AIF Registration in India with SEBI, end to end.
I help fund managers, family offices and promoters set up SEBI-registered Alternative Investment Funds - choosing the category, building the sponsor, manager and trustee structure, and coordinating counsel, the merchant banker and the trustee through registration to first close. I am Strategic Advisor at Stonebridge Advisors LLP, Sponsor and Investment Manager of Anchor Rock Investment Fund - I, a SEBI-registered Category III Alternative Investment Fund.
Who sets up an AIF with us.
An Alternative Investment Fund pools money from sophisticated investors under the SEBI (Alternative Investment Funds) Regulations, 2012. These are the teams that usually come to us:
First-time fund managers
Investment teams launching their first pooled fund who want the category, the structure, the SEBI filing and the compliance calendar right the first time.
Family offices and promoters
Promoter families pooling money with co-investors, or moving a proprietary book into a regulated fund with proper governance.
Angel networks and venture teams
Angel networks setting up a Category I angel fund, and venture teams raising a Category I venture capital fund.
Wealth managers and PMS houses
Advisers and portfolio managers adding a pooled product, often a Category III long-short or long-only fund, next to their existing mandates.
Which AIF category fits your fund.
SEBI places every AIF in one of three categories by what it invests in and whether it can borrow. The category then decides leverage, tenure, the sponsor commitment and tax - so it is the first decision, not a box on a form.
| Factor | Category I | Category II | Category III |
|---|---|---|---|
| Invests in | Venture capital, angel (its own sub-category since 2025), SME, social impact, infrastructure and special situation funds | Private equity, private credit and any other fund that is neither Category I nor Category III | Diverse or complex trading strategies, including long-short and listed or unlisted derivatives |
| Borrowing and leverage | Only for temporary needs: up to 30 days, at most 4 times a year, up to 10% of investable funds | Same as Category I | Leverage allowed within a ceiling linked to NAV |
| Structure and tenure | Close-ended, at least 3 years, extendable by up to 2 years with two-thirds of investors by value | Same as Category I | Open-ended or close-ended |
| Sponsor or manager commitment | Lower of 2.5% of the corpus or Rs 5 crore | Lower of 2.5% of the corpus or Rs 5 crore | Lower of 5% of the corpus or Rs 10 crore |
| Tax | Pass-through: investors are taxed, not the fund (business income aside) | Pass-through, as for Category I | Taxed at the fund level |
Common to all three: a minimum corpus of Rs 20 crore per scheme, a minimum investment of Rs 1 crore per investor (Rs 25 lakh for employees and directors of the manager) and at most 1,000 investors per scheme. Angel funds and large value funds have their own limits. A rule of thumb, not advice for your fund: every figure can change, and we confirm each one against the current SEBI rules before filing.
AIF registration, step by step.
Eight stages from the first conversation to a registered fund that can take money. Counsel drafts the legal documents; we design the structure, coordinate every party and review the documents commercially.
- 01
Category and strategy
We map the strategy, the target investors and the ticket sizes to Category I, II or III, and test the corpus and investor-count rules against your raise plan.
- 02
Vehicle: trust, LLP or company
Most AIFs are trusts under the Indian Trusts Act, 1882, with a professional trustee company. We compare the trust, LLP and company routes on tax, governance and investor familiarity.
- 03
Sponsor, manager and key team
We set up the sponsor and the investment manager, size the sponsor commitment, and check the key team, including the NISM certification SEBI specifies for AIF managers.
- 04
Trust deed, IMA and contribution agreement
Drafted by counsel, coordinated and commercially reviewed by us: fees, carry, hurdle, distribution waterfall, key-person and removal clauses.
- 05
Placement memorandum (PPM)
The PPM sets out the strategy, risks, fees and terms. Where the rules require it, a SEBI-registered merchant banker files it with SEBI after its own due diligence.
- 06
Form A on the SEBI portal
We put together Form A with the constitutional documents, the PPM and the fit-and-proper declarations, file it on the SEBI Intermediary Portal and answer SEBI's queries until registration.
- 07
PAN, bank, demat and service providers
PAN and a bank account for the fund, units in demat form through a depository participant and an RTA, and a custodian where the rules require one.
- 08
Compliance after registration
Investor onboarding and KYC, SEBI reporting, half-yearly valuation by an independent valuer for Category I and II, and the tax filings - on one calendar we maintain.
What goes into an AIF application.
A SEBI AIF file is only as fast as its weakest document. These are the pieces we put together and check against each other before anything is filed, so SEBI's queries are about the fund and not about gaps in the paperwork.
Constitutional documents
The registered trust deed (or LLP agreement or company charter), the trustee appointment and the investment management agreement between the fund and the manager.
Placement memorandum
The PPM in the SEBI template: strategy, risk factors, fees and carry, the distribution waterfall, conflicts of interest and the track record of the team.
Sponsor and manager details
Incorporation documents, net worth and financials of the sponsor and manager, the key investment team and their qualifications, including the NISM certification SEBI specifies.
Fit-and-proper declarations
Declarations for the sponsor, manager, trustee and their directors or partners, with the supporting KYC, so SEBI can test who controls the fund.
