Aircraft Leasing in India’s IFSC: A Complete Regulatory Guide to the Trust and Company Services Provider (TCSP) & Special Purpose Vehicle (SPV) Framework

Abstract

India’s International Financial Services Centre (IFSC) at GIFT City, Gandhinagar, has firmly established itself as the country’s primary gateway to global aviation finance.

Table of Contents

Recognising the need for professional, trustworthy intermediaries to underpin the aircraft leasing ecosystem, the IFSCA has introduced — through a 2026 amendment to its principal TechFin and Ancillary Services Regulations — a dedicated regulatory category for Trust and Company Services Providers (TCSPs).

This guide is a comprehensive, step-by-step handbook that explains, in clear and accessible terms, how the TCSP and Special Purpose Vehicle (SPV) framework operates within the IFSC.

It takes the reader through every stage of the journey:

Understanding who TCSPs and SPVs are
How to qualify and register
What ongoing compliance obligations apply
What services can be provided
How enforcement works

The guide draws exclusively from two primary regulatory instruments:

Regulatory Instrument	Description
The IFSCA (TechFin and Ancillary Services) Regulations, 2025	The “Principal Regulations”
The IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026	The “2026 Amendment”, which introduced Chapter VA specifically governing TCSPs

Whether you are an aviation finance professional, a global lessor exploring IFSC operations, a compliance officer, or simply a business owner seeking to understand this space, this guide provides everything you need to know — without needing a law degree to understand it.

The IFSC as a Global Aviation Finance Hub: Setting the Stage

The IFSC is a specially demarcated financial zone within India that operates under a distinct legal and regulatory regime. It functions almost like a separate financial jurisdiction within India — one where foreign currency transactions are freely conducted, global financial practices are adopted, and a modern regulatory framework applies instead of India’s domestic financial laws.

Aviation finance is one of the most capital-intensive and structurally complex segments of global finance. A single commercial aircraft can cost anywhere between USD 50 million and USD 450 million. Airlines worldwide — including many in Asia and the Middle East — prefer to lease rather than own aircraft because it preserves capital, offers flexibility, and provides significant tax efficiencies.

Historically, the world’s major aircraft leasing hubs have been Ireland (Dublin), Hong Kong, and Singapore. The IFSC’s ambition is to claim a significant share of this market. The regulatory framework for TCSPs and SPVs is a deliberate and critical building block in that ambition.

1.1 Why Was a Dedicated TCSP Framework Necessary?

Aircraft leasing in the IFSC does not happen through a single large corporation owning a fleet. Instead, it works through a series of carefully designed corporate structures. Each aircraft — or small group of aircraft — is typically housed in its own dedicated legal entity called a Special Purpose Vehicle (SPV). This SPV holds the aircraft, manages the lease agreement with the airline, and services the financing.

Running an SPV requires continuous professional management:

Maintaining proper legal records
Complying with regulatory requirements
Providing company secretarial services
Managing trustee functions
Ensuring the vehicle operates at arm’s length from its sponsors

These are the services a TCSP provides.

Before the 2026 Amendment, there was no single, clear regulatory category for entities providing these corporate services specifically in the context of aircraft leasing. The Amendment created this clarity, establishing TCSPs as a distinct, formally registered class of service provider under the IFSCA’s oversight.

1.2 The Regulatory Architecture at a Glance

Key Regulatory Instruments:

IFSCA (TechFin and Ancillary Services) Regulations, 2025 — The foundational framework governing all technology and ancillary service providers in the IFSC, including registration, fit and proper requirements, and general compliance obligations.
IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026 — Introduces Chapter VA specifically for Trust and Company Services Providers (TCSPs), defining their role, permitted services, governance standards, and the unique rules governing their relationship with SPVs used for aircraft leasing.

Regulation	Purpose
IFSCA (TechFin and Ancillary Services) Regulations, 2025	Provides the foundational framework for registration, compliance, and governance of ancillary service providers in the IFSC.
IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026	Creates a dedicated regulatory framework for TCSPs and their role in aircraft leasing SPVs.

Understanding the Two Core Players: SPVs and TCSPs

Before diving into the legal details, it is essential to understand what these two structures actually are, what role each plays, and how they interact within the aircraft leasing ecosystem.

2.1 The Special Purpose Vehicle (SPV)

A Special Purpose Vehicle — commonly called an SPV or sometimes a Special Purpose Entity (SPE) — is a separate legal entity created for one specific, limited purpose. In the context of aircraft leasing within the IFSC, that purpose is typically to:

Hold legal ownership or registered interest in one or more aircraft;
Enter into a lease agreement with an airline (the lessee);
Service debt or financing obligations related to the aircraft acquisition; and
Receive and distribute lease rental income to investors or financiers.

The beauty of the SPV structure lies in what it achieves: isolation of risk. If something goes wrong with one particular aircraft — an airline defaults on rent, the plane is damaged — the problem remains legally quarantined within that SPV. The assets and liabilities of the SPV do not automatically flow back to the parent company or investors who set it up.

Plain Language Analogy

Think of an SPV as a separate ring-fenced company set up just to own one apartment. If the tenant stops paying rent and the apartment gets damaged, only that company suffers — not the real estate developer’s entire business empire. Aircraft lessors use the same principle.

An SPV in the IFSC for aircraft leasing is typically incorporated as a company or a Limited Liability Partnership (LLP). The 2026 Amendment gives TCSPs the authority to actually set up these SPVs on behalf of their clients and to manage them on an ongoing basis.

2.2 The Trust and Company Services Provider (TCSP)

A Trust and Company Services Provider, or TCSP, is a professionally managed firm that provides the administrative backbone for aircraft leasing SPVs in the IFSC. The TCSP is registered and regulated by the IFSCA, and it acts as the professional intermediary that ensures each SPV is properly constituted, legally managed, and compliant with applicable regulations.

To use a simple comparison: if an SPV is the aircraft-leasing vehicle, the TCSP is the qualified professional driver — the entity that sets the vehicle up, keeps it running, maintains all the paperwork, and steers it within the lanes of the law.

