Setting Up in GIFT IFSC: The Letter of Approval, IFSCA Registration and the SWIT Process

Setting up in GIFT IFSC requires two distinct approvals: a Letter of Approval to operate as a unit in a Special Economic Zone (SEZ) and the applicable licence, registration, recognition or authorisation from the International Financial Services Centres Authority (IFSCA) for the proposed financial activity. These approvals are governed by two separate laws: the Special Economic Zones Act, 2005 and the International Financial Services Centres Authority Act, 2019. Since 2024, a common administrative process has streamlined the route for obtaining both approvals.

This guide to setting up in GIFT IFSC explains the legal framework behind this process and outlines the approval steps published by IFSCA, including the joint application, post-approval formalities, regulatory fees and ongoing compliance requirements. Specific eligibility conditions for fund managers, banks, insurers and financial intermediaries depend on the applicable IFSCA regulations and are covered separately.

The Legal Basis: The 2024 Section 31 Notification

Section 31 of the IFSCA Act allows the Central Government to apply other Central Acts to IFSC financial products, services and institutions with modifications. By a notification dated 28 February 2024, the Ministry of Finance used this power to modify the SEZ Act and the SEZ Rules, 2006 for units requiring recognition, registration, licence or authorisation by IFSCA.

The effect of the modifications is as follows.

• Section 12 of the SEZ Act: the powers and functions of the Development Commissioner (other than those under section 12(3)) are to be discharged by an officer nominated by IFSCA, designated the “Administrator (IFSCA)”.
• Section 13: for such units, the Administrator (IFSCA) chairs the Approval Committee.
• Section 15: a person proposing to set up such a unit submits its proposal to the Administrator (IFSCA). The proposal also goes to the Approval Committee, and the Administrator (IFSCA) may grant the Letter of Approval once the proposal is approved. The Administrator must share information on these units with the SEZ Development Commissioner.
• Rule 17 of the SEZ Rules: applications for such units are made to the Administrator (IFSCA) in a new consolidated Form FA, instead of Form F. The form as notified calls for a payment of ₹5,000 with the application, along with a project report.

Form FA asks for the applicant’s constitution, the area of business proposed under IFSCA regulations, directors or partners, investment in office equipment, office-space requirement, employment and shareholding. It also asks whether the applicant or its directors or partners have been proceeded against or debarred under the Foreign Trade (Development and Regulation) Act, 1992, FEMA, the Customs Act, 1962 or the Central Excise Act, 1944. An affidavit in support is required.

The result is a single administrative gateway. It is not a merger of the two legal approvals. The Letter of Approval remains an SEZ Act instrument; the Certificate of Registration remains an IFSCA instrument under the relevant regulations.

The GIFT IFSC Approval Process: Step-by-Step

IFSCA has published an indicative workflow for setting up a unit in GIFT City through its Single Window IT System (SWIT). Version 1.0 was uploaded in July 2026. The Authority clarifies that the workflow remains subject to applicable regulations. The following steps are based on that document.

Stage 1: Pre-application

1. Office space and corporate vehicle (in parallel). Identify office space with a co-developer and execute a letter of intent. Reserve a name with the Ministry of Corporate Affairs if a company or LLP is to be incorporated. Name reservation does not apply where the entity is a branch of an existing company or LLP.
2. Provisional allotment. Obtain a Provisional Letter of Allotment and no-objection certificate from the co-developer.
3. Incorporation. Incorporate the company or LLP and obtain PAN and TAN. This step, too, does not apply to branches.

Stage 2: The joint application and approvals

4. SWIT application. File a joint application on the SWIT portal. It is addressed both to the Administrator (IFSCA), for SEZ approval, and to IFSCA, for regulatory approval.
5. SEZ scrutiny. Rectify any deficiencies in the SEZ application on the SEZ Online portal. Appear before the Unit Approval Committee, online or in person, once the application is placed on its agenda.
6. Two parallel outcomes. The Administrator (IFSCA) issues the Letter of Approval through SEZ Online. Separately, IFSCA’s regulatory department grants in-principle approval through SWIT, where the relevant regulation provides for one. The applicant submits the Letter of Approval to IFSCA.

