Artha Bharat Investment Managers secured a full Financial Services Permission from Abu Dhabi Global Market’s regulator. The firm shifted two master funds out of GIFT City to the UAE. This move helps the group manage funds and advise professional clients, while avoiding tax friction that currently affects its Indian operations.
Artha Bharat Investment Managers has secured a full Financial Services Permission from Abu Dhabi Global Market’s (ADGM) regulator, giving the GIFT City-based firm a regulated foothold in the UAE to manage funds, run discretionary portfolios and advise professional clients.
The licence, granted to its ADGM entity following an in-principle approval, comes as the group is already moving the master funds of two of its strategies from GIFT City to Abu Dhabi. The shift highlights ongoing friction between India’s tax rules and the ambition to position the International Financial Services Centre as a seamless hub for cross-border capital.
The newly granted ADGM permission allows Artha Bharat to engage more directly with Middle Eastern sovereign wealth funds, family offices and professional non-resident Indian (NRI) investors who prefer managers regulated in an established international financial centre.
The group plans to launch its first vehicle there using an Incorporated Cell Company structure, similar to Singapore’s variable capital companies, allowing multiple separately incorporated funds under one umbrella. These funds are expected to be offered as Exempt Funds through private placements to professional clients, with a relatively accessible minimum subscription.
For resident Indian investors, the ADGM platform is being positioned as a route to global diversification, with potential compounding advantages: gains can remain within the fund and be reinvested without each transaction becoming a taxable event. Tax is crystallised only on distributions or redemptions. Units of an overseas equity-oriented fund held for more than 24 months currently attract long-term capital gains tax at a base rate of 12.5%, plus surcharge and cess.
According to earlier reporting, Artha Bharat is relocating the master structures of the Artha Global Multiplier Fund, which focuses on US consumer themes, and the Artha Bharat Absolute Return Fund.
Under current rules, a GIFT City Category III fund generally qualifies for specified-fund status only if its units, other than those held by the sponsor or manager, are held by non-residents. When one GIFT City vehicle invests in another, the intermediate layer can put the receiving fund’s tax status at risk, even if the ultimate capital comes from overseas investors.
The firm has also sought clearer tax treatment for outbound investment structures so that tax is levied at the investor level in their home jurisdiction rather than creating uncertainty at the fund level in India.
Artha Bharat manages more than $800 million across its platform and continues to run inbound strategies from GIFT City. The ADGM move is limited to certain outbound-oriented master funds; the firm still sees GIFT City as its base for inbound foreign portfolio investment (FPI) products and third-party management services. The broader group also has regulated operations in Mauritius.
The licence forms part of Artha Bharat’s longer-term push towards a multi-jurisdictional platform aimed at significantly scaling assets over the coming years, while giving investors access to Indian and global opportunities through structures they and their advisers may find more straightforward.