Think of Singapore, Dubai or even Morocco and their image as world-class financial hubs is matched by the sheer number of global majors making their presence felt in these cities and their special economic zones. The vast breadth and depth of activities around the financial markets is worthy of emulation.

In addition, these cities and economic zones also happen to be tax havens or low-tax regions making them all the more attractive for global investors and financial institutions to set up and run operations, given the ease of laws applicable.

To replicate at least a part of this success and draw in NRIs, foreign investors and even residents seeking overseas investing options in a more light-touch regulations and moderate tax environment, the Indian government conceived the Gujarat International Finance Tec-City (Gift City) in 2015.

Located between Ahmedabad and Gandhinagar, the Gift City has two broad business regions – a domestic tariff area for business related to India operations and a multi-service special economic zone (SEZ).

This multi-service SEZ spans two main entities – a notified international financial services centre (IFSC) and IT & ITES, support services export.

For our discussion, we will consider the IFSC, which is a hub of fintechs, asset management companies (AIF, PMS), banks, fund houses, stock exchanges, depository participants, settlement firms allowing for a wide swathe of inbound and outbound investments.

As of late 2025, the Gift City had almost $30 billion in assets and commitments from 65 different jurisdictions and $100 billion banking assets.

It is envisaged as a jurisdiction that provides financial services to non-residents and residents in any currency other than the Indian rupee.

All entities in the IFSC are regulated by a unified regulator, the international financial services centres authority (IFSCA). The IFSCA combines the powers of the RBI, SEBI, PFRDA and IRDAI.

For our discussion, we lay emphasis on resident investors looking to invest overseas and NRIs (and PIOs) looking to invest in India, both via the Gift City. Specifically, we look at the onboarding processes, operational aspects, investment options available and taxation.

Options open for resident Indians

For resident Indians seeking overseas equity exposure via Indian mutual fund houses investing in global feeder schemes (the US, Europe etc), there is a key problem of positioning.

Since investments in feeder fund of funds are restricted to $7 billion at an industry level, most of these schemes remain shut for fresh subscriptions or SIPs. This is a limit set by the RBI in 2008 and has not been revised since then.

A person who looks to diversify into overseas investments and make them a meaningfully integral part of his/her portfolio would not be able to allocate suitably if regular inflows are not allowed.

The choice that residential investors have is to use the LRS (liberalised remittance scheme) of the RBI for outbound/overseas investments. Resident Indians are allowed to remit up to $250,000 in a financial year per person for buying shares, properties etc. abroad.

For such investors, the Gift City offers a wide array of choices from stocks, ETFs, domestic fund houses (in Gift City) that invest in US stocks, PMS (portfolio management services) with international investments and so on.

Setting up to invest: Before starting off on investing via the Gift City, you must first complete the KYC (know your customer) process, open a demat account and also start a new bank account to make all the transactions smoothly.

As a resident Indian, you will need your PAN, Aadhaar, passport, proof of address, bank statement etc. as common documentation for onboarding across all entities.

The process is currently a mix of physical and digital, as you have to send a scanned copy of various forms (bank account opening, demat etc.) and self-attested proofs with your signature to entities in the Gift City via e-mail (available in the bank’s website). You will also need to send physical copies in some cases if video KYC is not done.

Your onboarding is usually done within 48 hours in most cases, pending the receipt of physical copies. Some banks and brokers offer video KYC for quick onboarding.

Now, all the main public and private sector banks have a presence in Gift City. So, if you already have an account with the likes of SBI, Punjab National Bank, Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank, you can easily open an account in Gift City as well, by either approaching your branch or e-mailing the respective bank’s Gift City branch.

The bank will open a foreign currency account for you.

Similarly, some of the larger brokers or platforms such as ICICI Direct, HDFC Securities, Anand Rathi, Zerodha, Angel one, Ind Money, Sharekhan etc. have a presence in Gift City via subsidiaries that offer overseas stocks (the US mostly) and derivates as investment options.

So, the onboarding can be smooth if you have an existing relationship with these broking houses.

Once your accounts are established, you can transfer the required amount from your Indian account (rupees) to the Gift City account (where the money gets converted to US dollars), and start transacting. Several options are available.

Buying overseas stocks: India’s leading exchanges BSE and NSE have a significant presence in Gift City via their subsidiaries. India INX (BSE) and NSE IX (NSE) offer a range of stocks, ETFs and derivative products for investors spread across the globe.

You can onboard into these exchanges and transact and do not need additional foreign brokerage accounts, as these exchanges already have tie-ups at the back end.

The India INX offers global equities and ETFs from 135 exchanges worldwide. Additionally, it offers derivatives (commodity, currency, equity and index) trading options. International bonds, green bonds, corporate bonds and sovereign securities are also available.

Access is also available to 40,000 international mutual funds.