Stage 3: Post-approval formalities (largely in parallel)

7. The workflow lists five parallel steps: – submit a bond-cum-legal undertaking in Form H of the SEZ Rules to the Administrator (IFSCA), which issues the approved undertaking and an eligibility certificate; – obtain Importer-Exporter Code registration; – obtain registration-cum-membership certification (RCMC) registration; – open a foreign currency account with an IFSC Banking Unit and a special non-resident rupee (SNRR) account with a domestic bank branch, and complete overseas direct investment capital infusion where needed after IFSCA’s in-principle approval; – apply for GST registration through SWIT.
8. Lease. Enter into a lease agreement with the co-developer. File a copy with IFSCA through SWIT within six months of the Letter of Approval.
9. Final regulatory approval. Obtain the Certificate of Registration (or equivalent) from IFSCA through SWIT.

Stage 4: Operational commencement

10. Register under Gujarat’s shops and establishments law and for professional tax, for both employer and employees.
11. Obtain SEZ employee identity cards.
12. Issue the first invoice or execute the first transaction. Then submit a request for recording the date of commencement of production (DCP) on the SEZ portal.
13. Intimate IFSCA’s regulatory team of the start of operations, where applicable.

Fees Payable to IFSCA

Regulatory fees are governed by IFSCA Circular IFSCA-DTFA/1/2026 dated 2 March 2026, which sets the fee structure for FY 2026-27. The circular establishes eight categories of charge:

The circular also covers fees under IFSCA’s Informal Guidance Scheme, 2024. If the licence or registration fee is not paid within the specified time, IFSCA may treat the applicant as not wishing to proceed and close the application, and a fresh application is then required. The specific amounts vary by activity and are set out in Schedule I to the circular.

Points that Commonly Cause Delay or Legal Difficulty

• Treating the Letter of Approval as permission to operate. For a regulated activity, the Letter of Approval is not the regulatory licence. Commencing the activity before the IFSCA registration is granted risks breaching the relevant regulations.
• Sequencing capital infusion. The workflow places overseas direct investment capital infusion after IFSCA’s in-principle approval, “when required”. An Indian parent’s investment is also governed by the overseas investment framework (see Article 13), which has its own reporting obligations.
• Branch versus subsidiary. Several steps, including name reservation and incorporation, apply only to new companies and LLPs. A branch raises different questions of corporate law and regulatory eligibility, which the activity-specific regulations answer.
• Lease filing deadline. The six-month window for filing the lease with IFSCA is easy to overlook. It runs from the Letter of Approval, not from the regulatory registration.
• Disclosure in Form FA. The form requires disclosure of past proceedings or debarment under specified trade, customs and foreign exchange statutes. It is supported by an affidavit, and the undertaking accepts that approvals obtained on incorrect statements are liable to cancellation.

Status As of 17 September 2026

The section 31 notification of 28 February 2024 and the fee circular for FY 2026-27 are in force. The SWIT workflow is administrative guidance that describes practice; the binding requirements remain those in the SEZ Act and SEZ Rules as modified, and in IFSCA’s regulations and circulars.

Keeping the Approvals Alive

Setting up is not the end of the approval sequence. By circular dated 10 August 2026, IFSCA directed all regulated entities to hold a valid and subsisting Letter of Approval under the SEZ Act, together with the applicable IFSCA registration, licence or other regulatory instrument, at all times. The circular records that a Letter of Approval is valid for one year where business has not commenced and five years after commencement, with renewal to be sought at least two months before expiry. Conducting business without these documents exposes the entity to action under both the IFSCA Act and the SEZ Act, including penalties, suspension or cancellation. Diarise the renewal date.

FAQ

1. What approvals are required to set up in GIFT IFSC?

A Letter of Approval under the SEZ Act and the applicable IFSCA licence or registration are generally required.

2. What is the role of the 2024 Section 31 notification?

It modifies the SEZ Act and Rules to route specified IFSC unit approvals through the Administrator (IFSCA).

3. How do you apply for GIFT IFSC approvals?

Applicants submit a joint application through the Single Window IT System (SWIT) for SEZ and regulatory approvals.

4. Does the Letter of Approval permit regulated financial activities?

No. The applicable IFSCA licence, registration or authorisation must also be obtained before commencing the regulated activity.

5. What fees apply to IFSCA registration?

Fees vary by activity and may include application, registration, recurring, processing and late-payment charges.

6. How long is the SEZ Letter of Approval valid?

As stated in IFSCA’s August 2026 directions, validity is generally one year if business has not commenced and five years after commencement, subject to applicable renewal requirements.