What is GIFT City?
GIFT City full form is Gujarat International Finance Tec-City. It is India’s first greenfield smart city and its only operational IFSC. For Non-Resident Indians (NRIs), GIFT City represents a unique opportunity to engage with India’s evolving financial market and growing economy while enjoying the benefits of an international-standard business environment. GIFT City aims to position India as a key player in the international financial ecosystem. Strategically designed to support global financial activities, it brings together a future-ready infrastructure, regulatory advantages, and advanced technology to facilitate seamless cross-border transactions.
Built to rival financial centres like Singapore, Dubai, and London, GIFT City enables NRIs to invest, trade, and conduct financial operations on Indian soil without the complexities typically associated with cross-border transactions. The city is designed to attract foreign investments, support global financial activities, and provide a regulated, technologically advanced ecosystem tailored to international investors, including NRIs.
Top Reasons Why NRIs Should Consider GIFT City Investment Options
NRIs looking to diversify their investment portfolio can find various opportunities in GIFT City. The city offers the following globally competitive financial products and services tailored for international investors:
- Access to Global Financial Markets: NRIs can invest in Indian and international equities, ETFs, debt instruments, and global indices through GIFT IFSC exchanges.
- Alternative Investment Funds (AIFs) and Mutual Funds: Over 140 AIFs and multiple mutual funds operate within GIFT City, offering exposure to private equity, real estate, infrastructure, and structured debt.
- Direct USD Investments: NRIs can invest directly in US dollars, euros, or pounds through GIFT IFSC banks, avoiding currency conversion hassles and Indian PAN requirements.
- Seamless Repatriation: Funds and profits from investments in GIFT IFSC can be repatriated freely in foreign currency, eliminating traditional foreign exchange barriers.
- Extended Trading Hours: GIFT IFSC stock exchanges operate 22 hours daily, allowing NRIs across different time zones to trade efficiently and access global financial markets around the clock.
- Unified Regulatory Authority: The International Financial Services Centres Authority (IFSCA) acts as a single regulator, simplifying compliance and reducing bureaucratic challenges for international investors.
- Tax and Regulatory Benefits: NRIs benefit from a 10-year tax holiday on business income, exemptions on capital gains, no Securities Transaction Tax (STT) or Commodities Transaction Tax (CTT), and zero GST on offshore services.
- Access to Innovative Banking Solutions: NRIs can maintain foreign currency accounts (USD, EUR, GBP, etc.). They can also use faster international remittances and leverage digital banking services for seamless cross-border transactions.
Popular Insurance Products for NRIs in GIFT City
The following are some commonly available insurance products available in the GIFT City through multiple stakeholders:
- USD/Foreign Currency ULIPs (Unit Linked Insurance Plans): Life insurance combined with investment opportunities in global or international equity/debt funds, denominated in USD or other foreign currencies. Offers market-linked growth potential and tax efficiency.
- USD/Foreign Currency Term Insurance (Pure Protection Plans): Pure life cover offering death benefit payouts in USD or other foreign currencies. Ideal for NRIs seeking global protection without investment components.
- Endowment / Savings + Insurance Plans (Foreign Currency): Combines insurance coverage with guaranteed or participating returns. May be denominated in USD or other currencies, offering capital protection and tax benefits.
- Health / International Private Medical Insurance (IPMI): Tailored for NRIs and expatriates seeking global medical coverage. Underwritten by IFSC-registered insurers, providing international hospitalisation and treatment benefits.
- Reinsurance / Captive Insurance Solutions: Facilitates NRIs or Indian-owned global businesses to establish captive insurance entities or access international reinsurance services via IFSC. Helps manage global risk exposure efficiently.
- Riders / Add-ons / Supplementary Covers: Optional benefits enhancing base policies, including critical illness, accidental death, and disability protection. Generally available as part of ULIPs or term insurance plans.
Insurance Companies Providing Services in GIFT City
The following are leading Indian and international insurers offering foreign currency-denominated insurance products tailored for NRIs and global investors:
- Canara HSBC Life Insurance Company Limited
- HDFC International Life and Re Co. Ltd.
- ICICI Lombard General Insurance Co. Ltd.
- ICICI Prudential Life Insurance Company Limited
- Star Union Dai-ichi Life Insurance Company Limited
- TATA AIA Life Insurance Co. Ltd.
- IndiaFirst Life Insurance Co. Ltd.
- Life Insurance Corporation of India
Plans Provided in GIFT City by Different Insurers
The following are some of the innovative USD-denominated insurance plans available in GIFT City that you can buy from Policybazaar. These plans are specifically designed for NRIs seeking global investment exposure and life protection.
TATA AIA Global Invest
A USD-denominated ULIP offering global investment exposure and life insurance for NRIs:
- Currency Denomination: USD-denominated ULIP offering global investment and life insurance coverage.
- Target Audience: Designed for residents, NRIs, OCIs, and PIOs seeking diversification.
- Purpose: Ideal for overseas education and long-term international financial goals.
- Withdrawal Option: Allows partial withdrawals after three years of premium payment.
- Digital Management: Fully digital policy managed online, regulated under IFSCA guidelines.
SUD Life International Wealth Creator
A ULIP providing life cover with global investment opportunities in USD:
- Life Cover: ULIP provides life cover with USD-based global investment opportunities.
