Setting up an LLP in GIFT City – A Complete Guide

Last Updated on: 30th September 2025, 01:48 pm

Introduction

India is rapidly positioning itself as a global hub for finance and innovation, and at the center of this ambition lies GIFT City (Gujarat International Finance Tec-City) the country’s first International Financial Services Centre (IFSC). Designed as a smart city and a Special Economic Zone (SEZ), GIFT City offers world-class infrastructure, a progressive regulatory regime, and tax benefits that rival global financial hubs like Dubai and Singapore.

One of the most popular business structures in GIFT City is the Limited Liability Partnership (LLP). An LLP in GIFT City combines the benefits of limited liability with the operational flexibility of a partnership, making it ideal for professional services, fund managers, fintech ventures, and international startups looking for a cost-efficient yet globally compliant entity.

Key reasons why entrepreneurs prefer LLP registration in GIFT City:

• Reduced compliance burden compared to private limited companies.
• Flexibility in ownership and management while still enjoying limited liability.
• Ability to conduct business in both INR and foreign currencies.
• Access to the unique tax exemptions and incentives provided by the GIFT IFSC framework.

Why Choose GIFT City for an LLP?

1. Strategic Location & Regulatory Environment

• Situated between Ahmedabad and Gandhinagar, GIFT City enjoys excellent connectivity with major airports, ports, and financial institutions.
• It operates under a Special Economic Zone (SEZ) framework and is governed by the International Financial Services Centres Authority (IFSCA), ensuring a single-window clearance system and simplified compliance processes.

2. International Recognition under IFSCA

• IFSCA is India’s unified regulator for financial services in GIFT IFSC, consolidating powers that in other cities are divided among SEBI, RBI, IRDAI, and PFRDA.
• This one-stop regulatory model gives LLPs a significant advantage in faster approvals, reduced duplication of compliance, and globally recognized governance standards.
• Over 700+ entities (as of 2025) are already operating in GIFT City, spanning banks, insurers, fintech startups, and investment funds demonstrating growing global confidence.

3. Benefits for Startups, Fintech, Fund Managers & IT/ITES

• Startups: Easy incorporation, lower compliance costs, and international branding through an IFSC address.
• Fintechs: Sandbox regime and innovation-friendly policies make GIFT City a preferred testbed.
• Fund Managers: Access to global investors, zero capital gains tax for certain instruments, and tax neutrality for offshore funds.
• IT/ITES & Professional Firms: Attractive cost structure, world-class infrastructure, and exemptions on GST for services rendered to IFSC units.

Data Point: GIFT City vs Other Indian Cities

Factor	GIFT City	Other Indian Cities
Tax Benefits	10-year tax holiday (any 10 years out of 15)	Standard corporate tax
Regulatory	IFSCA – single unified regulator	Multiple regulators (SEBI, RBI, IRDAI, etc.)
Forex Flexibility	INR & Foreign Currency (FCY) accounts permitted	Primarily INR only

LLP in GIFT City – Key Features

Choosing an LLP in GIFT City gives businesses a hybrid structure that blends the flexibility of a partnership with the advantages of a corporate entity. Some of the most notable features include:

1. Separate Legal Entity

• An LLP incorporated in GIFT IFSC is recognized as a distinct legal entity from its partners.
• This means the LLP can own assets, enter into contracts, and sue or be sued in its own name.
• It provides global investors and clients confidence that the entity operates under internationally compliant governance frameworks.

2. Limited Liability of Partners

• The liability of partners is limited to their agreed contribution.
• Personal assets of partners are not at risk, unless fraud or misconduct is proven.
• This feature makes LLP registration in GIFT City attractive for cross-border service providers and fund managers who want to safeguard personal liability.

3. Flexibility in Management & Compliance

• Unlike private limited companies, LLPs do not require a board of directors.
• Internal management is governed by the LLP Agreement, offering freedom to customize rights and responsibilities.
• Compliance requirements are lighter: no mandatory audits unless turnover exceeds ₹40 lakhs or contribution exceeds ₹25 lakhs.
• This makes LLP incorporation in GIFT City ideal for professional services, IT/ITES firms, and small-to-mid-sized investment structures.

4. Allowed Activities in GIFT SEZ/IFSC

LLPs in GIFT City can engage in a broad range of permitted activities, subject to IFSCA and SEZ guidelines:

• Financial Services: Fund management, investment advisory, fintech operations.
• IT & ITES: Software development, BPO, KPO, and consulting services.
• Professional Services: Legal, accounting, compliance, and advisory firms.
• Support Services: Back-office operations for international businesses.

Example: An LLP in GIFT IFSC can act as an investment manager to an Alternative Investment Fund (AIF) registered with IFSCA, benefiting from tax incentives and regulatory exemptions not available outside GIFT City.

Eligibility Criteria for LLP Registration in GIFT City

To set up an LLP in GIFT City, businesses must meet specific criteria defined by the Ministry of Corporate Affairs (MCA), SEZ regulations, and IFSCA guidelines.