The NSE IX mainly allows trading in major US stocks via the unsponsored depository receipts (UDR) route that mimic the underlying shares including fractional US shares. This may be useful, as the absolute share prices in US dollars may be high and a fractional share offers part ownership for a smaller price.

However, NSE IX has recently expanded its offerings with a new platform that will give access to 30 global markets.

A few hundred to a few thousand dollars are enough for buying stocks or ETFs or other products.

In addition to these, you can yourself buy and sell stocks/ETFs/mutual funds via regular Gift City broker accounts.

Funds, PMS, AIF investing overseas: Several Indian mutual fund houses have rolled out schemes in the Gift City.

DSP, PPFAS and Tata already have funds investing overseas via direct stocks or fund of funds (in indices such as Nasdaq 100, S&P 500 etc.). Many others are in the process of offering schemes.

SBI Funds offers PMS (portfolio management services) and investment management for pooled assets.

HDFC offers feeder funds investing in international stocks and bonds.

Whiteoak Capital offers structured offshore exposure. Mirae Asset offers a Category III AIF, while Marcellus offers PMS services.

The discussion is about outbound funds offering investment options outside India.

The likes of DSP and PPFAS have specified a minimum investment of $5,000 and subsequent top-ups of $500 for their funds. Tata has indicated $500 as the minimum investment.

In the case of PMS and AIFs, the minimum investment can be high. It is generally $75,000 for investors, though some AIFs and PMS can ask for a higher threshold, especially in the case of non-accredited investors.

Accredited investors have to satisfy annual income (at least Rs 2 crore) or net worth (at least Rs 7.5 crore with Rs 3.75 crore in financial assets) or a combination of these criteria according to SEBI for investing in AIFs and PMS. The principle is that these must be HNIs capable of understanding the risks involved in getting into complex products. Verification is done by CDSL.

Marcellus Global Compounders Portfolio (a PMS) asks for $150,000 as minimum investment for non-accredited investors and $25,000 for accredited investors.

Mirae Asset Global Allocation fund (a category III AIF) demands $151,000 as minimum investment for non-accredited investors and $10,000 for accredited investors.

Category III AIFs invest in complex and high-risk strategies, use derivatives and the like and can invest in domestic or overseas jurisdictions.

This list is not exhaustive and has many more providers of funds, AIFs and PMS offerings.

ULIPs make an appearance: Dollar-denominated insurance policies are also made available in Gift City. Unit-linked insurance plans from ICICI Prudential, Tata AIA, HDFC Life and Star Union Dai-Ichi Life Insurance and IndiaFirst Life are currently available.

Taxes to consider: In each of the investment stages, there are various levies for resident Indian investors.

First, when you remit more than ₹10 lakh in a year for buying stocks overseas, you will have a tax collection at source (TCS) at the rate of 20 per cent. This TCS amount is not a one-way outflow and can be claimed as credit during filing of your IT returns.

Second, long-term capital gains (LTCG) taxesare different for various cases.

In case you buy (say) US stocks, ETFs or the unsponsored depository receipts and make gains on them with a holding period of more than two years, these are taxed at 12.5 per cent (plus cess and surcharge:14.95 per cent). Any gains made on a holding period of less than two years is taxed at your marginal slab rate.

Both these taxes are to be paid at the time of filing your income tax returns.

Third, dividends suffer a 30 per cent withholding tax by the US authorities. An additional 10 per cent service charge is deducted by the Indian depository entity on the remaining dividend (after the 30 per cent deduction). The UK or West Asian countries have no withholding tax on foreign investors.

All dividends are taxed at your marginal slab rate.

LTCG and STCG taxes are similar for stocks all overseas domiciles, as you pay Indian taxes just like the US example earlier. The withholding taxes on dividends vary according to geographies.

Any withholding and other taxes paid can be claimed as credit, if India has a double taxation avoidance agreement (DTAA) with the country in which you transact.

The US does not tax foreign investors buying stocks from the country’s exchanges sitting in overseas locations.

Fourth, in the case of mutual funds (such as the DSP and PPFAS cases mentioned earlier) and alternative investment funds that have pass through status, trust structures and invest in US-denominated assets, the proceeds for resident Indian investors are tax-free.

However, the catch is that the funds themselves would have paid the taxes. The rates are 12.5 per cent (plus cess and surcharge totalling to 14.95 per cent) for gains on holdings beyond two years. The short-term gains are taxed at a higher 42.74 per cent and dividends are taxed at 35.88 per cent.

The NAV declared is net of taxes for investors. No further taxes are payable by resident Indian investors.

Disclosures to Indian tax authorities: All the incomes and gains made from the Gift City transactions have to be reported in your income tax returns if you are a resident Indian. Schedule FA (foreign assets) must be filled for the purpose. Non-disclosure can invite penalties of up to ₹10 lakh.

