Managing agents wanting to set up a service company in India - GIFT City must be aware of the following considerations and requirements that make up the local environment.
Setting up a service company in India – GIFT City
Key considerations
Financial considerations
Minimum paid-up capital requirement: INR 500,000 (INR 5 lakh) for the Service Company.
Assigned capital requirement (of USD 1.5m equivalent) is met at Lloyd’s IFSC level and is not required at Service Company level.
Lloyd’s are confirming the applicability of regulatory fees, which may be as below:
Tax incentives (e.g. tax holiday) exist for IFSC entities, though treatment requires specialist advice.
Business is transacted in freely convertible foreign currency, with one INR account permitted for expenses.
A business plan required as part of the application covering underwriting activity, structure, and financial projections.
Assigned capital requirement (of USD 1.5m equivalent) is met at Lloyd’s IFSC level and is not required at Service Company level.
Lloyd’s are confirming the applicability of regulatory fees, which may be as below:
- Application fee: USD 1,000
- Registration fee: USD 5,000
- Annual fee: USD 12,500 or 0.05% of GWP (Gross Written Premium) (whichever higher)
Tax incentives (e.g. tax holiday) exist for IFSC entities, though treatment requires specialist advice.
Business is transacted in freely convertible foreign currency, with one INR account permitted for expenses.
A business plan required as part of the application covering underwriting activity, structure, and financial projections.
Operational considerations
The Service Company must be incorporated in India under the Companies Act 2013.
Activities must align with binding authority model only (acting on behalf of Lloyd’s syndicates).
Co-location in Lloyd’s IFSC office space is mandatory in GIFT City. The serviced office is managed by Lloyd’s appointed workspace provider, who will assist with space allocation, leasing formalities and related logistical support.
Systems and records must comply with IFSCA recordkeeping regulations and Lloyd’s reporting requirements.
Activities must align with binding authority model only (acting on behalf of Lloyd’s syndicates).
Co-location in Lloyd’s IFSC office space is mandatory in GIFT City. The serviced office is managed by Lloyd’s appointed workspace provider, who will assist with space allocation, leasing formalities and related logistical support.
Systems and records must comply with IFSCA recordkeeping regulations and Lloyd’s reporting requirements.
Employee considerations
Mandatory roles:
Roles cannot be combined into one individual.
- Principal Officer
- Officer responsible for underwriting
- Be resident in India
- Be directly employed by the Service Company
- Meet IFSCA “fit and proper” criteria
Roles cannot be combined into one individual.
Regulatory considerations
Registration required with:
Reporting and solvency obligations primarily sit at Lloyd’s IFSC level, supported by Service Company controls.
- Lloyd’s IFSC
- International Financial Services Centres Authority (IFSCA)
Reporting and solvency obligations primarily sit at Lloyd’s IFSC level, supported by Service Company controls.
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- Early engagement with Lloyd’s IFSC is strongly recommended before starting the process.
- Service Companies act on behalf of Lloyd’s syndicates via binding authority only.
- Permitted structures:
- Single syndicate (standard model)
- Multiple syndicates under same managing agent - Must commence operations within 12 months of approval.
Key Requirements for setting up a Service Company
- Engage with Lloyd’s IFSC Principal Officer at the outset.
- Determine promoter route: (a) Managing Agent; (b) group entity of Managing Agent or Member as permitted by Lloyd's; or (c) Indian Company meeting specified criteria.
- Incorporate an Indian entity under the Companies Act 2013.
- Prepare and submit Service Company application (via ATLAS).
- Develop and submit a business plan aligned to permitted activities.
- Appoint required personnel (Principal Officer and Underwriting Officer).
- Secure office space within Lloyd’s IFSC co-location.
- Complete registration with IFSCA and SEZ authorities, supported by Lloyd’s IFSC.
- Provide supporting documentation (MOA, AOA, capital evidence, bank account details, undertakings).
- Pay applicable application and registration fees (when instructed).
- Obtain final approval and execute Service Company Underwriting Agreement.
Lloyd’s registration process
Initiation
Co-ordinate with Lloyd’s teams to understand country interest, define service company and set timelines.
Register and setup
Managing agents will submit business plans and work with country managers for regional setup according to local regulations. In tandem the service company is registered on Atlas to complete necessary business and company details.
Due diligence
Managing agent’s maturity rating under PBO Principles is used to determine whether an Attestation or Decision Paper is completed, demonstrating satisfactory due diligence has been conducted.
Service Company Underwriting Agreement
Once all registration and set up requirements are met, formal service company underwriting agreement can be signed and service company can start trading on agreed date.