Azim Premji, non-executive member of the board and founder chairman of Wipro
Dozens of applications for family investment fund that allow families to make investments across various asset classes and instruments offshore, are still pending with GIFT City authorties, said the people
Mumbai:
GIFT City granted its first approval to billionaire Azim Premji’s family office to invest its capital overseas, raising hope for the wealthy as they wait for clarifications from regulators to make similar moves.
Premji Invest has received an in-principle approval to set up a so-called family investment fund (FIF) at Gujarat International Finance Tec-City (GIFT City), according to people familiar with the matter.
Dozens of applications for FIFs that allow families to make investments across various asset classes and instruments offshore, are still pending, said the people.
Premji Invest and billionaire Narayana Murthy-backed Catamaran Ventures were among the first to seek approvals, according to the people.
Representatives for International Financial Services Centres Authority, which governs GIFT City, didn’t respond to requests for comment while a spokesman for Premji Invest declined to comment.
The country has placed strict controls on moving capital overseas. Residents are allowed to remit $250,000 each year, including purchase of property, investment in shares, and securities as well as setting up joint ventures or subsidiaries abroad. Touted by the Modi government as a free market pilot, GIFT city aims to become a financial hub unhampered by rules and taxes.
India’s rising wealth has spurred the growth of family offices and the demand for portfolio diversification. Many began exploring setting up investment offices abroad after the Reserve Bank of India (RBI) eased some rules in August 2022. These regulations would allow non-financial entities invest up to 400 per cent of their net worth through the newly established overseas offices.
However, a few months later, the regulator told bankers that these relaxed rules were not intended to allow wealthy individuals to set up family offices abroad and asked banks to stop facilitating these structures, according to some participants on the call.
The RBI also told the bankers it would soon release a document to provide clarifications on frequently asked questions on the matter, the people said.
RBI is yet to release the document, according to the people. The central bank didn’t respond to a request for comment.
Bloomberg