sept. 2020 Stock Exchanges Avg. daily trading volume in August 2021 compared to $ 3.4 Bn in Sept. Entities licensed in 2020 GIFT IFSC* 250
$117 Bn 90 % Rise
Total Banking transactions till
September 2021 compared to $ 45 129 Bn in Sept. 2020
₹ ≈2240 Cr. $117 Bn
Services export from IFSC from Derivative transactions by IBUs till Oct. 2020 to July 2021 September 2021 compared to $ 22 Bn in Sept. 2020 Upto Sept 2020 Upto Sept 2021
*Including entities who have either applied to IFSCA or obtained SEZ IFSC approval IFSC- Emerging Business Opportunities
International Bullion Alternate Investment Aircraft leasing &
Global FinTech Hub Exchange Funds (AIF) Financing
Listing of Securities on Global Inhouse Centers Insurance &
Ancillary Services IFSC Exchanges (GIC) Reinsurance business
International Trade Portfolio Management
Global Corporate Finance Services Finance Company Services (PMS)/ Treasury Centre Platform (ITFS) Investment Advisors Opporunties for Japanese Investors Banking Opporunties IFSC Banking Business
BUSINESS ACTIVITIES
Commerical Banking Wealth Management
Who Can Trade Finance Private Banking
Indian Foreign Banks Set up IFSC Banks Banking Unit (IBU) Retail Banking Bullion Trading
Custody Services Derivative Products
Insurance Opporunties IFSC Insurance Business Permitted Entities in IFSC BUSINESS ACTIVITIES
1. Indian Insurer or Reinsurer • Lower capital requirement for setting up an IFSC
Insurance Office i.e. USD 1.5 Million 2. Foreign Insurer or Foreign Reinsurer • Assigned Capital and Solvency to be maintained at Parent level 3. Branch office of Foreign Insurer or • IIOs can transact business within IFSC, from other SEZs, from outside India and from India under 2CB of Llyod’s India Insurance Act 4. A Public Company • Incase of branch of foreign reinsurer Eligibility with Lower Net Owned Funds requirement of Rs 1000 5. An Insurance Co-operative Society Crores ( USD 137 Mn)
6. A Body Corporate • Setting up of regional head quarters for Asian market
7. Society of Lloyds’ • 100% Tax holiday period extended to 10 years out of
any 15 years. No GST on services rendered in IFSC or 8. Managing General Agent (MGA) to an IFSC unit • IIOs can issue foreign currency denominated policies Fund Administration Opporunties Funds Regime at GIFT IFSC Regulatory Conditions Particulars Amount
Minimum corpus requirement for each scheme of the AIF USD 3,000,000
Minimum Minimum investment by an investor in AIF Requirements • For employees or directors of the Manager USD 40,000 • For other investors USD 150,000
Minimum 2; Maximum Number of investors per Scheme 1,000
• Investment manager/ sponsor to have adequate experience, professional qualification and necessary infrastructure • Schemes to be open ended or close ended • Category III AIF permitted to take leverage subject to limits and investor consent Others • Mandatory to appoint custodian for safekeeping of securities • Raising of funds strictly on private placement basis • Key documentation include PPM, trust deed/ LLP agreement, contribution and investment management agreement
18 Inbound investment - AIFs in IFSC
Foreign Invests in foreign currency Sponsor
Investors contribution
Resident sponsor contribution, if any is subject to
Offshore investments India investments - FPI/FDI/FVCI route
Offshore shares, debt, Indian shares, debt,
Securities listed on Indian listed and Units of AIFs, REITs, derivatives, mutual Companies in IFSC derivatives, mutual IFSC exchange unlisted companies InvITs funds etc. funds etc.
* IFSC Manager can act as a sponsor
FinTech Opporunties GIFT IFSC: Key Enablers for FinTech Hub
01 02 03 04 Collaborate with IFSCA: Unified Access to Diverse Access to Vast Financial Institutions Financial Regulator Market Talent Pool in GIFT IFSC • Regulatory Sandbox • Access Global • Access to • Industry Exposure Framework Markets Technology • Funding Support • Fast-track Approvals • Access Domestic talent (STEM) • Large Customer • Overseas Regulatory Economy • Access to Base Collaboration • Access market in Financial talent • Problem Statement IFSC • Access to Business talent IFSCA: Proactive Support for FinTech Firms
Networking Support Mentoring Support
• Connect early-stage Start-ups • Incubators and Accelerators to with Global and Domestic connect FinTech firms with Investors technology experts and • Promote global tie-ups and financial sector experts collaboration with Angel • Promote peer to peer learning Investors and VC Funds
Regulatory Support State of Art Infrastructure
• Fast track approvals and end to • Modern workstations with end facilitation access to critical resources • Access to relevant Market Data • Establish world class FinTech Incubators and Accelerators IFSCA: Framework for Regulatory Sandbox With a vision of making GIFT IFSC a global hub for Fin-tech innovation and striving towards making it an attractive destination for global capital, IFSCA issued the Framework for Regulatory Sandbox in October 2020.
1 Regulatory Sandbox 2 Innovation Sandbox
• Eligible Entities operating in • Innovation Sandbox will be a the capital market, banking, testing environment where insurance and financial FinTech firms can test their services space shall be solutions in isolation from granted certain facilities the live market, based on and flexibilities to market related data made experiment with FinTech available by the Market solutions in a live Infrastructure Institutions environment with a limited (MIIs) operating in IFSC. set of real customers for a limited time frame.
