Unlocking Tax Benefits and Building Global Teams - A Strategic Opportunity for Accounting and CPA Firms
GIFT City (Gujarat International Finance Tec-City) is India’s first International Financial Services Centre (IFSC), offering a groundbreaking opportunity for CPA and accounting firms looking to expand their operations in a tax-efficient and globally connected environment. Situated between Ahmedabad and Gandhinagar, Gujarat, GIFT City has emerged as a vibrant hub for financial services, accounting, and taxation, combining state-of-the-art infrastructure with unmatched tax benefits.
GIFT City is developed under the Special Economic Zones Act, 2005, with a vision to create a global fintech and financial hub. Its eco-friendly infrastructure spans 62 million square feet of commercial, residential, and social facilities, offering seamless connectivity through airports and high-speed trains. As a regulatory gateway, GIFT City provides a favorable business environment for inbound and outbound international financial services, making it an attractive destination for accounting and CPA firms.
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The recent inclusion of accounting services—including bookkeeping, accounting, tax preparation, and other related activities—within the definition of approved businesses in GIFT City represents a transformative opportunity for CPA and accounting firms. This change enables firms to tap into the unparalleled tax benefits offered by GIFT City, including reduced to zero taxation for up to 10 years, making it a highly attractive destination for both domestic and international operations.
Here is the Link of the Circular.
The regulations aim to establish a regulatory framework for the development, registration, and operation of book-keeping, accounting, taxation, and financial crime compliance services within International Financial Services Centres (IFSCs) and to develop GIFT IFSC as a ‘global offshore centre for book-keeping, accounting, taxation and financial crime compliance services’ and create large employment opportunities for the talented Indian workforce.
Corporate Tax Exemption: 100% tax exemption on profits for any 10 years out of the first 15 years.
GST and Customs Exemptions: Transactions with offshore entities incur no GST.
Capital Gains Tax Benefits: Non-resident investors are exempt from capital gains tax on securities traded on GIFT IFSC exchanges.
Reduced Minimum Alternate Tax (MAT): Applicable at just 9% for IFSC-registered entities.
Expanded Services Framework: The IFSC framework now allows CPA and accounting firms to offer a wide range of services, including:
Financial Compliance: Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and FATF compliance.
Favorable Regulatory Environment: GIFT City offers a regulatory framework that eases business operations, comparable to global financial hubs like Singapore or Mauritius.
Entity Formation : The subsidiary will be registered as a Private Limited Company in India, owned 100% by the U.S. parent company.
Tax:The subsidiary will operate under a 0% tax regime, applicable through specific benefits offered (e.g., operations in GIFT City, tax exemptions, or SEZ incentives).
Principal Officer: We will appoint a principal officer responsible for the day-to-day operations and reporting.
Compliance Officer: A compliance officer will be designated to ensure the entity meets all statutory and regulatory obligations, including tax filings and labor law compliance.
Rented Premises: A small unit will be rented directly by the Indian subsidiary, based on the operational requirements.
Initial Team: The office will initially accommodate 5-10 employees, with flexibility to scale up if needed. The Indian subsidiary will directly employ 5-10 people under its payroll. Core team of 5-10 employees hired and managed directly by the Indian Private Limited Company at GIFT City. Additional employees hired and managed outside GIFT City through MYCPE ONE, following offshoring agreements.
Relocation of Workforce:The relocation of workforce from any group entities in India to GIFT IFSC is capped at 20% of the total workforce.
Onshoring and Offshoring Synergy: GIFT City enables firms to capture offshore business opportunities while maintaining robust onshore operations, creating a seamless synergy between compliance and cost efficiency.
Cost Efficiency Without Shell Operations:Unlike traditional tax havens, GIFT City encourages firms to build substantial operations, ensuring compliance and credibility while enjoying tax benefits.
Enhanced Service Offerings: Firms can diversify their service portfolio with approved activities like bookkeeping, accounting, taxation, and financial compliance, aligning with global standards.
We are already working with several CPA and accounting firms, assisting them in establishing operations in GIFT City. To learn more about the strategic advantages and operational steps, join our upcoming webinars in January, February, April, and May. These sessions will provide in-depth insights into the tax benefits, compliance requirements, and operational nuances of GIFT City.
We provide comprehensive support to US and Canadian Accounting and CPA firms, assisting them with every aspect of establishing their presence in GIFT City. Our services include setting up the entity, securing premises on rent, managing all regulatory compliances, appointing a principal officer and compliance officer, and overseeing end-to-end operations. This ensures a seamless, hassle-free experience for CPA firms, allowing them to focus on their core business activities while we handle the rest. Our turnkey solutions are offered at a minimal cost, making it a cost-effective choice for firms looking to leverage GIFT City’s benefits.
If you’d like to learn more, feel free to schedule a call with us. Click here to schedule a call
MYCPE ONE has recently established its own state-of-the-art operations center in GIFT City, marking a significant milestone in our growth journey. Our facility currently houses over 100 team members and is designed to meet global standards, featuring a dedicated cafeteria, modern conference facilities, and cutting-edge infrastructure. This move underscores our commitment to leveraging GIFT City’s strategic advantages, including its tax incentives and business-friendly ecosystem, to better serve our clients and expand our service offerings.
As part of our long-term vision, we plan to scale our operations to accommodate a 500-member team over the next three to four years. This expansion reflects our confidence in the opportunities GIFT City presents as a hub for innovation and operational excellence. Our growing presence in GIFT City allows us to better support accounting and CPA firms in exploring and maximizing the benefits of this unique international financial center.
We remain dedicated to providing comprehensive, turnkey solutions for firms looking to establish or enhance their operations in GIFT City while contributing to its evolution as a global financial and technology hub.
GIFT City represents a transformative opportunity for CPA and accounting firms to thrive in a global, tax-efficient environment. By leveraging the unique benefits and expanding service offerings, firms can position themselves as leaders in the ever-evolving financial landscape.
Take the first step toward unlocking unparalleled growth and compliance advantages in GIFT City.
The information provided above is based on our evaluation of the relevant provisions and should not be considered as expert advice. While we assist CPA and accounting firms in exploring and establishing opportunities like this, we strongly recommend that you independently evaluate your specific circumstances, consult with qualified experts, and conduct thorough due diligence. Please do not rely solely on this content or log for making decisions.
Shawn Parikh is the CEO and Co-Founder of MYCPE ONE. A Chartered Accountant by qualification, he has over 15 years of experience of being a problem solver for small to mid-size firms and over time he has given consultation to thousands of CPAs, accountants and tax pros. Shawn has always been a big believer and advocate of social enterprises and small accounting firms & businesses. He consults and speaks on several topics ranging from Building Remote Team - Remote Working, Offshore Staffing, strategic planning, Scalability of Accounting Practice, cloud accounting, practice management, LinkedIn marketing, etc.
Mukund Patel
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Nicholas Branson, CPA
Shawn Parikh
