GIFT City vs Mauritius vs Singapore, for India-focused funds.

GIFT City (Gujarat International Finance Tec-City) is India's International Financial Services Centre, regulated by IFSCA (International Financial Services Centres Authority). It is a Special Economic Zone with a dedicated tax, forex and regulatory regime designed to onshore activity that previously went to Singapore / Mauritius.

Tax features:

• Section 10(23FE): exemption on specified investments by Specified Persons (sovereign wealth, pension funds).
• Section 10(4D): 0% Indian tax on income earned by specified Category III AIFs operating in IFSC on specified types of investment income.
• Section 10(4F): 0% on income of non-resident unit holders of IFSC Category I/II/III AIFs on specified income.
• Standard 10-year 100% tax holiday for IFSC business units (Section 80LA).
• GST 0% on specified IFSC-based services.

Licensing: IFSCA Category I/II/III AIF regulations, familiar to Indian managers. GIFT City Fund Management Entity (FME) licence required for GPs.

Growing: ~100+ AIFs set up at GIFT City by 2025-26. Treated as 'onshore but international' — Indian capital-markets regulators are comfortable; foreign LPs are increasingly comfortable.

Mauritius Global Business Licence (post-2019 reforms, previously Category 1 GBL) is the historical choice for India-focused funds. Pre-2016 protocol: capital-gains exemption on Indian equity. Post-2016 protocol: grandfathered pre-2017 holdings only.

Current status:

• Mauritius GBL continues to work for new India investment on dividend, interest, royalty flows (treaty-reduced rates).
• No capital-gains advantage on new Indian equity post-April 2017.
• LOB + PPT + GAAR triple test applies to any Indian treaty-benefit claim.
• Mauritius local corporate tax 15% with partial-credit regime.
• Substance requirements enforced: 2+ Mauritius resident directors, Mauritius operating expenditure, Mauritius physical office, Mauritius accounting.

Where it still fits: funds with grandfathered pre-2017 Indian equity holdings, India-UK-Africa structures where Mauritius serves multi-jurisdiction, specialist private debt funds routed via Mauritius.

Variable Capital Company (VCC) is Singapore's dedicated fund vehicle, launched 2020. Replaces offshore structures for Singapore-regulated managers.

Features:

• Umbrella structure — one VCC can hold multiple sub-funds with ring-fenced assets and liabilities.
• Regulated by MAS as a corporate vehicle.
• 17% Singapore corporate tax (effective 10-12% with partial exemption).
• Section 13X / 13R tax exemptions available for qualifying fund managers.
• Strong treaty network and investor familiarity.

Where it fits: pan-Asia funds investing across Singapore, India, Southeast Asia, Hong Kong, Indonesia. Not optimal for India-only fund (GIFT City is becoming the better choice there) but fits regional-fund structures.

GIFT City IFSC — choose if:

• Fund is India-focused (90%+ Indian investments).
• Indian LPs are present or likely.
• Fund manager is India-based or willing to establish Fund Management Entity at IFSC.
• Tax efficiency on India-source income is primary optimisation.

Mauritius GBL — choose if:

• Fund has existing Mauritius infrastructure.
• Multi-jurisdiction (India + Africa + Middle East) focus.
• Private debt or specific instruments where Mauritius offers advantage.
• Grandfathered pre-2017 Indian equity positions to manage.

Singapore VCC — choose if:

• Pan-Asia or regional fund (India is one of many markets).
• Singapore MAS licensing for the fund manager.
• Strong Singapore / Southeast Asia LP base.
• Multi-currency / multi-asset flexibility.

Many India-focused fund managers now choose GIFT City IFSC as default. Mauritius use is receding to legacy. Singapore VCC fits specific regional-fund mandates.