Side by side
| SEBI AIF | GIFT City (IFSC) scheme | |
|---|---|---|
| Regulator | SEBI | IFSCA |
| Currency | Rupees | US dollars or other foreign currency |
| Manager | Investment manager meeting SEBI’s team and NISM rules | Fund management entity: USD 75,000 (Authorised) or USD 500,000 (Registered, Non-Retail) net worth |
| Minimum corpus | ₹20 crore | USD 3 million |
| Minimum per investor | ₹1 crore; none for accredited investors | USD 250,000 (VC scheme), USD 150,000 (restricted scheme) |
| Maximum investors | 1,000 (accredited investors not counted) | 50 (VC scheme), 1,000 (restricted scheme) |
| Launch | 10 working days after PPM filing via merchant banker | Opens once IFSCA takes the PPM on record |
| Investing abroad | Limited: up to 25% of investable funds, within an industry-wide cap | Can invest in India and overseas |
| Tax | Pass-through for Category I and II | IFSC incentives: manager tax holiday, exemptions for non-resident investors |
| Resident Indian investors | Invest directly in rupees | Invest through LRS (USD 250,000 a year per person, TCS applies) |
When a SEBI AIF wins
- Your investors are mostly resident Indians — family offices, HNIs, corporates — writing rupee cheques.
- You invest in Indian startups and companies.
- You want domestic LPs such as banks and insurers (within RBI limits on regulated entities investing in AIFs).
When GIFT City wins
- Your LPs are NRIs, foreign family offices or global institutions who want a dollar vehicle.
- You want to invest outside India, or in Indian companies alongside overseas holdcos.
- You’re relocating an offshore fund to India — tax-neutral relocation is available until 31 March 2030.
Running both
Many managers run a SEBI AIF for domestic LPs and a GIFT City scheme for global LPs, investing side by side. That brings allocation policies, two sets of accounts and two regulators — plan the fund finance function before first close.
Next steps: SEBI AIF registration · GIFT City fund setup · our fund setup service.
Frequently asked questions
Is a GIFT City fund better than a SEBI AIF?
Neither is better in general. A SEBI AIF suits resident Indian investors and rupee investments; a GIFT City scheme suits global and NRI investors, dollar investing and overseas investments.
Can resident Indians invest in a GIFT City fund?
Yes, through the Liberalised Remittance Scheme, within USD 250,000 per person per financial year, with TCS on investment remittances above ₹10 lakh.
Can a SEBI AIF invest outside India?
Only within limits: up to 25% of investable funds in equity or equity-linked instruments of offshore venture capital undertakings, subject to an industry-wide cap allotted by SEBI.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.