A TCSP may perform all or any of the following core functions under the Fifth Schedule of the 2026 Amendment:

Service Category	Description
Entity Formation	Acting as the authorised corporate agent to legally incorporate and register trusts, companies, LLPs, or any other body corporate on behalf of clients.
Trustee Services	Acting as — or arranging for a qualified person to act as — a trustee under an express trust, or an equivalent function under any other type of trust arrangement.
Director / Secretary / Nominee Shareholder	Acting as a director, company secretary, or nominee shareholder on behalf of a company, providing the required human presence in the corporate governance structure.
Partner / Designated Partner	Acting as a partner or designated partner in a limited liability partnership, fulfilling the statutory roles under applicable law.
Registered Office & Address Services	Providing the SPV with a formal registered office address, business address, correspondence address, or administrative address, as permitted by applicable law.
Other Authority-Approved Services	Any additional services that the IFSCA may specifically permit TCSPs to provide for leasing activities from time to time.

Key Differences Between SPVs and TCSPs

Aspect	SPV	TCSP
Primary Role	Owns and leases aircraft	Administers and manages SPVs
Legal Status	Separate legal entity	Registered service provider
Main Function	Asset holding and leasing	Corporate, governance, and compliance support
Regulatory Position	Vehicle used for leasing transactions	Regulated by IFSCA under the TCSP framework
Risk Isolation	Ring-fences aircraft-related risks	Ensures proper administration and compliance

Who Can Become a TCSP? Eligibility Requirements

Not every entity can simply declare itself a TCSP and start providing services. The regulatory framework establishes clear eligibility criteria that must be met before registration can even be applied for. These entry requirements exist to ensure that only genuine, well-governed, and financially sound entities enter this space.

3.1 Legal Form of the Applicant

The 2026 Amendment (Regulation 10C) specifies that a TCSP applicant must be:

A company incorporated within the IFSC; or
A Limited Liability Partnership (LLP) incorporated within the IFSC; or
Any other legal form specifically permitted by the IFSCA.

Important Distinction from the General Framework

Under the Principal Regulations (Regulation 5), a general TechFin or Ancillary Service Provider applicant can also be a branch of a company or LLP incorporated outside the IFSC. However, for TCSPs specifically, the 2026 Amendment is more restrictive — only entities incorporated within the IFSC are eligible. There is no branch office option for TCSP applicants.

This distinction underscores the IFSCA’s expectation that TCSPs — given the sensitive nature of their role in managing legal entities and trustee functions — must have a genuine and substantive presence within the IFSC itself, rather than being merely an extension of a parent entity based elsewhere.

Eligible Legal Forms at a Glance

Entity Type	Eligible as TCSP Applicant?	Remarks
Company incorporated within IFSC	Yes	Explicitly permitted under Regulation 10C
LLP incorporated within IFSC	Yes	Explicitly permitted under Regulation 10C
Other legal form permitted by IFSCA	Yes	Subject to IFSCA approval
Branch of company incorporated outside IFSC	No	Not permitted for TCSP registration
Branch of LLP incorporated outside IFSC	No	Not permitted for TCSP registration

3.2 FATF Compliance: The Geographic Integrity Requirement

All promoters and partners of the applicant entity must be from jurisdictions that are not listed in the Financial Action Task Force’s (FATF) public statement as “High-Risk Jurisdictions subject to call for action.”

The FATF is an inter-governmental body that monitors global financial systems for money laundering and terrorist financing risks. Countries on its “call for action” list — sometimes called the “black list” — are jurisdictions with serious strategic deficiencies in their anti-money laundering (AML) regimes.

The practical implication is straightforward: a TCSP cannot have promoters or partners who come from, or are associated with, any FATF-blacklisted jurisdiction. This same requirement extends — through the Code of Conduct under the Fourth Schedule — to significant beneficial owners of the TCSP’s business.

Key FATF Compliance Requirements

Promoters must not belong to FATF-blacklisted jurisdictions.
Partners must not belong to FATF-blacklisted jurisdictions.
Significant beneficial owners must comply with FATF-related requirements under the Fourth Schedule.
Compliance must be maintained on an ongoing basis, not only at the time of registration.

Ongoing Obligation

If, after registration, any promoter’s or significant beneficial owner’s home jurisdiction is subsequently added to the FATF ‘call for action’ list, the TCSP must notify the IFSCA within 10 business days of that FATF publication. Failure to do so is a compliance breach.

3.3 The Arm’s Length Declaration

As part of the registration application for TCSP services, the applicant must submit a formal written declaration committing to maintaining an arm’s length relationship between its TCSP activities and any other services it may provide.

This means that the TCSP’s role in managing or administering SPVs must be kept strictly separate and independent from any other commercial interests the entity may have. This prevents conflicts of interest and ensures that the TCSP’s professional duties to the SPV are not compromised by other business relationships.

Purpose of the Arm’s Length Requirement

Prevents conflicts of interest.
Protects the independence of TCSP activities.
Ensures objective administration of SPVs.
Supports regulatory transparency and governance standards.

3.4 Requirement for Separate Approval for Existing TechFin/Ancillary Service Providers

An entity that is already registered as a TechFin and Ancillary Service Provider under the Principal Regulations cannot automatically extend its activities to include TCSP services. It must apply for and receive a separate, additional approval from the IFSCA specifically for TCSP activities.

This is not merely an administrative formality. It reflects the IFSCA’s view that TCSP services — particularly those involving trustee functions, nominee directorships, and corporate formation — carry distinct risks and responsibilities that warrant dedicated regulatory oversight, separate from general technology and ancillary services.

Why Separate Approval Is Required

Aspect	Reason for Separate Approval
Trustee Functions	Require enhanced regulatory oversight
Nominee Directorship Services	Carry governance and compliance risks
Corporate Formation Activities	Involve legal and fiduciary responsibilities
SPV Administration	Requires specialized compliance controls
Regulatory Monitoring	Ensures dedicated supervision by IFSCA

The Registration Process: Step-by-Step

The process for obtaining a Certificate of Registration as a TCSP is governed by Regulation 6 of the Principal Regulations (applied to TCSPs through Regulation 10B of the 2026 Amendment). It is a structured, sequential process designed to be transparent and predictable.

