What is a Portfolio Management Service (PMS)?
A Portfolio Management Service (PMS) is a professional investment management offering where an experienced fund manager, on behalf of a client, manages a portfolio of investments (typically stocks, bonds, or other securities). Unlike mutual funds, a PMS often offers personalized, goal-oriented strategies and a greater degree of portfolio customization tailored to an individual client’s financial needs and risk appetite.
By setting up your PMS in GIFT City—India’s first International Financial Services Centre (IFSC)—you gain access to a unique regulatory sandbox, tax incentives, and the ability to transact in foreign currencies, attracting sophisticated global investors. Your PMS will operate as a Fund Management Entity (FME) regulated by the IFSCA.
How to Setup PMS in GIFT City – Detailed Steps
Step 1: Establish Your Legal Presence in GIFT IFSC
The first critical step is establishing a legal entity within the GIFT City IFSC. This entity will be your officially registered Fund Management Entity (FME).
Your legal structure can take one of the following forms:
- New Incorporation: A new company or Limited Liability Partnership (LLP) specifically incorporated within the IFSC.
- Branch Office: A branch of an existing Indian or foreign body corporate.
- Subsidiary: A wholly or partly-owned subsidiary of an Indian or foreign company.
This entity acts as a “deemed foreign territory” for financial transactions, simplifying compliance for international investors.
Step 2: Fulfill Core Capital and Professional Requirements
The IFSCA has clear eligibility criteria to ensure financial stability and professional competence. Your FME must strictly adhere to these requirements:
| Requirement | Details |
| Minimum Net Worth | Maintain a minimum net worth of USD 500,000 at all times. |
| Physical Presence | You must secure and maintain a physical office within the GIFT IFSC. |
| Principal Officer | Must have a minimum of five years of relevant experience in the securities market and meet the IFSCA’s “fit and proper” criteria. |
| Compliance & Risk Manager | Must have at least three years of relevant experience in the compliance and risk domain. |
Step 3: Complete the IFSCA Registration Process
Once your legal entity and key personnel are in place, you proceed to the formal registration with the IFSCA.
- Submit Application: Download and complete the official FME application form. This, along with all supporting documents, must be submitted via email to the IFSCA at
applications@ifsca.gov.in. - Provide Documentation: The application package is extensive and must include:
- Corporate Documents: Certificate of Incorporation, Memorandum and Articles of Association.
- Financials: Net worth certificate and Audited Financial Statements for the last three years.
- Business Plan: A detailed operational and business strategy for the GIFT IFSC.
- Due Diligence: KYC documents for all promoters, directors, and Key Managerial Personnel (KMPs).
- Structure: Details of the complete shareholding structure.
- Fee Proof: Proof of payment for the application fee.
- Pay Prescribed Fees: You must submit the required non-refundable application, registration, and annual fees:
- Application Fee: USD 2,500 (One-time).
- Registration Fee: USD 7,500 (Non-retail FME) to USD 10,000 (Retail FME).
- Annual Fee: USD 5,000 (Recurring).
Step 4: Finalize Client and Operational Setup
Upon receiving final registration approval from the IFSCA, you must set up the necessary operational framework for client transactions.
- Minimum Client Investment: For each client, you must accept a minimum investment of USD 75,000.
- Segregated Accounts: Set up a separate foreign currency bank account for each client at an IFSC Banking Unit (IBU), along with a separate demat account. This ensures clear segregation of client funds.
- Client Agreements: Draft a comprehensive written agreement with each client covering investment objectives, fee structure, risk factors, and contract duration.
- Appoint a Custodian: Engage an independent, qualified custodian to hold investor assets. This is mandatory to ensure transparency and prevent any conflict of interest.
Key Benefits of Establishing a PMS in GIFT City
Setting up your GIFT City PMS offers significant competitive advantages over traditional structures, making it highly attractive to global investors:
- Unmatched Tax Exemptions: Enjoy a 100% tax exemption on business profits for 10 years and complete exemption from GST, STT, and CTT.
- Full Foreign Currency Freedom: Conduct all financial services in specified foreign currencies, simplifying international operations.
- Simplified, Unified Regulation: Benefit from a single regulatory body, the IFSCA, providing a streamlined, globally competitive environment.
- Direct Access to Global Markets: Invest directly in a wide range of global securities, offering greater diversification for clients.
Conclusion: Capitalize on the Global Opportunity
Establishing a Portfolio Management Service (PMS) in GIFT City IFSC is more than just setting up an office; it’s securing a passport to global finance. The IFSCA’s simplified compliance, coupled with powerful tax benefits and access to foreign capital, makes the GIFT IFSC the premier destination for fund managers looking to scale internationally.
By meticulously following the steps for FME registration—from securing your legal presence and meeting the minimum net worth of USD 500,000, to finalizing client accounts with a minimum investment of USD 75,000—you position your firm at the forefront of India’s financial globalization.
Ready to launch your PMS in GIFT City? Contact our expert advisory team today to navigate the IFSCA registration process and accelerate your journey toward managing global assets.