GIFT City

GIFT City (Gujarat International Finance Tec-City) is India’s first IFSC (International Financial Services Centre). Many financial products have been introduced in the GIFT City so that NRIs can invest in foreign currencies without converting to Indian rupees. Numerous tax advantages are also given to such investments to attract more investors and capital.
Many opportunities for NRI’s and Foreign Nationals/Investors to invest in GIFT City products/ investments such as:
Offshore Deposits, Foreign Currency Term Deposits, Global Equities and Bonds, Alternative Investment Funds (AIFs), Real Estate Investment Trusts (REITs), Startups and Fintech Companies.

ALTERNATIVE INVESTMENT FUNDS (AIF)

Alternative Investment Fund is a special investment category that differs from conventional investment instruments. It is a privately pooled fund. These investment vehicles adhere to the SEBI (Alternative Investment Funds) Regulations, 2012. AIFs can be formed as a company, Limited Liability Partnership (LLP), trust, etc.
There are multiple Benefits including Taxation reliefs for NRI’s to invest in AIFs.

PASSIVE FOREIGN INVESTMENT COMPANY (PFIC)

A PFIC is defined as a foreign (non-US based) corporation that meets one of the following two tests:

• Income Test: 75% or more of its gross income is passive income (earnings derived from rental property, limited partnership or other enterprise not actively involved); or
• Asset Test: 50% or more of the corporation’s assets produce, or are held to produce, passive income.

K-1

Form K-1, often referred to in the context of U.S. tax law, is a tax document used to report the income, deductions, and credits from partnerships, S corporations, estates, and trusts to the Internal Revenue Service (IRS) and the individual partners, shareholders, or beneficiaries. For NRIs (Non-Resident Indians) or other foreign investors involved in such entities within the United States, Form K-1 is particularly relevant.