Step	What Happens
Step 1: Prepare and Apply	The applicant submits an application through the IFSCA’s designated online portal — the Single Window IT System (SWIT). The application must include all required corporate documents, the TCSP-specific arm’s length declaration, and the applicable application fees.
Step 2: Deficiency Notice (if any)	After reviewing the application, if the IFSCA finds any gaps, errors, or missing information, it will issue a formal communication to the applicant identifying those deficiencies. The applicant then has 30 days from the date of that communication to rectify and resubmit.
Step 3: Right to be Heard	If the IFSCA is considering rejecting the application, it cannot do so without first giving the applicant a reasonable opportunity to present their case in writing. No application may be rejected without this step.
Step 4: In-Principle Approval	If the IFSCA is broadly satisfied, it issues an In-Principle Approval. This is a conditional green light — it confirms that the application is acceptable in principle, subject to specified conditions being fulfilled.
Step 5: Fulfil Conditions (180 Days)	From the date of In-Principle Approval, the applicant has 180 days (approximately 6 months) to complete all required steps: setting up infrastructure, hiring key personnel, establishing internal systems, etc. The IFSCA may extend this deadline in appropriate cases.
Step 6: Certificate of Registration	Once the IFSCA is satisfied that all In-Principle Approval conditions have been met, it issues the formal Certificate of Registration. This certificate is the official licence to operate as a TCSP in the IFSC.
Step 7: Validity and Continuity	The Certificate of Registration remains valid indefinitely — it does not expire. It continues unless: the IFSCA suspends or cancels it due to non-compliance; or the TCSP voluntarily surrenders it with IFSCA’s acceptance.

4.1 Material Changes: The Ongoing Notification Duty

Once registered, a TCSP must immediately notify the IFSCA of any material changes that affect its Certificate of Registration.

This includes changes to:

Ownership structure or promoters;
Key personnel (principal officer, compliance officer, directors);
Business address or registered office;
Nature or scope of services being provided; or
Any other significant change in previously submitted information.

The obligation to notify is immediate — there is no grace period. Delays in reporting material changes are treated as compliance failures.

The “Fit and Proper” Standard: Who Can Run a TCSP?

One of the most important recurring requirements in the IFSCA framework is the “Fit and Proper” standard. This is not a one-time check — it is a permanent, ongoing obligation for every TCSP.

At all times, the entity itself and the following individuals associated with it must be “fit and proper” persons:

The TCSP entity as a whole;
The Principal Officer;
The Compliance Officer;
All directors, partners, and designated partners; and
Controlling shareholders.

5.1 What Does “Fit and Proper” Mean?

The framework defines “fit and proper” across two dimensions: the positive qualities a person must demonstrate, and the disqualifications that automatically make someone ineligible.

5.1.1 Positive Requirements

A person is fit and proper if they have a demonstrated record of:

Financial integrity — meaning they have always honoured financial obligations and never manipulated financial information;
Good reputation and character — meaning they are regarded as reliable, ethical, and trustworthy in their professional dealings; and
Honesty — meaning transparency in their conduct and dealings.

5.1.2 Disqualifying Conditions

A person is automatically disqualified from being treated as fit and proper if any of the following applies:

Disqualification	Details
Criminal Conviction	Convicted by a court of law in the last 5 years for moral turpitude, economic offences, or offences under the IFSCA Act or related scheduled Acts.
Pending Charge Sheet	A charge sheet has been filed by any Indian or foreign enforcement agency for an economic offence and the case is still pending.
Charges Framed	A court or equivalent statutory body has formally framed charges in matters related to economic offences.
Recovery Proceedings	A statutory body or financial regulator has initiated recovery proceedings against the person, and they remain pending.
Order for Malfeasance	An official order has been passed against the person finding them guilty of malfeasance (deliberate wrongdoing).
Undischarged Insolvent	The person has been declared bankrupt and has not yet been formally discharged from insolvency.
Market Debarment Order	A regulatory authority has passed an order restricting or prohibiting the person from accessing, providing, or dealing in financial products or services, and that order is currently in force.
Other Regulatory Orders	Any other order with a material bearing on the financial services market, passed by the IFSCA or any regulator, within the last 3 years.
Unsound Mind	A competent court has found the person to be of unsound mind and that finding is still in force.
Wilful Defaulter	The person has been categorised as a wilful defaulter under banking norms.
Fugitive Economic Offender	The person has been declared a Fugitive Economic Offender under the relevant Indian legislation.
Other IFSCA Disqualifications	Any other disqualification as may be specified by the Authority from time to time.

Regulatory Consequences of “Not Fit and Proper” Status

Where a person has been formally declared ‘not fit and proper’ by a regulatory authority, that person cannot apply for any registration under the framework until they demonstrably satisfy the fit and proper requirements again. This bar applies to all registrations — not just TCSP registration.

Key Personnel: The Principal Officer and Compliance Officer

Every TCSP must have two designated individuals in place at all times: a Principal Officer and a Compliance Officer. These two roles are the human faces of the TCSP’s accountability to the IFSCA, and both must be based physically within the IFSC.

6.1 The Principal Officer

The Principal Officer is responsible for the overall conduct and direction of the TCSP’s business activities. They are the person ultimately accountable for how the TCSP operates on a day-to-day basis.

Educational and professional requirements for the Principal Officer:

Must hold a professional or postgraduate qualification in finance, law, commerce, or a related field; and
Must additionally have at least five years of post-qualification experience in financial services activities.

Requirement	Details
Educational Qualification	Professional or postgraduate qualification in finance, law, commerce, or a related field
Experience	At least five years of post-qualification experience in financial services activities

In the specific case of a TechFin and Ancillary Service Provider that provides services exclusively to its group entities based in the IFSC, the Principal Regulations allow the appointment of a Principal Officer to be optional — subject to prior IFSCA approval. However, for TCSPs handling third-party SPVs in the aircraft leasing context, the general expectation is that a Principal Officer will be appointed.