1. Minimum Partner Requirement

• At least two partners are required to incorporate an LLP.
• Out of these, one partner must be a resident in India as per the Companies Act, 2013 (staying at least 182 days in the previous year).
• Both Indian and foreign nationals can be partners, provided they meet KYC and compliance norms.

2. Eligible Business Activities

• Only businesses approved under IFSCA and GIFT SEZ rules are allowed.
• Core permitted categories include:
  • Financial services (asset management, insurance intermediaries, fintech).
  • IT/ITES and global outsourcing units.
  • Advisory and consultancy firms.
• Restricted/prohibited activities (like real estate trading or non-permitted manufacturing) are disallowed.

Before initiating LLP incorporation in GIFT City, confirm that the proposed activity falls within the IFSCA’s approved list of activities.

3. Net Worth & Capital Contribution Requirements

• There is no statutory minimum capital requirement to incorporate an LLP in India, including in GIFT City.
• However, sector-specific guidelines may impose financial thresholds:
  • Example: Fund managers registered under IFSCA must meet a prescribed minimum net worth (commonly ₹2 crore or more, depending on fund category).
  • For IT/ITES firms, no net worth requirements exist beyond basic incorporation contribution.

Quick Reference Table – LLP Eligibility in GIFT City

Criteria	Requirement in GIFT City LLP
Minimum Partners	2 (at least 1 Indian resident)
Allowed Activities	As per IFSCA & SEZ approvals
Capital Requirement	Sector-specific
Foreign Participation	Allowed, subject to FEMA & IFSCA

Step-by-Step Process for LLP Incorporation in GIFT City

Setting up an LLP in GIFT City involves a combination of MCA procedures and GIFT SEZ/IFSCA approvals. The process is streamlined but requires careful sequencing to ensure compliance. Below is a clear breakdown of how LLP registration in GIFT City works.

1. Pre-Registration

Before applying for incorporation, certain prerequisites must be met:

• Name Reservation (RUN Service – MCA):
  • Apply for LLP name approval using the MCA’s Reserve Unique Name (RUN) service.
  • The name should end with “LLP” and must be distinct from existing registered names.
  • If the LLP plans IFSC activities, terms like “IFSC” or “GIFT” can be added with prior approval.
• Digital Signature Certificate (DSC):
  • Mandatory for all designated partners to sign e-forms.
  • Issued by a licensed Certifying Authority.
• Director Identification Number (DIN):
  • Partners who wish to act as “Designated Partners” must obtain a DIN through MCA.
  • DIN allotment can be done simultaneously with incorporation via the FiLLiP form.

2. Registration with MCA

Once pre-requisites are ready, proceed to formal LLP incorporation:

• FiLLiP Form Filing:
  • File the Form for Incorporation of LLP (FiLLiP) on the MCA portal.
  • Details required: partner information, registered office address in GIFT SEZ, and business activity code.
  • The Registrar of Companies (RoC) issues the Certificate of Incorporation once approved.
    
• LLP Agreement:
  • Must be filed within 30 days of incorporation using Form 3.
  • Defines the rights, duties, and profit-sharing arrangements of partners.
  • For LLPs in GIFT City, the Agreement should also comply with SEZ and IFSCA regulations.

3. GIFT City / SEZ Approvals

After MCA registration, the entity must seek special approvals for operating inside GIFT IFSC:

• Application to SEZ Development Commissioner:
  • Submit a proposal to establish an LLP unit inside the GIFT SEZ on SWIT portal.
  • Documents: incorporation certificate, LLP Agreement, and proposed business activity plan.
  • Once approved, the LLP receives a Letter of Approval (LoA).
• IFSCA Approval (for Regulated Sectors):
  • If the LLP operates in financial services, fund management, fintech, or insurance, separate approval from the International Financial Services Centres Authority (IFSCA) by making an application on SWIT portal is mandatory.
  • This ensures compliance with global financial service norms.

4. Post-Incorporation Compliance

After approvals, the LLP must complete post-incorporation formalities:

• Statutory Registrations:
  • PAN (Permanent Account Number).
  • TAN (Tax Deduction Account Number).
  • GST (if turnover exceeds the prescribed threshold or for IT/ITES/financial service exports).
• Bank Account Opening in GIFT IFSC:
  • Open business SNRR account for INR transactions and foreign currency (FCY) account with IBUs in GIFT IFSC.
  • This is one of the unique benefits of LLP incorporation in GIFT City, as entities can hold dual-currency accounts.

Tax & Regulatory Benefits of LLP in GIFT City

Setting up an LLP in GIFT City unlocks powerful tax incentives and regulatory advantages that make it one of the most attractive jurisdictions in India for global investors, startups, and professional service firms.

Key Tax Benefits

• 100% Tax Exemption:
  • LLPs in GIFT IFSC enjoy a 100% tax holiday for 10 consecutive years out of 15 years from incorporation (Section 80LA of the Income Tax Act, 1961). However, they are subject to a nominal Alternative Minimum Tax at 9% plus cess and surcharge.
  • Businesses can choose the most profitable 10 years to maximize savings.
• No Transaction Taxes:
  • Securities Transaction Tax (STT), Commodity Transaction Tax (CTT), and Long-Term Capital Gains Tax are not applicable to specified financial instruments traded in GIFT IFSC.
• GST Exemption on Exported Services:
  • Services provided by an LLP in GIFT City to another IFSC unit or to foreign clients are treated as “exports” and are GST-exempt.

