- Regulator
- IFSCA
- Rules
- IFSCA (Fund Management) Regulations 2025, which replaced the 2022 Regulations
- Who can invest
- A single family and family-held entities
- Reported minimum
- USD 10 million within three years under the earlier rules; confirm the current text
- Forms reported
- Company, contributory trust, LLP
On this page
Who counts as a "single family"?
Under the earlier framework, this covered lineal descendants of a common ancestor, with their spouses and children. A circular of March 2023 extended it to entities controlled by the family in which it holds a substantial economic interest, reported as at least 90 percent. It also allowed a limited share of profit to go to staff and service providers.
IFSCA's press release of 19 February 2025 says the 2025 Regulations took in certain FIF provisions previously issued by circular. Before relying on these points, we read the current text and any later amendment. IFSCA issued a further consultation on these regulations in 2025, so expect changes.
What should a family check first?
- Corpus: can the family meet the minimum in the time allowed? USD 10 million within three years was the figure under the 2022 rules
- Source of funds: a resident individual's contribution may use the USD 250,000 Liberalised Remittance Scheme limit, which is per person
- Concentration: commentators report a limit on holding in a single company
- Presence: a principal officer and physical office in GIFT City are reported requirements
- Tax: exemptions apply to certain income and have conditions, so your CA should model the actual result
- Exit: how will members, including NRIs, get money out?
When is an FIF probably not the right tool?
- Most family assets are Indian property or a single Indian company
- The family mainly wants succession, not pooled investing
- The family cannot meet the corpus or bear the running cost
- Members disagree about pooling at all
- The tax benefit disappears once your CA models your real income
In these cases a will, a private trust or a family company usually does the job with far fewer moving parts.
What documents does the legal review cover?
We look at the constitutional documents of the vehicle, the family's contribution agreements, the decision-making rules, exit and transfer terms, how a member's death or divorce affects an interest, and consistency with wills and existing trusts. Investment strategy and tax modelling stay with your other advisers. We also check whether a family member's overseas residence changes the answer.
How does an FIF compare with an onshore structure?
| Point | FIF in GIFT City | Private trust or company |
|---|---|---|
| Purpose | Pooled family investing, often global | Holding and succession, often with Indian assets |
| Regulator | IFSCA | No sector regulator as such |
| Minimum size | Yes | No |
| Succession | Depends on the vehicle's documents | Trust deed or articles |
| Running cost | Higher: office, officer, compliance | Usually lower |
An FIF does not replace a will or a succession plan. Interests in the fund still pass under them, so plan them together. See also how to set up a family office.
This guide is general information, not legal advice. Tax points must be confirmed with your chartered accountant, and rules change, so we check the current text before acting on your matter.
Founder and Managing Partner, VIVS Legal. BLS, LL.B, LL.M, PGDBM, JAIIB.