6.2 The Compliance Officer

The Compliance Officer is responsible for ensuring the TCSP adheres to all policies, procedures, record-keeping obligations, and regulatory requirements. They report directly to the Board of Directors or the head of the organisation — whichever is applicable.

Educational and professional requirements for the Compliance Officer:

Must hold a professional or postgraduate qualification in finance, law, commerce, or a related field.

Requirement	Details
Educational Qualification	Professional or postgraduate qualification in finance, law, commerce, or a related field

Practical Note: If a Compliance Officer is already appointed under any other applicable law or regulation (for instance, under a banking or securities regulation), that same person can be re-designated as the Compliance Officer for the TCSP business — provided they meet the minimum educational qualifications specified above. This avoids the need for a separate appointment and allows entities to make efficient use of existing compliance infrastructure.

6.3 Common Requirements for Both Officers

Both the Principal Officer and the Compliance Officer must satisfy the following requirements:

Both the Principal Officer and the Compliance Officer must be full-time employees of the TCSP — not consultants, advisors, or part-time personnel.
Both must be physically based at the IFSC — not remotely managing operations from elsewhere in India or abroad.
Both must meet the fit and proper standards described in Section 5 of this guide at all times.

Governance, Internal Controls, and Record-Keeping

The 2026 Amendment imposes detailed governance and internal control obligations on TCSPs, reflecting the significance of their role as professional administrators of legal entities. These are not optional best practices — they are mandatory regulatory requirements.

7.1 The Governing Body

Every TCSP must have a formal Governing Body in place (such as a Board of Directors or equivalent). This governing body must formulate a governance framework that is appropriate for the TCSP’s size, the nature of its activities, the complexity of its operations, and its overall risk profile.

In practical terms, this means TCSPs cannot be informally managed. There must be documented governance policies, formal decision-making structures, and clear lines of authority and accountability.

7.2 Internal Audit and Independent Review

Each TCSP must establish a formal internal audit mechanism or an independent review process, again scaled to match its operational complexity and risk profile.

The primary purpose of this mechanism is to regularly assess:

Whether the governance and internal control framework is adequate for the business;
Whether the AML (Anti-Money Laundering), CFT (Countering the Financing of Terrorism), and KYC (Know Your Customer) procedures are working effectively;
Whether client and entity records are accurate and complete; and
Whether the TCSP is operating within the scope of its regulatory approvals and service permissions.

Special Audits: The IFSCA reserves the power to appoint an external auditor to conduct special audits of any class of TCSP entities where the risk profile warrants such an intervention. This is an extraordinary supervisory tool that the Authority may invoke independently, without the TCSP’s prior request.

7.3 Record-Keeping: What Must Be Maintained

TCSPs must maintain accurate, up-to-date records for every SPV or legal arrangement they administer. These records may be kept in physical or electronic form, but must cover the following:

Details of each legal person or legal arrangement being managed;
Names and details of directors, trustees, protectors, partners, and nominee shareholders;
Trust deeds, constitutional documents (such as memoranda and articles of association), shareholders’ agreements, and similar legal instruments where the TCSP is involved; and
Details of the services provided, the service agreements entered into, and the duration of each client engagement.

Records to Be Maintained	Description
Legal Entity Details	Details of each legal person or legal arrangement being managed
Key Personnel Information	Names and details of directors, trustees, protectors, partners, and nominee shareholders
Legal Documents	Trust deeds, constitutional documents, shareholders’ agreements, and similar instruments
Service Records	Services provided, service agreements, and duration of client engagements

7.3.1 Record Retention and Access Rules

All records must be readily accessible for inspection by the IFSCA or any government authority at any time.
Records must be retained for a minimum of five years after the client relationship has ended — or for any longer period specified by applicable law or regulations.
Records must be protected through appropriate data security and confidentiality measures to prevent unauthorised access or disclosure.

7.4 Segregation of Duties

The 2026 Amendment introduces a specific requirement for segregation of duties within the TCSP. The regulatory objective is to ensure that no single individual or function within the TCSP has end-to-end control over all of the following simultaneously:

Client acceptance (deciding who to take on as a client);
Service delivery (actually providing the services to the client);
Transaction execution (processing financial or legal transactions on behalf of the SPV); and
Compliance monitoring (checking that all of the above is being done correctly).

Function	Description
Client Acceptance	Deciding who to take on as a client
Service Delivery	Actually providing the services to the client
Transaction Execution	Processing financial or legal transactions on behalf of the SPV
Compliance Monitoring	Checking that all activities are being conducted correctly

This requirement reflects a fundamental principle of internal control: that checks and balances prevent fraud, errors, and conflicts of interest. TCSPs must establish written internal policies, documented procedures, and system-based controls to enforce this segregation.

7.5 The TCSP Business Line Must Be Distinct

The TCSP function for aircraft leasing activities must be run as a clearly distinct line of business within the entity.

This means:

It must have its own dedicated resources (staff, systems, and infrastructure);
It must have appropriate governance arrangements, policies, and controls specific to the TCSP function; and
It must be supported by key personnel who are specifically designated for the TCSP role.

This requirement reinforces the arm’s length declaration made at registration. The TCSP function cannot be conflated with, or diluted by, other service lines within the same organisation.

Who Can a TCSP Serve? Eligible Service Recipients and the SPV Rule

One of the most commercially important and carefully designed provisions of the 2026 Amendment concerns who a TCSP is permitted to serve. The framework carefully balances the IFSC’s international-facing mandate with the practical realities of Indian business participation in aircraft leasing structures.

8.1 The General Rule: Non-Residents Only

As a general principle, a TCSP may only provide services to a Service Recipient who satisfies both of the following conditions:

The Service Recipient must be a non-resident — meaning a person or entity resident outside India as defined under the Foreign Exchange Management Act, 1999 (FEMA); and
The Service Recipient must not be from a jurisdiction identified by the FATF as a “High-Risk Jurisdiction Subject to Call for Action.”

This rule reflects the fundamental character of the IFSC as an international financial zone. Its services are designed primarily for global participants — foreign airlines, international lessors, offshore investors, and foreign-resident entities — not for India’s domestic market.

