- Date : 09/05/2023
- Read: 3 mins
HNIs can now get the option of investing in global fund management services as GIFT City integrates SGX Nifty Derivatives into its list of offerings.
- GIFT City is a separate jurisdiction that offers a range of financial services.
- GIFT City has recently added the SGX Nifty derivatives to its list of offerings.
- HNIs can now invest in different lucrative avenues through GIFT City.
- International PMS schemes can appeal to HNIs and help them diversify their portfolio in international markets.
The Gujarat International Finance Tec-City (GIFT City) is being established as the financial services hub. Located at Gandhinagar in Gujarat, GIFT City is an International Financial Services Centre considered a separate jurisdiction. Leading financial services companies are opening branches at the international hub to cater to Indian investors.
The latest to join GIFT City is the SGX Nifty derivatives, which currently trade in Singapore. Per reports, Singapore operations would be ceased and transferred to India to NSE IFSC - SGX Connect effective 3 July 2023. The SGX Nifty derivatives are an important indicator of the expected performance of the Indian stock market. Usually, it indicates the future movements of the stock market so that you know what to expect.
What’s in it for High Net-Worth Individuals (HNIs)?
Besides the SGX Nifty derivatives, other global PMS (Portfolio Management Service) schemes are available in GIFT City. Given the higher investment criterion, such PMS schemes attract HNIs and Ultra HNIs.
The leading names offering global PMS schemes include Marcellus and Phillip Capital.
Here are some features of these schemes:
- The investments in GIFT City would be regulated by IFSCA (Fund Management) Regulations 2022
- Per regulations, the minimum investment required for the global PMS schemes is $150,000, within the LRS (Liberalised Remittance Scheme) of $250,000
- Interested investors would have to open a bank account in GIFT City
- A tripartite agreement exists between the investor, the portfolio manager, and the international broker/custodian
- NRIs investing in overseas PMS funds through GIFT City can claim tax exemption on the income earned through such investments
- For resident Indians, investment in PMS schemes would attract capital gains tax. If they invest for 2 years (3 years in the case of Exchange-Traded Funds), the tax rate would be 20% with the benefit of indexation
- There would be a TCS (Tax Collected at Source) at 20% for any foreign remittance effective July 2023
Also Read – Learn whether or not to exit a PMS which is underperforming
Other investment options for HNIs
While the GIFT City PMS schemes allow HNIs international exposure, there are other ways too in which HNIs can invest in international securities.
These include the following:
- Through international mutual funds
- By investing in international shares through eligible brokers
- Through readymade portfolios available with select brokers
However, the GIFT City PMS route is a better alternative if you want to invest in a PMS scheme that invests internationally.
Also Read – Learn about attractive PMS investing strategies for maximum returns.
The bottom line
HNIs can diversify their portfolios internationally with the global PMS schemes that GIFT City is launching soon. This would help them match and provide for their international goals like creating funds for the children’s higher education abroad, planning an international trip, relocation, etc.
However, HNIs should assess the PMS's credibility, past performance, and experience before investing in one. Choosing the right PMS can help them generate the maximum possible returns at the lowest possible risks.
Also Read – Find out whether GIFT City can put India in the league of global financial hubs.
Source:
- GIFT City is a separate jurisdiction that offers a range of financial services.
- GIFT City has recently added the SGX Nifty derivatives to its list of offerings.
- HNIs can now invest in different lucrative avenues through GIFT City.
- International PMS schemes can appeal to HNIs and help them diversify their portfolio in international markets.
The Gujarat International Finance Tec-City (GIFT City) is being established as the financial services hub. Located at Gandhinagar in Gujarat, GIFT City is an International Financial Services Centre considered a separate jurisdiction. Leading financial services companies are opening branches at the international hub to cater to Indian investors.
The latest to join GIFT City is the SGX Nifty derivatives, which currently trade in Singapore. Per reports, Singapore operations would be ceased and transferred to India to NSE IFSC - SGX Connect effective 3 July 2023. The SGX Nifty derivatives are an important indicator of the expected performance of the Indian stock market. Usually, it indicates the future movements of the stock market so that you know what to expect.
What’s in it for High Net-Worth Individuals (HNIs)?
Besides the SGX Nifty derivatives, other global PMS (Portfolio Management Service) schemes are available in GIFT City. Given the higher investment criterion, such PMS schemes attract HNIs and Ultra HNIs.
The leading names offering global PMS schemes include Marcellus and Phillip Capital.
Here are some features of these schemes:
- The investments in GIFT City would be regulated by IFSCA (Fund Management) Regulations 2022
- Per regulations, the minimum investment required for the global PMS schemes is $150,000, within the LRS (Liberalised Remittance Scheme) of $250,000
- Interested investors would have to open a bank account in GIFT City
- A tripartite agreement exists between the investor, the portfolio manager, and the international broker/custodian
- NRIs investing in overseas PMS funds through GIFT City can claim tax exemption on the income earned through such investments
- For resident Indians, investment in PMS schemes would attract capital gains tax. If they invest for 2 years (3 years in the case of Exchange-Traded Funds), the tax rate would be 20% with the benefit of indexation
- There would be a TCS (Tax Collected at Source) at 20% for any foreign remittance effective July 2023
Also Read – Learn whether or not to exit a PMS which is underperforming
Other investment options for HNIs
While the GIFT City PMS schemes allow HNIs international exposure, there are other ways too in which HNIs can invest in international securities.
These include the following:
- Through international mutual funds
- By investing in international shares through eligible brokers
- Through readymade portfolios available with select brokers
However, the GIFT City PMS route is a better alternative if you want to invest in a PMS scheme that invests internationally.
Also Read – Learn about attractive PMS investing strategies for maximum returns.
The bottom line
HNIs can diversify their portfolios internationally with the global PMS schemes that GIFT City is launching soon. This would help them match and provide for their international goals like creating funds for the children’s higher education abroad, planning an international trip, relocation, etc.
However, HNIs should assess the PMS's credibility, past performance, and experience before investing in one. Choosing the right PMS can help them generate the maximum possible returns at the lowest possible risks.
Also Read – Find out whether GIFT City can put India in the league of global financial hubs.
Source:
