This Fund Relocation Checklist is important for types of investment funds coming to the GIFT City. In early 2026, we have seen a massive shift: the Supreme Court of India’s ruling on the Tiger Global case (January 2026) sent shockwaves through Mauritius and Singapore-based funds.
The Supreme Court of India ruled that a Tax Residency Certificate (TRC) is no longer sufficient to claim treaty benefits if “commercial substance” is missing. This makes the April 1, 2026, Tax-Neutral Relocation Window the only “safe harbor” left for India-centric funds.
The Finance Act 2025-26 allows offshore funds to migrate to GIFT City without triggering the dreaded Capital Gains tax on the “transfer of assets.” Here is your 8-step roadmap to executing a “Mirror Migration.”
Step 1: Verify “Offshore Fund” Eligibility
To qualify for tax neutrality, the original entity must be:
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A resident of a country with which India has a DTAA (e.g., Singapore, Mauritius, Netherlands).
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Regulated by the financial regulator of that country.
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Moving assets to a “Resultant Fund” in the IFSC.
Step 2: Incorporate the “Resultant Fund” (IFSC)
You must set up a new entity in GIFT City.
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Structure: Category I, II, or III AIF (Alternative Investment Fund).
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Timeline: Registration as a Fund Management Entity (FME) with the IFSCA typically takes 45–60 days.
Step 3: Appoint an IFSC-Based Custodian
Under the February 2026 FM Amendments, you have a 24-month transitional window to appoint a local custodian. However, initiating this now builds the “Substance” required by the Supreme Court.
Step 4: Execute the “Mirror Issue” of Units
For the relocation to be tax-neutral:
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The Resultant Fund (IFSC) must issue units to the original investors of the Offshore Fund.
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The 90% Rule: You must maintain at least 90% of the original shareholding/unit-holding for at least one year post-migration.
Step 5: Asset Transfer & Grandfathering
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Transfer Indian securities (shares, bonds, derivatives) from the offshore FPI account to the new IFSC AIF account.
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Critical 2026 Update: Assets acquired before 2017 retain their “Grandfathered” status, meaning future exits are still protected under the old treaty rates even though the fund is now based in India.
Step 6: Compliance with the “22% Supply Rule”
If your fund manages Real Estate, ensure your office lease in the GIFT City SEZ is finalized. With the city’s expansion to 3,300 acres, “physical substance” (employees and a local desk) is the only way to avoid GAAR (General Anti-Avoidance Rules).
Step 7: PAN/TAN & FEMA Mapping
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Obtain a PAN (Permanent Account Number) for the new IFSC entity.
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Designate the fund as “Non-Resident” under FEMA, allowing it to hold and transact in USD.
Step 8: File Form 60 & Relocation Declarations
Finalize the tax-neutral claim with the Income Tax Department by filing the specific relocation disclosures mandated by the Section 47(viiad) amendment.
The “Why Now?” (The 2026 Reality)
| Risk Type | Mauritius/Singapore (Pre-Relocation) | GIFT City IFSC (Post-Relocation) |
| GAAR Scrutiny | Extreme (Post-Tiger Global Ruling) | Zero (Sovereign Approval) |
| Withholding Tax | 10% – 20% | 0% (for Non-Residents) |
| Operational Cost | High (USD/SGD inflation) | Low (INR/USD Arbitrage) |
| Compliance | Dual (Home + India) | Single (Unified IFSCA) |
Summary: Our key message to the migrating funds is this:
“Your tax relocation is legally secure, but is your data? We ensure your new IFSC office meets the IFSCA 2026 Cyber-Mandates before you move your first Dollar.”