🏦 Setting Up a Finance Company in GIFT City IFSC: FAQs You Must Know (2025 Guide)

🌐 Introduction: Why Set Up a Finance Company in GIFT City?

India’s GIFT City IFSC has become a hub for global financial services and cross-border business. One of the most flexible frameworks within it is the Finance Company (FC) / Finance Unit (FU) model governed by the IFSCA (Finance Company) Regulations, 2021.

Whether you're a global treasury, a lender, a lessor, or a group support function, this FAQ blog helps you understand how to register, what activities you can perform, what capital is required, and how to remain compliant.

Depicting GIFT City IFSC as a dynamic financial hub, this abstract representation showcases its role in connecting digital finance units with global banks, underpinned by RBI and IFSCA frameworks

❓ Q1. What is a Finance Company (FC) and Finance Unit (FU)?

• FC: A separately incorporated financial entity in GIFT City IFSC under IFSCA Act Sec 3(1)(c).

• FU: A branch (not a separate company) of a foreign financial institution already regulated in its home jurisdiction.

  
  

⚠️ Both cannot accept public deposits or be a Banking Unit.

✅ Q2. Who can set up an FC/FU?

Entities must meet criteria such as:

• Not be from FATF-blacklisted countries

• Comply with PMLA and IFSCA KYC guidelines

• Be regulated in their home country (for FUs)

• Obtain No-Objection Certificate (NOC) from their home regulator (for core activity FUs)
  

💼 Q3. What activities can an FC/FU undertake?

Core Activities:

• Lending (loans, guarantees, credit enhancement)

• Securitization & leasing

• Trade finance & forfaiting

• Investments in securities & loan portfolios

• Acting as:

  • Global/Regional Treasury

  • Ship or Aircraft Lessor

  • International Trade Financing Services (ITFS) Platform
    

Non-Core (Standalone or Add-on):

• Operating lease (aircraft, ships, equipment)

• Investment advisory

• Portfolio management

• Distribution of financial/insurance products

• Acting as Holding Company (no client interface)
  

👉 Separate licenses may be required for some activities (e.g., leasing, distribution).

🏗️ Q4. What’s the capital requirement for an FC/FU?

Activity Type	Minimum Owned Fund (MOF)
Only Non-Core Activities	USD 0.2 million (or higher if specified)
Core Activities (with/without Non-Core)	USD 3 million (or higher if required)
Global/Regional Corporate Treasury Centre (GRCTC)	USD 0.2 million (or as specified)

💰 Capital must be maintained in freely convertible foreign currency.

🛡️ Q5. What prudential and corporate governance rules apply?

Only applicable for core activity FCs/FUs:

• Capital Adequacy Ratio: Min 8%

• Liquidity Coverage Ratio (LCR): Must be maintained

• Exposure Limits: Max 25% per counterparty/group
  

📌 GRCTCs and entities doing only non-core activities are exempt (with conditions).

📃 Q6. How can a company expand activities under FC Regulations?

To expand scope:

• Amend MoA

• Submit:

  • Application letter

  • Board Resolution

  • Revised business plan (3-year financials)

  • Pay applicable modification fees

  • Apply for LoA amendment with SEZ administrator
    

🔁 Q7. Can multiple activities be carried out under one FC/FU?

Yes, but:

• Separate approvals may be needed

• Must comply with the activity-specific framework

• Example: Aircraft leasing needs separate registration under IFSCA's Leasing Framework
  

📄 Q8. What is the process & timeline for registration?

• Application Form: IFSCA Portal

• Submission: Preferably digital, to applications@ifsca.gov.in

⏳ Processing Timelines:

• Core Activity FCs: 90 days

• Non-Core FCs: 60 days

• Target turnaround: 45 days
  

📌 Provisional Registration may be issued, but business can only start after final CoR.

💸 Q9. What are the fees?

3 categories of fees:

1. Application Fee

2. Registration Fee (post provisional registration)

3. Recurring Annual Fee
   

🪙 Fees can be paid in INR (at RBI reference rate) or USD.👉 Separate fees apply for each core/non-core activity.

[Refer: Fee Circular dated May 17, 2023]

👥 Q10. What’s required in the Information on Management (IOM)?

Required from:

• Directors

• Promoters

• KMPs

• 10% shareholders

• UBOs
  

Each must submit self-attested Annex I form.

🔁 Not required for Finance Units (FUs).

📊 Q11. What should the business plan include?

• Company background

• Description of IFSC activity

• 3-year projections (Balance Sheet, P&L, Cash Flow)

• Source of owned fund

• HR plan
  

🏢 Q12. What group structure info is required?

A clear vertical group chart, showing:

• All entities up to UBO (natural person)

• % shareholding

• Country of incorporation

• Business activity
  

📌 For GRCTCs: Must list which group entities will be served

🔒 Q13. Is CoR subject to renewal?

No annual renewal required. But:

• Must continue meeting “fit & proper” criteria

• Notify IFSCA of any major changes

• Non-compliance may lead to suspension or cancellation
  

✅ Q14. What post-registration compliance is required?

• Adhere to CoR conditions

• Follow FEMA, Companies Act, SEZ laws

• Comply with AML/CFT/KYC Guidelines, 2022

• Submit reports as required by IFSCA
  

🧭 Conclusion: Your Gateway to Global Finance Starts with FC/FU in GIFT City

IFSCA’s Finance Company framework enables agile, multi-functional, and globally competitive finance operations — from treasury centers to leasing arms and fintech platforms.

With clear rules, tiered capital, and structured flexibility, setting up an FC or FU in GIFT IFSC offers unmatched regulatory ease and cross-border access.

📩 Need help with registration, licensing, or strategic structuring? Talk to GIFT CFO — your expert advisory partner in GIFT City IFSC setup, compliance, and scaling.