Regulatory Benefits

• Unified Oversight by IFSCA: A single regulator for banking, insurance, capital markets, and fintech reduces compliance complexity.
• Ease of Business Approvals: Fast-track clearances via SEZ authorities and IFSCA.
  

Over 700+ entities are operational in GIFT IFSC across banking, fintech, fund management, and IT/ITES sectors demonstrating strong international adoption (Source: IFSCA). For entrepreneurs, these benefits make LLP incorporation in GIFT City a cost-effective and tax-neutral structure for cross-border operations.

Documents Required for LLP Registration in GIFT City

To successfully complete LLP registration in GIFT City, applicants must prepare and submit the following documents:

Partner Documentation

• KYC of Partners:
  • Indian Nationals: PAN, Aadhaar, proof of address.
  • Foreign Nationals/NRIs: Passport, proof of overseas residence.

Office Documentation

• Proof of Registered Office: Lease deed/ownership document for premises in GIFT SEZ.
• No Objection Certificate (NOC): Written approval from GIFT SEZ authority confirming use of office space.
  

Legal & Compliance Documentation

• LLP Agreement: Outlining partner contributions, rights, duties, and management structure (to be filed within 30 days of incorporation).

Quick Checklist for GIFT City LLP Registration

Category	Required Documents
Partner KYC	PAN, Aadhaar, Passport (for foreign partners)
Office Proof	Lease deed/ownership document in GIFT SEZ
Authority Approval	NOC from GIFT SEZ authority
Legal Document	LLP Agreement (filed with MCA)

Cost of LLP Incorporation in GIFT City

The total cost of setting up an LLP in GIFT City varies depending on professional fees, regulatory approvals, and the type of business activity (financial services vs IT/ITES vs advisory). Below is a breakdown of typical expenses:

Key Cost Components

• MCA Filing Fees:
  • ₹500 – ₹5,000 depending on the contribution amount/capital structure.
• Professional Fees:
  • Service providers typically charge for drafting LLP Agreements, filing forms, and compliance management.
• GIFT SEZ/IFSCA Approvals:
  • Sector-specific approvals may cost between USD 5,000 – USD 25,000, depending on the business model (e.g., fund management, fintech, insurance intermediaries).

Comparison: LLP vs Private Limited Company in GIFT City

When deciding between LLP registration in GIFT City and Private Limited Company incorporation in GIFT City, businesses should weigh compliance, flexibility, and scalability.

Parameter	LLP in GIFT City	Private Limited Company in GIFT City
Ownership	Partners (flexible contribution)	Shareholders (equity-based structure)
Compliance	Lower – fewer filings, no audits until turnover > ₹40 lakh or capital > ₹25 lakh	Higher – annual filings, board meetings, mandatory audits
Suitable For	Professional services firms, investment managers, IT/ITES units	Startups, fintechs, MNC subsidiaries, entities seeking external equity funding
Tax Benefits	Same GIFT City tax holiday benefits apply. However, AMT at 9% would apply	Same tax benefits apply
Fundraising	Limited (no equity shares)	Easier access to VC/PE investments

Key Insight: LLPs are best for cost-efficient, professional service and advisory setups, while Private Limited Companies suit scalable startups and fintech firms requiring external capital infusion.

Common Challenges & How to Overcome Them

While GIFT City offers unmatched benefits, businesses often face practical hurdles during LLP incorporation in GIFT City.

1. Delays in SEZ Approvals

• Challenge: Documentation checks and SEZ Development Commissioner approvals may take longer than expected.
• Solution: Ensure all documents (LLP Agreement, lease deed, partner KYC) are complete and pre-vetted before submission.

2. Sector-Specific Licensing under IFSCA

• Challenge: Financial services LLPs (fund managers, fintechs, insurance intermediaries) require additional approvals from IFSCA, which can involve detailed scrutiny.
• Solution: Engage advisors familiar with IFSCA licensing frameworks to prepare a strong application and avoid rejections.

3. Currency Compliance & FEMA Considerations

• Challenge: LLPs in GIFT City often deal with foreign currency accounts and cross-border payments, which require FEMA compliance.
• Solution: Work with banks in GIFT IFSC that specialize in dual-currency accounts and ensure FEMA compliance for inward/outward remittances.

Setting up an LLP in GIFT City is one of the most strategic choices for entrepreneurs, investors, and professional service firms seeking a globally competitive and tax-efficient business structure in India. With benefits like 100% tax exemption for 10 years, simplified compliance, the ability to operate in both INR and foreign currencies, and oversight from a single unified regulator (IFSCA), LLP registration in GIFT City offers unmatched advantages over traditional business setups. Whether you are in fintech, fund management, IT/ITES, or advisory services, LLP incorporation in GIFT City provides the flexibility of a partnership with the credibility of an internationally recognized financial hub making it the ideal gateway for scaling operations in India and beyond.