How to use this register
The register lists risks neutrally. It does not rank them, because the ranking depends on the activity, the group and the clients. For each risk it gives what the risk looks like in practice, the usual mitigation and the guide on this site that deals with it.
A board paper can adopt the same structure: give each risk an owner, a likelihood and impact on the group's own scale, a mitigation and a review date. Revisit it when a framework changes, at each annual budget and before any change in activity.
Regulatory, substance and tax
| Risk | What it looks like | Mitigation |
|---|---|---|
| Regulatory change | IFSCA frameworks are new and are amended several times a year. Fees, certification deadlines, presence rules and permitted activities can change after the business case is approved. | Track IFSCA circulars; build review points into the plan; test uncertain points through informal guidance. See the compliance calendar and enforcement. |
| Substance | Officers based in GIFT City in name only; decisions taken elsewhere and ratified later. This fails IFSCA's presence requirements and weakens the tax position. | Real premises, KMPs based in the IFSC, decisions documented there. See office space, physical presence and substance. |
| Tax eligibility | Challenge to whether income is eligible for the section 147 deduction; the splitting-up test for units commencing on or after 1 April 2026; transfer pricing on group transactions; minimum alternate tax. | Document eligibility from the start; price group transactions at arm's length. See section 147, transfer pricing and MAT and AMT. |
| Time-limited reliefs | Some reliefs have end dates: the tax-neutral relocation of offshore funds applies to relocations completed on or before 31 March 2030, and Gujarat's IT/ITeS Policy (2022-27) runs to 31 March 2027. | Show the business case with and without each relief. See fund relocation and Gujarat incentives. |
People, cross-border and market
| Risk | What it looks like | Mitigation |
|---|---|---|
| Talent | Difficulty finding experienced KMPs willing to be based in GIFT City; certification requirements; a KMP vacancy that leaves no principal or compliance officer on site. | Recruit early; plan succession; track certification deadlines. See fit and proper, KMP certification and talent. |
| Sanctions exposure | Counterparties, owners or payment chains connected to sanctioned persons. Indian law applies in all cases, and US, EU and UK regimes reach many IFSC transactions through currency, banks and counterparties. | Map the transaction and screen against each regime that applies. See sanctions and AML and AML, CFT and KYC. |
| Rupee interface | The IFSC transacts in specified foreign currency. A rupee leg is lawful only where a specific permission covers it, and rupee income falls outside the section 147 deduction. | List every rupee touchpoint and the permission for each. See where rupees can and cannot be used and how FEMA treats IFSC units. |
| Market depth | Liquidity, counterparties and service providers are thinner in some products than in older centres. | Test the market for the specific product before committing; plan for service providers outside GIFT where the framework allows. |
Reputation and exit
| Risk | What it looks like | Mitigation |
|---|---|---|
| Reputation | A perception that GIFT City is a tax shelter, which it is not designed to be. A structure with little substance invites that criticism and the tax challenge that goes with it. | A real operating business, documented commercial reasons and conservative tax positions. |
| Exit | A registration that stays in force until surrendered; SEZ obligations, duties on goods brought in free of duty, and the bond-cum-legal undertaking to discharge; final tax filings. | Plan the exit at entry, including client documents and asset records. See exit, wind-down and surrender and SEZ compliance. |
Turning the register into a decision
Most of these risks are managed by the same few decisions: choosing the right framework, putting real people and decision-making in GIFT City, keeping rupee and group flows within the permissions, and planning the exit. A register that shows an owner and a mitigation against each line usually tells the board more than a score.
Where a risk turns on an unsettled point of law, record it as such, with the question, the current view and what would change it. Then put the business case and the risk register side by side. See the cost model and establishment readiness.