Key Points
New Delhi : Some of Indias leading family offices are exploring the option of setting up shop at the International Financial Services Centre (IFSC) or Gift City as the Reserve Bank of India (RBI) tightens scrutiny of overseas direct investments (ODI)..
Freedom to invest across asset classes, including overseas real estate, along with low compliance costs and numerous tax benefits, are prompting family offices to look towards Gift City, market participants said..
Family offices, however, are not considered to be engaged in financial services activity as per the rules and hence need a three-year profit record. . Overseas Investment Rules, 2022 also make a carve-out for IFSC; hence, the three-year profitability condition does not apply..
In this context, the Indian family office regime has sought to offer comparable benefits to families looking to set up family offices in Gift City in terms of regulatory and investment flexibility, taxes and cost of set-up and administration..
As of now, setting up of family offices in Gift City is likely to prove more cost efficient for HNIs, as the administration cost, cost of setting up, cost of operations, etc. are likely to be much lower in comparison to comparable foreign jurisdictions," Savani of Cyril Amarchand Mangaldas said..
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