Is it true that physical presence in GIFT City is no longer required for leasing?

Not for each SPV, which is the change. The SPV's presence is provided through its TCSP. The TCSP itself must be physically present with a full-time Principal Officer and Compliance Officer in the IFSC, a governing body, AML/KYC systems and an audit framework. Presence has been consolidated, not eliminated.

Can an Indian company sponsor a leasing SPV through a TCSP?

Yes. A TCSP may serve an SPV in the IFSC even where the transaction is at the request of, or for the benefit of, a person resident in India, provided the SPV is the primary service recipient. The Indian sponsor is not treated as the TCSP's direct client merely by that association. The FEMA and tax treatment of the sponsor's position is a separate analysis.

What does an SPV still have to comply with?

Registration as a finance company in the SPV category, the conditions of its permitted activity, and the reporting the TCSP makes on its behalf. It is exempt from the prudential and governance regulations that apply to a full finance company. The TCSP carries the governance, record-keeping and AML obligations.

Who can set up a TCSP?

A company or LLP incorporated in the IFSC whose promoters are from jurisdictions not designated high-risk by FATF, with a governing body, internal audit, segregation of duties, a conflicts policy, professional indemnity cover, and full-time Principal and Compliance Officers holding a professional or post-graduate qualification in finance, law or commerce, the Principal Officer with at least five years' post-qualification experience in financial services.

IFSCA's TCSP and SPV Rules: What Changed in GIFT City

Since the IFSCA (Finance Company) Regulations, 2021 and the aircraft leasing framework of 2022, a lessor has been able to set up a finance company in GIFT City to lease aircraft, ships and equipment, with a tax holiday, no withholding on lease rentals and no customs duty. IFSCA's own consultation paper of March 2026 recorded why that had not produced a leasing hub: many IFSC leasing entities functioned only as sub-lessors, with ownership, financing and administration remaining in Dublin or Singapore. The fixed cost of a separate establishment for each vehicle, with its own officers, office and governance, did not justify running a single-aircraft deal through the IFSC. Two amendments notified on 7 May 2026 address that.

The two notifications

IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026 (F. No. IFSCA/GN/2026/008) insert Chapter VA into the TechFin and Ancillary Services Regulations, 2025, creating the Trust and Company Services Provider (TCSP) as a regulated category.

IFSCA (Finance Company) (Amendment) Regulations, 2026 (F. No. IFSCA/GN/2026/009) amend the Finance Company Regulations, 2021 to create the Special Purpose Vehicle: a finance company incorporated or administered by a TCSP to undertake permissible leasing or financing activity.

They work as a pair. The TCSP is the administrative backbone; the SPV is the transaction vehicle.

What a TCSP may do

Service (Fifth Schedule)	In practice
Act as agent for setting up companies, LLPs or trusts	Incorporates the SPV for the lessor
Act as, or arrange, trustee, director, company secretary or nominee shareholder	Supplies the SPV's key personnel
Act as, or arrange, partner or designated partner in an LLP	The same for LLP-structured vehicles
Provide registered office, business or administrative address	The SPV's formal IFSC presence sits with the TCSP
Other services permitted by the Authority	Room for the scope to develop

One TCSP may administer many SPVs, spreading the fixed cost of IFSC presence across many transactions.

What the SPV category changes

	Leasing finance company (before)	SPV (after)
Minimum owned fund	USD 3 million for core leasing	Paid-up capital required under the Companies Act, 2013
Prudential requirements (Regulation 4)	Apply	Exempt
Governance and disclosure (Regulation 8)	Apply	Exempt
Own establishment and officers in IFSC	Required	Provided through the TCSP

The logic is that the SPV is a transaction vehicle supervised through its TCSP, which IFSCA regulates directly; a parallel compliance layer at SPV level is not needed.

Physical presence: the accurate statement

The claim circulating in the leasing market is that physical presence in the IFSC is no longer mandatory. The accurate statement is narrower. Each SPV no longer needs its own office, officers and governance in the IFSC. The TCSP does: under Regulation 10G of the new chapter, the Principal Officer and Compliance Officer must be based in the IFSC and be full-time employees of the TCSP, and the TCSP must maintain governance, internal controls, AML/CFT/KYC systems and an independent audit framework there. Presence has been consolidated in the service provider, not removed. That is the model that made the Irish corporate-service industry the administrator of the world's aircraft leasing SPVs.