Key Eligibility Conditions for Service Recipients

Requirement	Description
Non-Resident Status	Must be resident outside India under FEMA.
FATF Compliance	Must not belong to a FATF-listed High-Risk Jurisdiction subject to call for action.

8.2 The Critical Exception: The SPV Rule for Aircraft Leasing

The most commercially significant provision in Regulation 10H is an important exception to the general non-resident rule. It is designed specifically to accommodate the practical reality of how aircraft leasing structures are built in the Indian context.

The Rule

A TCSP may provide services listed in the Fifth Schedule to a Special Purpose Vehicle (SPV) located within the IFSC — even if that SPV’s services are being undertaken at the request of, or for the benefit of, a person who is resident in India — provided that the SPV itself is the primary service recipient.

What this means in practice is that an Indian airline, investor, or business group (all of whom are Indian residents) can sponsor, initiate, or finance an aircraft leasing SPV in the IFSC. The TCSP can then administer that SPV. The Indian resident does not need to be treated as the TCSP’s client.

Practical Impact of the SPV Rule

Party	Role	Relationship with TCSP
Indian Airline / Investor / Business Group	Sponsors, initiates, or finances the SPV	Not treated as the TCSP’s client
IFSC-Based SPV	Primary service recipient	Direct client of the TCSP
TCSP	Provides services under the Fifth Schedule	Administers and serves the SPV

8.3 The Legal Firewall: How Duties Are Allocated

The 2026 Amendment provides a precise legal explanation of this arrangement that protects all parties:

The Explanation (Regulation 10H): Any person resident in India who sponsors, originates, or finances a special purpose vehicle shall not be considered as a service recipient of the Trust and Company Services Provider merely by reason of such association. The Trust and Company Services Provider shall render its contractual and fiduciary obligations only towards the special purpose vehicle based in IFSC in accordance with the applicable service agreements.

This creates an important legal firewall. The TCSP’s professional and legal duties — including its fiduciary obligations (the duty of loyalty and care) — run exclusively to the IFSC-based SPV, not to the Indian sponsor behind it. The Indian sponsor’s role in bringing the structure into existence does not make them a party to the TCSP’s service obligations.

This distinction matters enormously for:

Regulatory clarity — the IFSCA knows exactly who the TCSP is accountable to;
Legal risk management — the TCSP’s liability is clearly defined; and
Investor protection — foreign co-investors in the SPV are assured that the TCSP serves the SPV’s interests, not those of any single sponsor.

Operational Requirements: Currency, Insurance, and Conflict of Interest

9.1 Currency of Operations

TCSPs must conduct their primary business operations in a specified foreign currency — the currencies listed in the First Schedule to the IFSCA (Banking) Regulations, 2020. These are the major international currencies (such as USD, EUR, GBP, JPY, etc.) in which global aviation transactions are denominated.

TCSPs may, however, open an Indian Rupee (INR) account for a limited set of purposes:

To meet administrative and statutory expenses (such as rent, salaries, local taxes); and
For any other specific purposes permitted under applicable Indian laws.

Every TCSP must also maintain its balance sheet in one of the specified foreign currencies, keeping its core financial records aligned with international standards.

Currency Compliance Summary

Requirement	Details
Primary Operations	Specified foreign currency
Balance Sheet	Maintained in a specified foreign currency
INR Account Usage	Administrative, statutory, and legally permitted purposes

9.2 Financial Reporting in USD

All financial reporting submitted by a TCSP to the IFSCA must be denominated in US Dollars (USD), unless the IFSCA specifically directs otherwise. This standardises reporting across the IFSC and enables the Authority to compare and monitor entities on a consistent basis.

9.3 Professional Indemnity Insurance

Every TCSP must maintain professional indemnity insurance coverage at all times. This is not a discretionary decision — it is a mandatory regulatory obligation.

The level of coverage must be commensurate with:

The scale of the TCSP’s business (how many SPVs it manages, the total value of assets involved); and
The risk profile of its operations (complexity of structures, jurisdictions involved, types of services provided).

Professional indemnity insurance protects the TCSP — and by extension its clients — against claims arising from:

Negligence in professional duties;
Errors or omissions in service delivery;
Breach of duty (including fiduciary duty).

Why This Matters

In aircraft leasing, where a single structuring error could expose an airline or investor to millions of dollars in losses, professional indemnity insurance is not merely regulatory compliance — it is fundamental risk management. The regulation ensures TCSPs carry skin in the game.

9.4 Conflict of Interest Management

Every TCSP must maintain a documented conflict management policy. The obligation has two components:

Identification — the TCSP must proactively identify conflicts of interest that arise in the ordinary course of its business; and
Disclosure — where appropriate, those conflicts must be disclosed to relevant parties.

Common conflict scenarios in TCSP operations include situations where the same TCSP manages SPVs that belong to competing airline lessors, or where the TCSP has a commercial interest in entities that transact with the SPVs it administers. The conflict management policy must address how such situations are identified, managed, and escalated.

Code of Conduct: The Ongoing Behavioural Framework

The Fourth Schedule to the Principal Regulations sets out the Code of Conduct applicable to all TechFin and Ancillary Service Providers, including TCSPs. These are positive obligations — things the TCSP must actively do, not merely avoid.

Code of Conduct Obligations

Code of Conduct Obligation	What It Requires in Practice
Regulatory Compliance	Ensure full compliance at all times with all rules issued by the Central Government, IFSCA regulations, guidelines, circulars, and directions from any concerned regulatory authority.
Material Change Notification	Immediately inform the IFSCA of any material change in previously furnished information that has a bearing on the Certificate of Registration.
FATF Notification (10 Business Days)	If any promoter’s or significant beneficial owner’s home jurisdiction is added to the FATF “call for action” list, notify the IFSCA within 10 business days of the FATF’s publication date.
Adequate Manpower and Infrastructure	Deploy adequate staffing and physical infrastructure within the IFSC, proportionate to the scale and complexity of TCSP business operations.
Separate Registration for Regulated Activities	If the TCSP wishes to undertake any activity that is regulated under a specific IFSCA regulation or framework (other than as a TCSP), it must seek a separate registration or authorisation for that activity.

