Why a method, not a league table
Comparisons between financial centres are often drawn from promotional material, and they rarely compare the same thing. A headline tax rate in one centre may be set against a deduction with conditions in another; a branch against a subsidiary; a fund vehicle against a manager. The answer then depends on the framing, not on the facts.
This page sets out the method we use. It does not score Singapore, Dubai (DIFC or ADGM), Mauritius or any other centre. Each of those should be assessed from its own regulator's and tax authority's published instruments, and by advisers qualified in that jurisdiction. For GIFT IFSC, the guides linked below set out the official position.
Step one: define the structure being compared
- The activity. Fund management, banking, insurance, treasury, leasing or a group service centre. Each centre regulates these differently, and some activities have no equivalent framework elsewhere.
- The entity. Company, partnership or branch, and where its capital sits. See company, LLP or branch.
- The clients and the money. Who the business serves, in what currency, and whether it needs access to Indian clients or assets.
- The horizon. Several GIFT reliefs run for defined periods or carry end dates, so the comparison should cover the same number of years in each centre.
If two options cannot be described in the same terms, they are not comparable, and the evaluation should say so rather than score them.
Step two: the criteria and the questions
| Criterion | Questions to answer for each centre | The GIFT IFSC position |
|---|---|---|
| Regulation | Is there a framework for this exact activity? What capital, people and conduct rules apply? How stable is the rulebook? | Licence and registration register |
| Tax | What is taxed, at what rate, for how long and on what conditions? What minimum taxes and withholding apply? | IFSC tax regime; section 147 |
| Treaties | Which tax treaties does the entity have access to, and what anti-abuse tests apply? | Tax for non-resident investors |
| Substance and talent | Which officers must be resident? Can the right people be hired or relocated, and at what cost? | Substance; talent |
| Cost | What do premises, people, capital, fees and compliance cost, from quotations? | Cost model |
| Time to market | What is the official process and its stated timelines? What usually delays it? | Set-up sequence |
| Access to India | Can the entity serve Indian clients, invest in India or lend to India, and through which routes? | FEMA treatment; lending to India |
| Disputes | Which courts and tribunals decide disputes? Is arbitration supported? | Where disputes are decided |
| Exit | How is the licence surrendered and the entity closed or moved? | Exit |
Step three: score on evidence
- Weight the criteria before scoring, according to what matters to the group. Access to India may outweigh everything for one client and be irrelevant to another.
- Record the evidence for every score: the instrument, its date and the paragraph relied on. A score without a source should not count.
- Use primary sources only: the regulator, the tax authority and the legislation of each centre. Do not rely on rankings, brochures or another adviser's summary.
- Date the comparison. Rules change in every centre, so state the date at which each position was checked.
- Separate law from expectation. Announced or proposed changes should be shown separately from rules in force.
Pitfalls
- Comparing a headline rate in one centre with a conditional deduction in another, without the conditions.
- Ignoring minimum taxes, withholding and indirect tax on supplies to the group's home market.
- Assuming a structure that works in one centre can be copied into another. A framework may not exist, or may impose different presence rules.
- Leaving out the costs of exit and of a later move.
- Treating a ranking or market share figure as evidence on a legal criterion.
Where GIFT IFSC and another centre both remain viable after this exercise, the choice usually turns on access to India and on where the group can place real people. We advise on the Indian side and work with qualified counsel in the other jurisdiction. See global counsel.