GIFT City emerges as top financial center for family offices navigating India's regulatory maze, says Julius Baer-EY

While navigating domestic investments, especially in private equity and venture capital, family offices also need to align with SEBI’s Alternative Investment Fund (AIF) regulations.

As regulations continue to evolve, GIFT City is steadily positioning itself as a promising hub for both global and domestic investors. The government's push to develop it into a world-class financial centre is expected to streamline regulatory processes and enhance clarity over time, a joint report by Julius Baer and Ernst & Young stated.

Recent policy moves have already enabled the creation and management of investment vehicles under the International Financial Services Centres Authority (IFSCA) framework. This offers asset managers and investors a tax-efficient, globally competitive platform to operate from.

Also read: Apple’s non-iPhone growth soars in India; MacBook, iPad revenue to touch $1.8 billion in 2025

But even as GIFT City presents fresh opportunities, the expansion of family offices in India is shadowed by rising regulatory complexity. A growing number of ultra-rich families and entrepreneurs are setting up family offices to manage wealth and investments, but they remain wary of the legal and compliance burden that comes with it.

According to a study in the report, nearly half of Indian family offices see new or changing tax laws as a key concern, while over a third are troubled by the challenges of cross-border investments and regulatory uncertainty. The environment is particularly tricky for those diversifying across sectors and geographies, as rules around foreign investments are not only complex but often evolving.

Read more: EAM S Jaishankar on India-US trade deal: 'Very intricate negotiation, there will be some give and take’

To manage this, many family offices rely heavily on professionals for due diligence, regulatory interpretation, and investment analysis. They must stay compliant with multiple frameworks—from the Income-tax Act, 1961, for tax obligations, to FEMA guidelines for foreign exchange, and the Prevention of Money Laundering Act, 2002, to ensure transparency and legality of operations.

While navigating domestic investments, especially in private equity and venture capital, family offices also need to align with SEBI’s Alternative Investment Fund (AIF) regulations. This web of compliance significantly shapes their investment strategy, influencing decisions around asset allocation and corporate structuring.

Some offices adopt tailored tax strategies—such as selecting an optimal legal structure or fine-tuning asset distribution—to stay ahead of regulatory risks and preserve long-term returns. The Julius Baer-EY report notes that awareness of tax implications is central to how family offices build sustainable investment portfolios.

As India’s family office ecosystem evolves, there’s a growing demand for clearer and more supportive policy frameworks. The report says that GIFT City would be a possible route to global market access and simplified regulations.