Reporting, Information, and Inspection Powers

11.1 Periodic Reporting

TCSPs must furnish information relating to their operations to the IFSCA in the manner, at the intervals, and in the format that the IFSCA prescribes from time to time. The IFSCA has the authority to specify reporting templates, submission timelines, and the level of detail required.

Financial reports submitted to the IFSCA must be in US Dollars unless otherwise directed. Operational reports may cover aspects such as the number of SPVs administered, value of assets under administration, compliance summaries, and key personnel changes.

Key Reporting Requirements

Reporting Area	Requirement
Reporting Format	As prescribed by the IFSCA from time to time
Submission Timelines	As specified by the IFSCA
Financial Reporting Currency	US Dollars, unless otherwise directed
Operational Reporting	May include SPVs administered, assets under administration, compliance summaries, and key personnel changes

11.2 The IFSCA’s Power to Call for Information

Beyond periodic reporting, the IFSCA may at any time require a TCSP to produce any information, documents, or records it deems relevant. Upon receiving such a request, the TCSP is obliged to submit the requested materials within the timeframe specified by the Authority. There is no option to decline such a request.

Information Request Obligations

The IFSCA may request information at any time.
The request may cover documents, records, or operational information.
The TCSP must comply within the specified timeframe.
Non-compliance is not permitted.

11.3 Inspection Authority

The IFSCA has the power to appoint one or more Inspecting Authorities — individuals designated to physically inspect and examine a TCSP’s operations.

An inspection may be initiated:

Suo motu — on the IFSCA’s own initiative, without any external complaint; or
Upon receipt of information or a complaint — triggered by information that raises concerns about a TCSP’s operations.

The scope of an inspection is broad. Inspecting Authorities may examine:

Books of accounts;
Legal records and documents;
Physical infrastructure and systems;
Operational procedures and processes; and
Any other aspect of the TCSP’s business that the Inspecting Authority considers relevant.

Inspection Scope Overview

Area of Inspection	Examples
Financial Records	Books of accounts
Legal Documentation	Contracts, legal records, and supporting documents
Infrastructure	Physical facilities, systems, and technology infrastructure
Operations	Business processes and operational procedures
Other Relevant Matters	Any aspect considered relevant by the Inspecting Authority

Enforcement: What Happens When Rules Are Broken

The IFSCA’s regulatory framework is not merely aspirational — it is enforceable. Both the Principal Regulations and the 2026 Amendment contain clear provisions for enforcement action in cases of non-compliance.

12.1 Triggers for Enforcement

Enforcement action may be initiated against a TCSP if it contravenes:

Any provision of the Principal Regulations (2025);
Any provision of the 2026 Amendment (Chapter VA);
Any guideline, circular, or direction issued by the IFSCA under either instrument.

12.2 Range of Enforcement Actions

The 2026 Amendment specifies that enforcement action may include, but is not limited to:

Suspension of the Certificate of Registration — a temporary halt to the TCSP’s authority to operate; or
Cancellation of the Certificate of Registration — a permanent revocation of the TCSP’s operating licence.

Beyond these, the IFSCA Act itself provides a broader range of enforcement tools, including financial penalties, public censure, and referral to other law enforcement agencies where criminal conduct is suspected.

Enforcement Actions Summary

Enforcement Measure	Description
Suspension of Registration	Temporary halt to operations
Cancellation of Registration	Permanent revocation of operating licence
Financial Penalties	Monetary sanctions under the IFSCA Act
Public Censure	Formal regulatory reprimand
Law Enforcement Referral	Referral where criminal conduct is suspected

12.3 The Right to Be Heard

No enforcement action may be taken without first giving the TCSP a reasonable opportunity to be heard. This is a fundamental principle of natural justice that the regulations expressly preserve. The procedure requires the TCSP to be informed of the proposed action and given the chance to submit a written response presenting its case.

This procedural safeguard is important: it ensures that enforcement does not happen arbitrarily or without due process. Even in clear cases of breach, the IFSCA is bound to follow this process before taking action.

12.4 Power to Relax Strict Enforcement

The framework also includes a provision allowing the IFSCA — in the interest of developing the financial services market — to relax the strict enforcement of any regulatory requirement, for reasons recorded in writing.

An entity seeking such relaxation must:

File an application with the IFSCA setting out the details and grounds for the relaxation sought;
Pay a non-refundable fee as specified by the IFSCA; and
Respond to any clarifications sought by the IFSCA within the application process.

The IFSCA must process such an application within 30 days of receiving it (complete in all respects) and must record in writing whether the relaxation is granted or refused, with reasons.

Relaxation Application Process

Step	Requirement
1	Submit application detailing the relaxation sought
2	Pay the prescribed non-refundable fee
3	Provide clarifications if requested by the IFSCA
4	Await decision within 30 days of complete submission

Transitional Provisions: What Happens to Existing Entities

The Principal Regulations made specific provisions for entities that were already operating in the IFSC under earlier circulars — specifically entities authorised under the Framework for Ancillary Services (Circular dated February 10, 2021) and the Framework for FinTech Entities (Circular dated April 27, 2022).

13.1 The 12-Month Registration Window

Existing authorised ancillary service providers and TechFin entities were required to obtain a Certificate of Registration under the Principal Regulations within 12 months of the regulations coming into force.

Where an entity was unable to do so within 12 months, the Chairperson of the IFSCA could grant an extension — but not beyond 24 months from the commencement date.

Registration Deadlines

Entity Type	Registration Requirement
Existing Ancillary Service Providers	Registration within 12 months
Existing TechFin Entities	Registration within 12 months
Extended Timeline	Up to 24 months with Chairperson’s approval

13.2 Continuation Under Previous Framework

Until such time as an existing entity obtained its new Certificate of Registration (or until the 12-month window expired, whichever came first), it continued to be governed by the earlier regulatory framework under which it was authorised. The transition was designed to be seamless, with no regulatory gap.

13.3 Repeal of Earlier Circulars

The two earlier circulars — the Ancillary Services Framework (2021) and the relevant portions of the FinTech Framework (2022) — are repealed 24 months after the commencement of the Principal Regulations.

