Why we do not quote a figure
Costs in GIFT IFSC vary with the activity, the entity form, the scale of the business and the people the framework requires. A lean fund manager, a bank branch and an aircraft lessor have little in common beyond the address. Published averages hide those differences, and they date quickly: IFSCA revised its fee structure in March 2026, the income-tax deduction changed on 1 April 2026, and office rents move with demand.
We therefore build the model with each client from actual quotations and from the official instrument behind each line. Where an official figure exists, such as an IFSCA fee, the model cites the instrument. Where it does not, the model says whose quotation it relies on and on what date.
The method
- Fix the scope. Name the activity and the IFSCA framework, the entity form (company, LLP or branch) and the clients. Each choice changes the cost base. See the questions that determine structure and company, LLP or branch.
- Separate one-off from recurring costs. Set-up costs fall before the first revenue. Recurring costs run for the life of the unit and are the ones that decide whether it pays.
- Model the life of the unit, not one year. The section 147 deduction runs for 20 consecutive tax years chosen out of 25, so the useful horizon is long. Include the years before and after the chosen window.
- Record the source of every number. An instrument and paragraph for regulatory items; a named quotation and date for commercial items; a stated assumption for anything else.
- Run scenarios. At least a base case, a delayed-approval case and an exit case.
- Compare like with like. Set the GIFT case against the alternative the group would otherwise choose, on the same assumptions. See comparing GIFT with other financial centres.
The cost heads
| Head | What to include | Where the number comes from |
|---|---|---|
| Premises | Rent or purchase price, fit-out, maintenance, deposits, stamp duty and registration on the lease | Co-developer quotations; the lease itself; State stamp law. See land, leases and property |
| People | Principal officer, compliance officer and other KMPs based in the IFSC; support staff; relocation; certification courses | Salary quotations; the framework's KMP and certification rules. See substance and fit and proper |
| Capital | Minimum net worth or owned funds under the framework, and the cost of holding it | The activity regulations; see the licence and registration register |
| Regulatory fees | Application, registration, recurring and turnover-based fees; scheme or activity fees; late-reporting charges; the SEZ fee | IFSCA circular IFSCA-DTFA/1/2026. See IFSCA fees |
| Tax | Income tax in and outside the deduction window, minimum alternate tax, withholding, GST on supplies to India | Income-tax Act, 2025 and GST law. See section 147, MAT and AMT, tax after the deduction period and GST and customs |
| Compliance | Audit, AML/CFT systems and screening, regulatory reporting, SEZ reporting, company secretarial work | Quotations; the reporting obligations in the compliance calendar |
| Professional, technology and travel | Legal and tax advice, systems, data, connectivity, travel between GIFT City and the group | Quotations and group policy |
| Time to market | Costs incurred while the application is pending; revenue deferred | The set-up timetable. See below |
Fees are stated in US dollars while most local costs are in rupees, so the model should state the exchange rate assumed and test it.
Time to market as a cost
Delay is often the largest cost a model leaves out. Premises, people and advisers are paid while the application is pending. The main dates come from the official process: IFSCA says it aims to decide applications within 45 days, the lease must be filed on SWIT within 6 months of the SEZ Letter of Approval, and the Letter of Approval sets a period within which operations should start. IFSCA describes its workflow as indicative, so the model should not treat the 45 days as a promise. See the set-up sequence and establishment readiness.
A practical approach is to cost a base timetable and a delayed one, and to show what each month of delay costs in fixed outgoings and deferred revenue.
The savings side, and what is time-limited
Against the costs, include only the reliefs that apply to your activity and your years:
- Income tax. The section 147 deduction applies to eligible income of an eligible unit in the 20 chosen years, subject to minimum alternate tax and to the substance and splitting-up tests. Model the years outside the window too.
- Withholding. TDS relief on specified payments to IFSC units depends on the declaration in Form No. 1(N). See TDS relief.
- Transaction taxes and stamp duty. Relevant mainly to exchange trading. See STT, CTT and stamp duty.
- State incentives. Gujarat's IT/ITeS Policy (2022-27) is in force until 31 March 2027, and eligibility is decided under that policy. See Gujarat incentives and stamp duty.
Several reliefs carry end dates. Put each in the model with its date, and show the business case with and without it.
Common errors
- Treating the deduction as a zero tax rate for the life of the unit, without minimum alternate tax or the years outside the window.
- Costing KMPs as group staff working part-time from elsewhere, when the framework requires them to be based in the IFSC.
- Using an older fee circular. The current one applies from financial year 2026-27.
- Counting a State incentive without checking the policy's operative period and eligibility conditions.
- Leaving out exit costs: surrender, closure of the SEZ unit and final filings. See exit, wind-down and surrender.