- Returns: Enables returns in US dollars through five international fund options.
- Flexibility: Offers fund switching, premium top-ups, and partial withdrawal flexibility.
- Premium Terms: Allows modifying premium terms and tenure based on life stages.
- Global Exposure: Suitable for NRIs seeking global exposure and structured wealth creation.
IndiaFirst Wealth Wise Plan
A whole life ULIP denominated in USD, combining global investment with lifelong insurance:
- Currency Denomination: Whole life ULIP denominated in USD for global investors.
- Fund Options: Provides six international fund options under one insurance policy.
- Growth Potential: Ensures diversified long-term growth with lifelong insurance protection.
- Market Access: Combines global market opportunities with India’s strong economic performance.
- Investor Benefit: Ideal for NRIs aiming for stability, protection, and steady growth.
HDFC Life Global Wealth Advantage Flexi
A unit-linked plan designed for long-term global wealth creation and capital appreciation:
- Plan Focus: Unit-linked plan focused on long-term global wealth creation goals.
- Portfolio Management: Features diversified portfolio management with active fund allocation strategies.
- Performance: Aims to deliver consistent performance with balanced risk-adjusted returns.
- Investment Approach: Follows a disciplined investment approach, ensuring steady portfolio performance.
- Investor Suitability: Best suited for investors prioritising capital appreciation and financial stability.
Benefits of Buying Insurance via GIFT City for NRIs
Investing in insurance products through GIFT City offers NRIs globally aligned advantages, combining financial protection, flexibility, and international investment exposure.
- Invest and Receive Benefits in USD: Pay premiums and receive payouts in US Dollars, avoiding INR conversion issues.
- Access Global Investment Funds: Invest in international ETFs and global funds, expanding wealth creation opportunities.
- Cover Continuance Option: Life insurance cover continues uninterrupted, even during financial hardships or absence abroad.
- Financial Protection for Nominees: Provides lump sum payouts to your family in case of unfortunate events.
- Flexible Withdrawals for Liquidity: Partial withdrawals are allowed after three years to meet urgent financial needs.
- Multiple Premium Payment Options: Flexible payment modes with optional add-ons tailored to your financial goals.
- International Insurance Offerings: Access dollar-denominated term life, health, and annuity plans for global Indians.
- Reinsurance Opportunities: GIFT IFSC is a growing global reinsurance hub, ideal for NRI professionals.
- Captive Insurance Solutions: NRIs running international businesses can set up captive entities to control risk efficiently.
Step-by-Step Investment Process for NRIs
Investing in GIFT City is straightforward for NRIs when you follow the proper procedures and comply with regulatory requirements. Here’s a step-by-step guide to help you get started:
- Step 1: Open a Foreign Currency Account: Approach an IFSC unit of a bank to open a foreign currency account (USD, EUR, GBP, etc.) to manage deposits and transactions efficiently.
- Step 2: Register with an IFSC Broker: Onboard with brokers licensed by IFSCA to trade on India INX or NSE IFSC. This is essential for accessing equities, ETFs, and other securities.
- Step 3: Select Investment Products: Choose from various options, including ETFs, US stocks, mutual funds, and Alternative Investment Funds (AIFs) registered in GIFT IFSC.
- Step 4: Consult a Tax Advisor: Even with GIFT IFSC’s tax benefits, evaluate your personal tax situation, especially if you reside in countries with global taxation rules (e.g., USA).
- Step 5: Understand Repatriation and Currency Rules: Ensure clarity on fund repatriation, currency conversion (if applicable), and transfer regulations for smooth international financial operations.
- Step 6: Start Investing and Monitor PortfolioOnce onboarded, invest in your chosen instruments and track portfolio performance regularly to optimise returns while complying with regulations.
Taxation on Investments in GIFT City for NRIs
Gift City investment has several tax benefits that attract NRIs and global investors. These Gift city tax benefits make it easier to maximise returns while complying with Indian tax regulations:
- No Capital Gains Tax: NRIs investing or trading in GIFT IFSC exchanges are eligible for capital gains tax exemptions. GIFT IFSC offers a preferential tax regime and certain capital gains on IFSC exchanges enjoy exemptions or concessional rates.
- Dividend Income: Concessional tax rate of 10% on dividends received from IFSC units.
- Interest Income: Concessional tax rate on interest income for NRIs for specific long-term or rupee-denominated bonds.
- Tax Holiday for Companies: A 100% tax holiday for any 10 years out of 15 for companies operating within GIFT City.
- No Securities Transaction Tax (STT): Unlike domestic Indian markets, NRIs do not pay STT on trades in GIFT IFSC.
- No Commodities Transaction Tax (CTT): Commodity trading in GIFT IFSC is exempt from CTT, reducing trading costs.
- No GST on Offshore Services: Financial services provided to non-residents are exempt from GST, lowering the cost of managing international portfolios.
Key Takeaways
GIFT City is a testament to India's vision of becoming a global financial powerhouse. For NRIs, it offers a unique blend of tax advantages, regulatory ease, and access to international financial markets. Whether you're looking to diversify your investment portfolio, establish a business, or secure your financial future through insurance, GIFT City provides a conducive environment to achieve your financial goals. Embrace GIFT City's opportunities and embark on a journey towards global financial success.
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