Though we have given the broad guidelines on taxation and onboarding processes, it is always better to check with your CA or financial practitioner on all tax aspects as well as operational specifics to get a personalised finer picture.

Where the advantages lie: To be sure, buying and selling stocks, ETFs and overseas funds can be done even outside Gift City using the LRS route and a good broker.

But what the Gift City offers is a one-stop full ecosystem of banks, brokers, fund houses, AIFs, PMS offering choices across global markets, particularly the US.

And it is still expanding with newer players coming in across the system.

From a taxation standpoint, there are some specific advantages in the Gift City. There is no securities transaction tax (STT), no commodities transaction tax (CTT) or any GST on brokerages charged, nor is there any stamp duty on trades.

Besides, by having a foreign currency account in the Gift City, you will have less to worry about rupee movements (especially any depreciation) against the dollar or other currencies since all transactions happen in foreign currency only. You can retain the gains made in foreign currency in Gift City banks or demat accounts itself for the purpose.

A note for investors: The advantages of Gift City investing are more tilted towards NRIs. For resident Indians, who wish to invest abroad – via Gift City or otherwise – the idea must be to cater to specific goals and to diversify.

It is the well-off among resident Indians who would be better placed to make such investments. Ideally, HNIs and UHNIs are more suited for the purpose.

Buying fads or technology names, like AI-led stocks currently, randomly may lead to disappointments later.

If you have the means, but not the expertise, you must seek a registered investment advisor or a mutual fund distributor to guide you through overseas investments.

You can align an investment in US dollar-denominated assets if you wish to fund your child’s overseas education. Or, buying a property abroad some years down the line or plan for a future foreign holiday.

All this should be separate from your own retirement planning exercise.

Sweet deals for NRIs

NRIs (non-resident Indians), persons of Indian origin (PIOs) and foreign nationals can invest in India and elsewhere via the Gift City.

Their onboarding is mostly online. So, for the KYC process, they would need to provide passport, visa and proof of address and identity via e-mail to the required entity – broker, bank etc.

Once these documents are shared, video KYC is conducted where these proofs are verified.

NRIs can transfer funds from their foreign accounts from anywhere in the world and directly invest in Gift City entities (after KYC) or open a new account in the IFSC.

While the NRE account is available for NRIs, and allows full repatriation of to their country of residence, its currency denomination is in Indian rupees.

The Gift City bank account/or foreign country bank account, on the other hand, would be in US dollars or any other overseas currency. So, NRIs can invest straightaway without having to worry about converting to Indian rupees or the currency factor itself.

All of the outbound fund products available for resident Indians are also available for NRIs and others as well.

So, they could invest in AIFs, PMS, mutual funds, derivatives, commodities and other avenues. The minimum ticket sizes for AIFs and PMS in India are ₹1 crore and ₹50 lakh, respectively.

For NRIs interested in futures and options, several choices exist. The average daily turnover volume exceeds $5 billion and the exchanges (India INX and NSE IFSC) are open for 22 hours a day.

Index and future options: Nifty  50, Nifty Bank, Nifty IT, BSE Sensex, BSE India 50, India 50.

Single stock futures and options: India INX offers F&O in 100-plus stocks, while the NSE IFSC offers choices among 200-plus stocks.

Commodities futures: Gold, silver, Brent crude oil, copper etc.

Currencies futures and options: Euro-USD, Pound-USD, Yen-USD, Australian dollar-USD, Swiss Franc-USD, INR-USD.

Debt investment options include, medium-term notes, foreign currency bonds, masala bonds, depository receipts, foreign currency green/sustainable/social bonds etc.

The tax treatment is where the real sweetener is for the NRIs.

As with resident Indians, there is no STT, CTT or GST on transactions or brokerage operations in the Gift City for NRIs, too.

Capital gains (short- or long-term) on stocks or derivative transactions are taxed at a concessional rate of 9 per cent.

Dividends are taxed at a lower rate of 10 per cent.

Some dividends in the form of income payout by AIF (category I and II) may be exempt from dividend taxes, if tax is paid at the fund level. Category II AIFs invest in unlisted equity, private equity, debt, and real estate and even distressed assets.

Income earned from Gift City funds do not suffer TDS in the case of NRIs and OCIs.

NRIs and OCIs can also avail the benefits of adjusting any tax paid with their liability in their home country, if there is a DTAA signed with India.

With no taxes on transactions and lower rates on capital gains as well as dividends, NRIs may find the Gift City a bit more lucrative for trading in stocks, ETFs, derivatives, funds, AIFs and PMS specific to India.

On global outbound opportunities, they would anyway be able to do it with ease from their own countries.

Consulting the tax practitioner in their respective countries (especially in the case of the US, EU and Cannada) for full clarity on DTAA and tax aspects would help make informed calls.

Published on February 28, 2026