23 Jul 2026
India moves to launch VCC regime in GIFT City, aiming to rival Singapore fund structures
05 Jun 2026
05 Jun 2026
This is a link-enhanced version of an article that first appeared in Moneycontrol.
Article Overview:
The article highlights India’s proposed Variable Capital Company (VCC) framework for GIFT City, which is designed to attract global fund managers and position India as a competitive alternative to established fund domiciles such as Singapore. The proposed structure seeks to offer globally familiar fund vehicles, greater flexibility and enhanced investor confidence through statutory segregation of assets and liabilities.
Partner Quote:
Our Partner, Pallabi Ghosal, shared her perspective. Here’s what she had to say:
“One of the key advantages of VCCs is that they are not a trust. Currently, in India, trust is the most prevalent fund structure. Despite large global capital raises, the trust form still has to be explained to first-time LPs investing into India, as it is unfamiliar to most offshore institutional investors.”
“Schemes launched under an umbrella trust have no separate legal personality, and the law does not statutorily ring-fence assets and liabilities across schemes. Institutional LPs are therefore sometimes reluctant to sit alongside other schemes under a single trust.”
The VCC mechanism addresses this problem directly as it gives legal recognition on the sub-fund construct and also ring-fences all liabilities at the sub-fund level. “[This] gives LPs the segregation comfort they expect. Because the VCC is a globally recognised fund form, it positions GIFT City as a credible and familiar domicile for global capital.”
The move to VCCs will also make India a more attractive destination for global capital. Since it draws inspiration from global best practices, “an offshore fund can re-domicile into GIFT City with structural continuity instead of unwinding and rebuilding.”
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