IFSCA regulates fund managers in GIFT City through three tiers of Fund Management Entity registration — Authorised, Registered Non-Retail, and Registered Retail — each calibrated to a different investor base and scope of activity. Choosing the wrong tier at the outset either overburdens a small manager with governance requirements it does not yet need, or locks a growth-stage manager into a category it will quickly outgrow.
This article sets out the eligibility criteria, net worth thresholds, Key Managerial Personnel requirements, and scheme filing implications for each category, so you can map your investor base and strategy to the right registration from day one.
Why the category choice matters
Under the IFSCA (Fund Management) Regulations, 2022, the FME category determines which schemes you can launch, how much capital you must hold as net worth, how many Key Managerial Personnel you must appoint, and what governance structure your board needs. It is not a label you can quietly upgrade later without cost: moving categories generally means a fresh or amended application, updated net worth, and additional KMP appointments before you can launch a scheme type outside your existing category's scope.
Get the category assessment right against your actual fundraising plan — not just your first fund — because the cost of under-provisioning for growth is higher than the cost of a marginally larger initial capital commitment.
Authorised FME: the lightest-touch category
An Authorised FME suits managers whose activity is confined to Venture Capital Schemes (including Angel Schemes) investing in unlisted securities of start-ups and early-stage companies, or a Family Investment Fund managing proprietary capital for a single family or a small group of related family offices. It is not a route for managing outside institutional or public capital at scale.
The minimum net worth for this category is the lowest of the three tiers, and only one KMP — a Principal Officer — is mandatory. There is no minimum director count and no independent director requirement. The investor base is restricted to accredited investors and to investors committing a prescribed minimum per scheme, with a reduced threshold for the FME's own employees, directors, and designated partners investing alongside the fund.
Registered FME (Non-Retail): the standard institutional tier
Most fund managers building an institutional or high-net-worth alternative asset management business in GIFT City register at this level. It permits Restricted Schemes — the GIFT IFSC equivalent of Category I, II, and III AIFs — along with Portfolio Management Services, multi-family office mandates, and acting as investment manager for privately placed REITs and InvITs.
Two KMPs are mandatory at this tier: a Principal Officer and a Compliance and Risk Manager, both required to be physically based in GIFT City. The minimum net worth sits meaningfully above the Authorised tier, reflecting the broader scope of activity and the larger, more diverse investor base this category is permitted to serve.
Registered FME (Retail): the highest eligibility bar
A Registered FME (Retail) can do everything a Non-Retail FME can, plus launch retail mutual fund-equivalent schemes open to the general investing public, Exchange Traded Funds, and public offers of Investment Trusts such as REITs and InvITs. This is the category built for managers intending to run publicly distributed products rather than privately placed ones.
The governance and track-record bar rises sharply here. Three KMPs are required — a Principal Officer, a Compliance and Risk Manager, and a KMP specifically responsible for fund management — and the FME must maintain a board of at least four directors, with at least half being independent. Track record requirements are the most demanding of the three tiers: broadly, either the FME (or its holding company) must demonstrate several years managing a substantial AUM across a large investor base, or a shareholder controlling a significant stake must independently carry several years of financial services experience.
Category comparison at a glance
| Particulars | Authorised FME | Registered FME (Non-Retail) | Registered FME (Retail) |
|---|---|---|---|
| Typical activity | VC/Angel Schemes, Family Investment Funds | Restricted Schemes, PMS, private REITs/InvITs | All of the above, plus retail schemes, ETFs, public REITs/InvITs |
| Minimum net worth | Lowest of the three tiers | Prescribed mid-tier threshold | Highest of the three tiers |
| Minimum KMPs | 1 (Principal Officer) | 2 (Principal Officer + Compliance and Risk Manager) | 3 (adds a dedicated fund management KMP) |
| Board composition | No minimum prescribed | No minimum prescribed | At least 4 directors, 50%+ independent |
| Legal forms available | Company, LLP, branch | Company, LLP, branch | Company, branch (no LLP) |
| Track record needed | Relevant employee experience | Relevant employee experience | Extensive AUM/investor track record or shareholder financial-services experience |
Source: IFSCA (Fund Management) Regulations, 2022. Specific net worth figures should be confirmed against the current IFSCA circular, as currently prescribed by IFSCA, before you commit to a category.
The fit-and-proper standard applies across every layer
Whichever category you register under, IFSCA's fit-and-proper assessment is not limited to the Principal Officer. It extends to the FME entity itself, every director and designated partner, all KMPs, and every controlling shareholder. This is a broader net than many first-time applicants expect, and structures with layered holding companies or overseas shareholders need to surface the full chain of ownership before filing — a UBO missed two steps removed in the structure is a common reason IFSCA raises a query mid-review.