However, any rights, liabilities, penalties, or proceedings accrued under those circulars before their repeal remain fully valid and enforceable, as if the circulars had never been repealed.

Impact of Repeal

Earlier circulars are repealed after 24 months.
Existing rights remain protected.
Existing liabilities continue to apply.
Previously imposed penalties remain enforceable.
Ongoing proceedings continue unaffected by the repeal.

Strategic Insights for Entities Entering the TCSP Space

Understanding the regulatory framework is only one part of the picture. For entities seriously considering entering the TCSP business in the IFSC for aircraft leasing, the following strategic observations—derived from a careful reading of the regulations—are worth considering.

14.1 Structuring the Entity Correctly from the Start

Given that only companies or LLPs incorporated within the IFSC can register as TCSPs (unlike the broader framework which also admits branches of foreign entities), promoters must make a deliberate structural decision early. Incorporating within the IFSC from the outset—rather than establishing a branch of an overseas entity—is essential.

14.2 Building the Right Team Before Applying

The fit and proper requirements, the professional qualifications mandated for the Principal Officer (postgraduate qualification plus five years of financial services experience), and the requirement for full-time IFSC-based personnel mean that entities must have their team largely in place before applying for registration.

The 180-day In-Principle Approval window can be used to hire and train staff, but core leadership should be identified at the application stage.

14.3 Arm’s Length Is Not Merely Administrative

The arm’s length declaration is a substantive business design requirement, not just a piece of paperwork. TCSPs must structurally and operationally separate their TCSP function from any other business they conduct.

Entities that plan to both originate aircraft leasing deals and administer the resulting SPVs through their TCSP arm must be particularly careful about how they design these separations.

14.4 The Professional Indemnity Requirement Should Be Calibrated Carefully

The regulations require insurance commensurate with scale and risk profile, but do not specify a minimum coverage amount.

Entities should conduct a thorough risk assessment before determining appropriate coverage levels. Key factors include:

Total value of aircraft assets under administration
Jurisdictions involved in transactions and structures
Complexity of trust and corporate arrangements being managed
Nature and scale of fiduciary responsibilities

Over-insurance wastes resources; under-insurance creates existential regulatory risk.

14.5 Leverage the Power to Remove Difficulties

The IFSCA has the express power to issue guidance notes, circulars, and directions to remove difficulties in the interpretation or application of the regulations.

Entities that encounter genuine ambiguity in how a particular regulation applies to their specific business model should not guess. They should engage with the IFSCA proactively through the appropriate channels to seek clarification.

Quick Reference Compliance Checklist for TCSPs

The following checklist summarises the key compliance obligations of a registered TCSP. It is intended as a practical reference tool, not a substitute for legal advice.

At the Point of Registration

Requirement	Status
Entity incorporated as company or LLP within the IFSC	☐ Required
All promoters/partners from non-FATF-blacklisted jurisdictions	☐ Required
Arm’s length declaration submitted with application	☐ Required
Application submitted via SWIT portal with all documents and fees	☐ Required
Principal Officer identified (postgraduate + 5 years experience)	☐ Required
Compliance Officer identified (postgraduate qualification)	☐ Required
Separate approval obtained if applicant is existing TechFin/ASP	☐ Required

Within 180 Days of In-Principle Approval

Requirement	Status
Principal Officer and Compliance Officer hired full-time and based in IFSC	☐ Required
Physical office and infrastructure established in IFSC	☐ Required
Professional indemnity insurance policy obtained	☐ Required
Governance framework and internal policies documented	☐ Required
Record-keeping systems established	☐ Required
Segregation of duties controls implemented	☐ Required
Conflict of interest policy documented	☐ Required
Internal audit mechanism established	☐ Required
Foreign currency bank account opened for operations	☐ Required
INR account opened for administrative expenses (optional but common)	☐ Optional

On an Ongoing Basis

Requirement	Frequency
Submit operational and financial reports to IFSCA (in USD)	As specified by IFSCA
Maintain client and entity records accurately	Continuous
Monitor fit and proper status of all key persons	Continuous
Notify IFSCA of any material changes immediately	Immediate
Check FATF statements; notify IFSCA within 10 business days if affected	Upon each FATF publication
Maintain and update conflict of interest register	Ongoing
Review and update professional indemnity insurance	Annual (or as business grows)
Conduct internal audits / independent reviews	Periodically, per risk profile
Retain client records for 5 years post-relationship cessation	Minimum 5 years
Pay annual fees as specified by IFSCA	Annual

Key Takeaways for TCSP Applicants

Incorporate a company or LLP within the IFSC before seeking TCSP registration.
Identify qualified leadership and compliance personnel early in the process.
Maintain strict arm’s length separation between TCSP activities and other business functions.
Assess professional indemnity insurance requirements based on actual business risk exposure.
Establish governance, compliance, audit, and record-keeping systems before commencing operations.
Engage proactively with the IFSCA whenever regulatory interpretation issues arise.
Monitor ongoing reporting, FATF-related obligations, and annual compliance requirements continuously.

Conclusion

The introduction of the TCSP framework through the 2026 Amendment to the IFSCA (TechFin and Ancillary Services) Regulations represents a significant and carefully calibrated regulatory development. It fills a critical gap in the IFSC’s aviation finance architecture by providing a formally regulated, professionally accountable class of service provider to administer the SPVs that form the building blocks of aircraft leasing transactions.

The framework is neither lax nor unnecessarily burdensome. It demands genuine substance, including qualified personnel, physical presence, robust governance, adequate insurance, rigorous record-keeping, and proactive compliance. At the same time, it offers clear procedural protections and reasonable pathways for engagement with the regulator.

Importance of the SPV Service Recipient Rule

Perhaps most importantly, the SPV service recipient rule is a commercially astute provision that removes an otherwise significant structural obstacle. By clarifying that Indian sponsors of IFSC-based aircraft leasing SPVs are not treated as the TCSP’s service recipients, the regulation enables Indian-backed leasing structures to utilise IFSC-based TCSPs without triggering the non-resident requirement. The TCSP’s duties run to the SPV — where they belong.