Requirements for a TCSP

Form: a company or LLP incorporated in the IFSC; promoters and partners from jurisdictions not designated high-risk by FATF.
Governance: a governing body with a documented framework; internal audit or independent review covering AML/CFT/KYC, governance and regulatory compliance; segregation of duties; a conflicts-of-interest policy.
Records: accurate, current records for every entity administered, retained for at least five years after the relationship ends.
Personnel: full-time Principal Officer and Compliance Officer in the IFSC, each with a professional or post-graduate qualification in finance, law or commerce; the Principal Officer with at least five years' post-qualification experience in financial services.
Insurance: professional indemnity cover proportionate to scale and risk.
Arm's length: where the TCSP carries on other business, a declared arm's-length relationship between that business and its TCSP activity.

Whom a TCSP may serve

Non-resident clients from jurisdictions not designated high-risk by FATF, and SPVs in the IFSC, including where the transaction is at the request of or for the benefit of a person resident in India, provided the SPV is the primary service recipient. An Indian sponsor or financier of the SPV is not, by that association alone, a direct client of the TCSP; the TCSP's contractual obligations run to the SPV.

A before-and-after

A lessor outside India wants to lease a wide-body aircraft to an Indian carrier through the IFSC for the withholding-tax and Cape Town Convention benefits. Before May 2026 it would incorporate an IFSC subsidiary, hire a resident Principal Officer and Compliance Officer, build AML and KYC systems, rent an office and set up governance, for one transaction; many lessors kept the deal in Dublin instead. After May 2026 it instructs a registered TCSP, which incorporates an SPV, supplies nominee director and company secretary, provides the registered office, and handles compliance and reporting to IFSCA. The SPV's capital requirement is its Companies Act paid-up capital. The economics of a single-asset deal now work.

What to do now

Lessors: shortlist registered TCSPs as they are licensed, and prepare the SPV's transaction documents against the finance company SPV conditions.
Corporate service providers: assess the Chapter VA requirements, in particular the two full-time officers and the audit framework, and apply for registration.
Indian sponsors: take the FEMA and tax analysis of sponsoring or financing an IFSC SPV before approaching a TCSP; the regulations permit it, but the sponsor's own position is not addressed by them.

The framework is new and IFSCA's implementing guidance will develop. Positions taken in the first year should be documented against the regulation text, not against market summaries of it.

In short

On 7 May 2026 the Gazette published two IFSCA amendments dated 5 May 2026: Chapter VA of the TechFin and Ancillary Services Regulations creating the Trust and Company Services Provider (TCSP), and an amendment to the Finance Company Regulations creating the SPV, a finance company incorporated or administered by a TCSP for leasing or financing.
A TCSP may incorporate SPVs, act as or arrange director, company secretary, trustee or nominee shareholder, and provide the registered office, so that many SPVs share one establishment.
An SPV's minimum owned fund is its Companies Act paid-up capital, not the USD 3 million that applied to a leasing finance company, and it is exempt from the prudential (Regulation 4) and governance and disclosure (Regulation 8) requirements.
Physical presence in the IFSC has not been removed; it has moved. The TCSP's Principal Officer and Compliance Officer must be full-time employees based in the IFSC.

Questions we are asked about this

Is it true that physical presence in GIFT City is no longer required for leasing?: Not for each SPV, which is the change. The SPV's presence is provided through its TCSP. The TCSP itself must be physically present with a full-time Principal Officer and Compliance Officer in the IFSC, a governing body, AML/KYC systems and an audit framework. Presence has been consolidated, not eliminated.
Can an Indian company sponsor a leasing SPV through a TCSP?: Yes. A TCSP may serve an SPV in the IFSC even where the transaction is at the request of, or for the benefit of, a person resident in India, provided the SPV is the primary service recipient. The Indian sponsor is not treated as the TCSP's direct client merely by that association. The FEMA and tax treatment of the sponsor's position is a separate analysis.
What does an SPV still have to comply with?: Registration as a finance company in the SPV category, the conditions of its permitted activity, and the reporting the TCSP makes on its behalf. It is exempt from the prudential and governance regulations that apply to a full finance company. The TCSP carries the governance, record-keeping and AML obligations.
Who can set up a TCSP?: A company or LLP incorporated in the IFSC whose promoters are from jurisdictions not designated high-risk by FATF, with a governing body, internal audit, segregation of duties, a conflicts policy, professional indemnity cover, and full-time Principal and Compliance Officers holding a professional or post-graduate qualification in finance, law or commerce, the Principal Officer with at least five years' post-qualification experience in financial services.

Primary sources

The instruments this article relies on. Links go to the issuing authority; search the document number there for the text in force.