KMP qualification and experience thresholds
Across all three categories, the qualification bar for KMPs is uniform: a relevant professional qualification or postgraduate degree (of at least two years' duration) in fields such as finance, law, accountancy, economics, banking, insurance, or actuarial science from a recognised institution, or an equivalent certification recognised by IFSCA or another financial sector regulator. On top of the qualification, KMPs need a minimum number of years of relevant securities market or financial product experience — a threshold that rises for the Compliance and Risk Manager and the dedicated fund management KMP at the higher tiers. Any change of KMP after registration requires prior IFSCA approval, so succession planning for these roles should not be an afterthought.
Net worth: capital, not a fee
The minimum net worth prescribed for each category is the sponsor's own capital — it sits on the FME's balance sheet as paid-up capital and reserves, not as an application or registration fee paid to the regulator. It must be maintained on a continuing basis, not just demonstrated at the point of registration. Fund managers frequently under-capitalise the entity at incorporation and then need a fresh capital infusion, complete with board resolutions and filings, before the IFSCA application can go in. Structuring the authorised capital at incorporation to absorb the applicable net worth in one infusion avoids this rework — a point covered in more operational detail in our guide to setting up an FME in GIFT City.
Scheme filing implications by category
The category you register under directly gates which scheme documents IFSCA will accept. An Authorised FME cannot file a Restricted Scheme PPM for a Category III-equivalent structure; a Non-Retail FME cannot launch a retail mutual fund-equivalent scheme or an ETF. Where accredited-investor-only Restricted Schemes are being filed by a Non-Retail or Retail FME, the Green Channel route allows subscriptions to open immediately upon filing, without waiting for prior IFSCA sign-off — a material timeline advantage that is only available within the scheme types your category permits.
Managers uncertain whether their planned strategy fits within Non-Retail eligibility, or who are evaluating a PMS mandate specifically, should also review our dedicated article on setting up a PMS in GIFT City, since portfolio management is available under the Non-Retail category but is treated distinctly in documentation from pooled scheme structures.
Choosing the right category for your strategy
A useful way to frame the decision is to work backward from your intended investor base and product, not forward from what feels administratively lightest today. A manager planning only early-stage VC deployment through a small number of accredited investors fits comfortably within the Authorised tier. A manager raising institutional capital for a diversified private equity or credit strategy, or offering discretionary PMS mandates to family offices, should plan for Non-Retail from the outset. A manager with ambitions to eventually distribute a fund to the retail public — an ETF, for instance — should factor the Retail tier's board and KMP requirements into its long-term governance planning even if the first product launched is a Restricted Scheme under Non-Retail.
Frequently asked questions
Can an FME hold more than one category of registration at the same time?
An FME registers under a single category that governs the scope of schemes it can manage. Expanding scope beyond that category typically requires an upgrade application with the corresponding net worth and KMP additions, rather than parallel registrations.
What net worth applies to a branch structure?
For a branch of an entity already regulated by a financial sector regulator, the minimum net worth applicable to the category must be earmarked for GIFT IFSC purposes but can be maintained at the parent entity level, subject to ring-fencing requirements.
Does the Retail category require a physical board presence in GIFT City?
KMPs are required to be based in GIFT City to satisfy the substance requirement; the independent director composition requirement applies to board structure generally and should be assessed against your specific governance setup.
How is a Compliance and Risk Manager different from a Principal Officer?
The Principal Officer holds overall responsibility for the FME's fund management, risk, and compliance activities. The Compliance and Risk Manager, mandatory from the Non-Retail tier upward, is a dedicated second KMP focused specifically on compliance and risk oversight, separating that function from investment decision-making.
Can an Authorised FME later upgrade to Registered Non-Retail?
Yes, this is a common growth path, but it requires a fresh assessment against Non-Retail eligibility criteria, additional net worth infusion, and appointment of the second mandatory KMP before broader scheme types can be filed.
Is LLP available for a Registered FME (Retail)?
No. The LLP form is available to Authorised FMEs and Registered FMEs (Non-Retail) but not to Registered FMEs (Retail), which must use a company or branch structure.
Work with GIFT City Gateway
Selecting the right FME category — and structuring capital, KMP hiring, and board composition to match it — shapes every subsequent filing you make with IFSCA. GIFT City Gateway's regulatory filing and entity setup teams can assess your fundraising plan against category eligibility before you file, and our recruitment support can help place qualified Principal Officers and Compliance and Risk Managers. Explore the broader fund management entity directory or get in touch to discuss which category fits your strategy.