Opportunities for Market Participants

For entities seeking to establish themselves in this space, the message from the regulatory framework is clear: commit to building a genuine, well-governed, professionally staffed operation within the IFSC, and the regulatory architecture will support your growth as part of India’s ambition to become a serious contender in the global aircraft leasing market.

List of Key Regulatory Instruments Referenced

The following regulatory instruments and legal frameworks have been referenced throughout this guide:

Regulatory Instrument	Description
International Financial Services Centres Authority Act, 2019 (Act No. 50 of 2019)	Primary legislation governing the International Financial Services Centres Authority (IFSCA).
IFSCA (TechFin and Ancillary Services) Regulations, 2025	Notified vide Gazette Notification No. 493, dated July 10, 2025 [IFSCA/GN/2025/005].
IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026	Notified vide Gazette Notification No. 307, dated May 7, 2026 [IFSCA/GN/2026/008].
IFSCA (Banking) Regulations, 2020	Includes the First Schedule specifying foreign currencies.
Foreign Exchange Management Act, 1999 (42 of 1999)	Provides statutory definitions of Resident and Non-Resident.
Financial Action Task Force (FATF) Public Statements	Identifies high-risk jurisdictions subject to a call for action.

Regulatory Reference Summary

International Financial Services Centres Authority Act, 2019 (Act No. 50 of 2019)
IFSCA (TechFin and Ancillary Services) Regulations, 2025
IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026
IFSCA (Banking) Regulations, 2020
Foreign Exchange Management Act, 1999 (42 of 1999)
Financial Action Task Force (FATF) Public Statements

Guide Basis and Regulatory Context

This guide is based on the IFSCA (TechFin and Ancillary Services) Regulations, 2025 as amended by the IFSCA (TechFin and Ancillary Services) (Amendment) Regulations, 2026.

Key Takeaways: Aircraft Leasing in India’s IFSC – TCSP & SPV Framework

This guide explains the new regulatory framework introduced by the 2026 IFSCA amendment for Trust and Company Services Providers (TCSPs) and Special Purpose Vehicles (SPVs) involved in aircraft leasing at GIFT City IFSC.

Quick Overview

Topic	Key Focus
SPV	Aircraft ownership and leasing vehicle
TCSP	Administration, governance, and compliance support
Registration	IFSCA approval and ongoing compliance
SPV Rule	Allows Indian-sponsored IFSC SPVs to be served by TCSPs
Oversight	IFSCA inspections, reporting, and enforcement powers

1. Why the Framework Matters

India wants GIFT City IFSC to become a major global aircraft leasing hub alongside leasing centers like Dublin, Hong Kong and Singapore.
Aircraft leasing transactions are usually structured through SPVs.
TCSPs provide the professional management, governance, compliance, and administrative support needed for these SPVs.

2. What Is an SPV?

A Special Purpose Vehicle (SPV):

Is a separate legal entity created for a specific aircraft leasing transaction.
Owns aircraft, enters lease agreements, receives lease rentals, and services financing obligations.
Ring-fences risk so problems relating to one aircraft do not affect other assets or entities.

3. What Is a TCSP?

A Trust and Company Services Provider (TCSP):

Forms and administers SPVs.
Provides trustee, director, company secretary, nominee shareholder, registered office, and LLP partner services.
Acts as the compliance and governance backbone of aircraft leasing structures.

4. Who Can Become a TCSP?

To qualify:

Must be incorporated within the IFSC as a company or LLP.
Branches of foreign entities are not eligible.
Promoters and partners must not be connected to FATF blacklisted jurisdictions.
Must maintain arm’s-length operations and meet “fit and proper” standards.

5. Registration Process

The process follows these stages:

Application through SWIT portal.
Rectify deficiencies (if any).
Opportunity to be heard before rejection.
In-principle approval.
180 days to fulfil conditions.
Certificate of Registration issued.
Registration remains valid unless suspended, cancelled, or surrendered.

6. Key Personnel Requirements

Every TCSP must appoint:

Principal Officer
Compliance Officer

Requirements for Both Officers

Be full-time employees.
Be physically located in IFSC.
Meet educational and fit-and-proper requirements.

7. Major Compliance Obligations

TCSPs must maintain:

Governance framework.
Internal audits.
AML/KYC controls.
Conflict-of-interest policy.
Segregation of duties.
Detailed records for all entities and arrangements managed.

8. Record Keeping Rules

TCSPs must:

Maintain entity, ownership, trust, and service records.
Keep records accessible to regulators.
Retain records for at least 5 years after the client relationship ends.

9. The Most Important Commercial Provision: SPV Rule

Normally, TCSPs can only serve non-residents.

Exception

TCSPs may serve an IFSC-based SPV even when the SPV is sponsored, originated, or financed by an Indian resident.
The SPV remains the TCSP’s client, not the Indian sponsor.

This provision enables Indian airlines and investors to use IFSC leasing structures efficiently.

10. Financial & Operational Requirements

TCSPs must:

Operate primarily in specified foreign currencies.
Maintain financial reporting in USD.
Carry professional indemnity insurance.
Maintain conflict management procedures.

11. Regulatory Oversight

IFSCA has extensive powers to:

Request information.
Conduct inspections.
Appoint special auditors.
Review books, records, infrastructure, and operations.

12. Consequences of Non-Compliance

Possible enforcement actions include:

Suspension of registration.
Cancellation of registration.
Financial penalties.
Public censure.
Referral to law enforcement agencies.

Executive Summary (One-Minute Version)

The 2026 amendment creates a dedicated regulatory regime for TCSPs that manage aircraft-leasing SPVs in GIFT City IFSC. TCSPs must be IFSC-incorporated, professionally staffed, well-governed, adequately insured, and fully compliant with AML/KYC requirements. The most significant business-friendly feature is the SPV Rule, which allows Indian sponsors to establish aircraft leasing SPVs in IFSC while keeping the SPV—not the Indian sponsor—as the TCSP’s client. This framework strengthens India’s ambition to become a major global aircraft leasing and aviation finance destination.

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