family office is usually a service arrangement. A Family Investment Fund (FIF) in GIFT City IFSC is something more specific: a regulated fund vehicle that may pool money only from a single family, managed by a fund management entity registered for that purpose. The regulatory design accepts that a family’s own capital does not need the protections built for third-party investors, and adjusts the requirements accordingly, while keeping the structural discipline of a registered fund.

The Two Defining Concepts

“Family investment fund” is defined in regulation 2(1)(l) of the IFSCA (Fund Management) Regulations, 2025 as a fund pooling money only from a single family under one or more investment vehicles, set up in terms of the regulations.

“Single family” is defined broadly in regulation 2(1)(ii). It includes a group of individuals who are lineal descendants of a common ancestor, together with their spouses, including widows and widowers whether remarried or not, and their children, including stepchildren, adopted children and ex-nuptial children. It also includes entities, such as a sole proprietorship, partnership firm, company, LLP, trust or body corporate, in which an individual or a group of individuals of a single family exercises control and directly or indirectly holds substantial economic interest.

The definition therefore accommodates the way families actually hold wealth: through operating companies, holding vehicles and trusts, not only in individual names. Two tests must be satisfied for an entity to count: control by the family, and substantial economic interest held directly or indirectly.

The Manager: An Authorised FME

Under regulation 3(4), an FME set up by a Single Family to manage its Family Investment Fund registers in the Authorised FME category. That is the lightest of the three categories (Article 18), and it reflects the absence of third-party investors.

Two ordinary FME requirements are switched off for an FIF by regulation 104(2): the legal form requirements in regulation 5 and the net worth requirements in regulation 8 do not apply to a Family Investment Fund.

Legal Form of the Fund

An Family Investment Fund may be set up in the GIFT City IFSC as a company, a contributory trust, an LLP, or another form IFSCA permits. Where a trust is used, the regulations impose conditions designed to ensure determinacy:

• the beneficiaries must be identifiable from the trust deed, although they need not be named;
• each beneficiary’s share must be capable of being determined from the deed and must not be at the trustee’s discretion; and
• further contributors must not render existing beneficiaries unknown or their shares indeterminate.

These conditions track the concerns that arise under Indian trust and tax law where beneficiaries or their shares are indeterminate. A discretionary trust structure will not satisfy them.

The Economic Threshold

An FIF must have and maintain a minimum investment of USD 10 million within three years from the date of its certificate of registration. Where the family sets up additional investment vehicles, after filing documents with IFSCA and paying the applicable fee, those vehicles are considered in conjunction for the purpose of meeting this threshold.

The structure is therefore scalable. A family may operate several vehicles for different asset classes or branches of the family while satisfying a single aggregate threshold.

Open or Close-Ended, and What it May Invest in?

The FIF may be open-ended or close-ended, “depending upon the requirements of the family”. Its permissible activities are all activities related to managing the family investment fund, and such other activities as IFSCA specifies.

Permissible investments, in the IFSC, India or foreign jurisdictions, and in the manner and to the extent IFSCA specifies, cover:

• unlisted securities;
• securities listed, to be listed or traded on stock exchanges;
• money market instruments;
• debt securities;
• securitised debt instruments, asset-backed or mortgage-backed;
• units of investment schemes;
• derivatives, including commodity derivatives;
• limited liability partnerships;
• physical assets such as real estate, bullion and art; and
• other specified securities, financial products, assets or instruments.

Borrowing and leverage are permitted “as per their risk management policy”, without the express investor-consent mechanics that apply to restricted and venture capital schemes. That is a meaningful difference: the discipline is internal governance rather than external investor approval.

Characterisation for Tax and Exchange Control

An explanation to regulation 104 states that the FIF or its investment vehicle may be construed as a Category I, Category II or Category III Alternative Investment Fund depending on the investment strategy adopted in accordance with regulation 30. An amendment effective 10 September 2026 added that it “shall accordingly be taken on record by the Authority”.

The addition matters. Category characterisation drives treatment under the Income-tax Act and under exchange-control instruments that refer to AIF categories. Making the characterisation a matter of record with IFSCA reduces the scope for later disagreement about what the vehicle is. Whether a particular FIF qualifies as a “specified fund” for the purposes of Schedule VI of the Income-tax Act, 2025 remains a separate question, answered by that Schedule’s own conditions, including its unit-holding requirements (Article 7).

Family Office Services for Other Families

The FIF regime is confined to a single family. Where a manager wishes to serve several families, the route is different: regulation 81 permits an FME to provide services to a multi-family office under a portfolio management agreement, subject to conditions IFSCA may specify. That is a portfolio management activity available to a Registered FME (Non-Retail), not a Family Investment Fund.

Practical Points for Families Considering the Structure

• Map the family tree against the definition before assuming that all intended contributors qualify. Entities qualify only where the family has both control and substantial economic interest.
• Test the trust deed against the determinacy conditions at drafting stage if a contributory trust is used.
• Plan for the USD 10 million threshold across all vehicles, and diarise the three-year deadline from registration.
• Adopt a real risk-management policy, since it is the operative constraint on borrowing and leverage.
• Settle the AIF characterisation early, and keep it consistent with the strategy actually pursued, since IFSCA now takes it on record.
• Do not conflate the fund with the manager. The FIF is managed by an Authorised FME; the relaxations in regulation 104(2) apply to the fund, and the FME’s own obligations under the regulations continue.

Frequently Asked Questions

1. What is a Family Investment Fund (FIF) in GIFT City IFSC?

A Family Investment Fund is a regulated fund vehicle that pools money exclusively from a single family under the IFSCA (Fund Management) Regulations, 2025.

2. Who can set up a Family Investment Fund in GIFT IFSC?

A single family may establish an FIF through an FME registered in the Authorised FME category to manage the fund.

3. What is the minimum investment requirement for an FIF?

An FIF must achieve and maintain a minimum investment of USD 10 million within three years from the date of its certificate of registration.

4. What assets can a Family Investment Fund invest in?

Subject to IFSCA requirements, an FIF may invest in securities, debt instruments, derivatives, investment scheme units, LLPs and physical assets such as real estate, bullion and art.

5. Can a Family Investment Fund serve multiple families?

No. An FIF is restricted to a single family. Managers seeking to serve multiple families may explore the multi-family office framework under regulation 81, subject to applicable conditions.

6. Does an FIF automatically qualify for tax benefits in GIFT IFSC?

No. Tax treatment depends on the applicable provisions of the Income-tax Act, 2025, including the specific conditions for any claimed exemption or deduction.

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