Portfolio Management Services in GIFT City are not a separate licence — they are one of the permitted activities under a Registered FME (Non-Retail) registration with IFSCA. If you are planning to offer discretionary, personalised investment mandates to individual or family office clients out of GIFT IFSC, the path runs through the same Fund Management Entity framework that governs pooled funds, with client-level obligations layered on top.
This guide sets out what a GIFT City PMS actually is, the step-by-step process to set one up, the core capital and personnel requirements, and the operational obligations that follow registration.
What is a Portfolio Management Service in GIFT IFSC?
A PMS is a mandate under which a manager makes discretionary or non-discretionary investment decisions for an individual client's portfolio, distinct from a pooled fund where multiple investors share a single scheme. In GIFT City, PMS is offered by an FME registered at the Non-Retail tier, and each client relationship is documented and accounted for separately rather than through a common scheme structure.
The commercial appeal is that a GIFT IFSC PMS operates in foreign currency, serving global investors — including the Indian diaspora — who want personalised, India-linked exposure without the currency and treaty complexity of routing through a purely offshore jurisdiction.
Establishing your legal presence
The first step is incorporating the FME entity itself. GIFT City permits three routes: a new incorporation as a company or LLP within the IFSC, a branch of an existing Indian or foreign body corporate already regulated for similar activities, or a subsidiary of an Indian or foreign parent. Each route places the entity within the SEZ as a deemed foreign territory for financial transaction purposes, which is what allows foreign-currency dealing with international clients without the exchange control friction that applies onshore.
The choice of route mirrors the considerations that apply to any FME setup — a new incorporation offers the cleanest governance for a first-time manager, while a branch is faster for a manager already licensed abroad. Our broader guide to setting up an FME in GIFT City covers the incorporation and SEZ sequence in detail; the PMS-specific steps below build on that same foundation.
Core capital and professional requirements
Because PMS sits under the Registered FME (Non-Retail) category, the entity must meet that category's eligibility bar in full, not a reduced PMS-specific threshold.
| Requirement | Detail |
|---|---|
| Minimum net worth | Maintained on a continuing basis, at the level prescribed for Registered FME (Non-Retail) |
| Physical presence | A genuine office within the GIFT IFSC zone |
| Principal Officer | Minimum five years' relevant securities market experience, meeting IFSCA's fit-and-proper criteria |
| Compliance and Risk Manager | Minimum three years' relevant compliance and risk experience |
As with any FME, the net worth requirement represents the sponsor's own capital sitting as paid-up capital and reserves — it is not consumed as a regulatory fee and should be sized into the entity's authorised capital at incorporation rather than infused piecemeal later.
Completing the IFSCA registration process
Once the entity is incorporated and key personnel are identified, registration proceeds through IFSCA's standard FME application channel.
- Submit the application — the prescribed FME application form, submitted with supporting documents to IFSCA's designated applications email address.
- Assemble documentation, including the certificate of incorporation, MoA/AoA, a net worth certificate, audited financial statements for the preceding years, a detailed business plan for the GIFT IFSC operation, KYC for all promoters, directors, and KMPs, the full shareholding structure, and proof of fee payment.
- Pay the prescribed fees — a one-time application fee, a registration fee payable on approval, and a recurring annual fee thereafter. As currently prescribed by IFSCA, exact figures should be confirmed against the latest circular before budgeting, since fee schedules are periodically revised.
IFSCA reviews the application against the same fit-and-proper standard applied to any FME — covering the entity, its directors, KMPs, and controlling shareholders — and will typically raise queries that need a prompt response before registration is finalised.
Finalising client and operational setup
Registration is not the end point; a PMS needs a distinct operational layer for each client relationship before it can actually manage money.
- Minimum client investment: each client relationship must meet the prescribed minimum investment threshold for a PMS mandate.
- Segregated accounts: a separate foreign-currency bank account at an IFSC Banking Unit, and a separate demat account, for each client — ensuring client funds and securities are never commingled.
- Client agreements: a written agreement per client covering investment objectives, fee structure, risk disclosures, and contract duration.
- Custodian appointment: an independent, qualified custodian to hold client assets, a mandatory control that also mitigates conflict-of-interest risk between the manager and the assets it manages.
These obligations sit alongside the FME's broader ongoing compliance calendar — NAV or portfolio-level reporting where applicable, KMP change approvals, and maintenance of minimum net worth — which is best managed through a structured annual compliance programme rather than tracked ad hoc.
Key benefits of a GIFT City PMS
The tax and regulatory architecture of GIFT IFSC is a significant part of the PMS proposition. Business profits earned by an eligible IFSC unit can qualify for a prescribed tax holiday period, and the structure is generally exempt from GST, STT, and CTT on IFSC transactions — subject always to satisfying the specific conditions attached to those exemptions under current law. All client dealings run in foreign currency, removing exchange control friction for global clients, and IFSCA's single-regulator model means a PMS manager deals with one authority rather than navigating overlapping domestic regulators. The structure also gives clients direct access to global securities markets, not just Indian assets, which is a meaningful differentiator against domestic PMS offerings regulated onshore.
PMS versus a pooled fund scheme
| Feature | PMS | Pooled fund (Restricted Scheme) |
|---|---|---|
| Structure | Individual client account, segregated | Common scheme vehicle for multiple investors |
| Documentation | Bespoke client agreement per client | Common PPM/scheme documents for all investors |
| Custodian | Mandatory, per client or centrally appointed | Mandatory at scheme level |
| Minimum investment | Set at the client mandate level | Set at the scheme level, varies by scheme type |
| FME category required | Registered FME (Non-Retail) | Authorised or Registered, depending on scheme |
Managers weighing which structure fits their strategy should also read our companion piece on FME categories and eligibility in GIFT IFSC, since a PMS mandate and a Restricted Scheme both sit under the Non-Retail category but carry different documentation and client-onboarding obligations.
Frequently asked questions
Is a separate licence needed to offer PMS in GIFT City?
No. PMS is one of the permitted activities under a Registered FME (Non-Retail) registration with IFSCA; there is no standalone PMS licence distinct from the FME framework.
Can a PMS in GIFT City serve Indian resident clients?
PMS mandates in GIFT IFSC are structured for foreign-currency, non-resident and eligible investor participation under applicable FEMA and IFSCA norms; eligibility for any specific client category should be confirmed against current regulations before onboarding.
What is the minimum investment per PMS client?
IFSCA prescribes a minimum client investment threshold for PMS mandates; confirm the current figure against the latest IFSCA circular, as it is periodically revised.
Does a PMS need its own custodian, or can it share one with a fund the FME also manages?
An independent custodian must be appointed to hold client assets; whether the same custodian can service both PMS clients and pooled schemes managed by the same FME depends on the custodian's own capacity and segregation arrangements.
How long does it take to set up a PMS in GIFT City?
The timeline mirrors standard FME registration — typically several weeks for incorporation and SEZ approval, followed by the IFSCA review period — before client onboarding and account setup can begin.
Can an existing GIFT City FME add PMS to its activities later?
If the FME is already registered at the Non-Retail tier, adding PMS as an activity is generally an administrative extension of existing registration rather than a fresh licence; an Authorised FME would first need to upgrade to Non-Retail.
Work with GIFT City Gateway
Launching a PMS in GIFT City means getting FME registration, KMP hiring, client documentation, and custodian arrangements right in parallel. GIFT City Gateway's entity setup and regulatory filing teams handle this process end to end, and our operations support can help set up the segregated banking and demat infrastructure each client relationship requires. Use the setup cost calculator to plan your budget, browse the capital market intermediaries directory, or tell us what you need to get started.