Contribution agreement
The agreement each investor signs: commitment, drawdown, default, transfer and exit terms, kept consistent with the PPM and the trust deed.
Operating set-up
PAN, bank account, depository participant and RTA for demat units, custodian where required, the valuer and the auditor - lined up so the fund can take money once registered.
Common mistakes we fix before filing.
Most delays in AIF registration come from a handful of avoidable issues. We check for each of them before the file reaches SEBI.
Wrong category for the strategy
A credit strategy filed as Category I, or a fund that will use leverage filed outside Category III. Changing category later needs SEBI approval, so we settle it first.
PPM, trust deed and IMA that disagree
Fees, carry, tenure or the waterfall described one way in the PPM and another in the trust deed. We reconcile every document line by line.
A thin key team
SEBI looks hard at the experience and certification of the people who will run the money. We map the team against the requirement before filing, not after a query.
Sponsor commitment not funded
The continuing interest has to be real money in the fund. We plan where it comes from and how it is held from the start.
Advice from inside a SEBI-registered AIF.
Vraj Changani is Strategic Advisor at Stonebridge Advisors LLP, Sponsor and Investment Manager of Anchor Rock Investment Fund - I, a SEBI-registered Category III Alternative Investment Fund. The advice on this page comes from running a fund, not only from reading the regulations.
Live fund experience
We know what SEBI asks, what the trustee and custodian need, and what investors read first in a PPM, because we work with a registered fund every day.
One coordinator for every party
Counsel, the merchant banker, the trustee, the RTA, the custodian and the valuer each own a piece. We hold the timeline and keep the documents consistent across all of them.
Domestic AIF or GIFT City fund.
If most investors are overseas, or the fund will invest abroad, a fund in GIFT City IFSC under IFSCA can fit better than a SEBI AIF. We advise on both, and set them up side by side where that makes sense.
SEBI AIF (domestic)
A rupee fund regulated by SEBI, with a minimum corpus of Rs 20 crore per scheme, built mainly for Indian investors investing in India.
GIFT City fund (IFSC)
A foreign-currency fund regulated by IFSCA through a fund management entity in GIFT City. Venture and non-retail restricted schemes start at a USD 3 million corpus.
GIFT City setupAIF registration questions.
Which AIF category should I choose?
It follows from the strategy. Venture capital, angel, SME, social impact and infrastructure funds sit in Category I; private equity and private credit funds usually sit in Category II; funds that use leverage or complex trading strategies, including long-short funds, sit in Category III. Changing category later needs SEBI approval, so it is worth settling at the start.
What is the minimum corpus and minimum investment for an AIF?
Each scheme needs a corpus of at least Rs 20 crore, and each investor must put in at least Rs 1 crore (Rs 25 lakh for employees and directors of the manager). A scheme can have at most 1,000 investors. Angel funds and large value funds for accredited investors follow their own limits.
How much must the sponsor or manager invest in the AIF?
A continuing interest of at least the lower of 2.5% of the corpus or Rs 5 crore for Category I and II, and the lower of 5% of the corpus or Rs 10 crore for Category III. It has to be real money invested in the fund, and it stays in for the life of the fund.
Should the AIF be a trust, an LLP or a company?
Most Indian AIFs are trusts with a professional trustee company, because investors, custodians and the tax rules are most familiar with that form. LLPs and companies are allowed and occasionally fit a particular investor base. We compare the three on tax, governance and exit before you commit.
Do I need a merchant banker to register an AIF?
Usually, yes. Where the rules require it, the placement memorandum is filed with SEBI through a SEBI-registered merchant banker after its due diligence. We coordinate the merchant banker, counsel and the trustee so the file moves as one.
How long does AIF registration take?
It depends mostly on how complete the file is and on SEBI's queries, so nobody can promise a date. What shortens it is a settled category, a reconciled PPM, trust deed and IMA, and fast, consistent answers to every query. We give you a working timeline once the structure is fixed.
What does it cost to set up an AIF?
There are SEBI's application and registration fees, which depend on the category, plus counsel, the merchant banker, the trustee and the operating service providers. We confirm the current SEBI fees from the regulations at the time of filing and give you a full budget before you commit.
Can NRIs and foreign investors invest in an Indian AIF?
Yes, subject to FEMA and the KYC rules, and the fund has to track the foreign investment for reporting. If most of the money will come from overseas, a GIFT City fund is often the better fit, and we compare the two routes for you.
Can a family office set up its own AIF?
Yes. Many family offices use a Category II AIF to pool family and friends' capital into private equity or credit, with professional governance and pass-through tax. We test whether an AIF, a PMS or a direct holding structure fits the family's goals better.
Can you guarantee SEBI registration?
No. SEBI decides every application, and nobody can promise its outcome or timing. What we control is a complete, consistent file and quick answers to SEBI's queries.
Do you also set up funds in GIFT City?
Yes. For overseas investors or investing outside India we set up the fund management entity and its schemes in GIFT City IFSC under IFSCA. The GIFT City setup page explains how that route works.
- AIF Category I vs II vs III: Which SEBI Category Fits Your Fund
- SEBI AIF Registration Process: Steps, Documents and Timeline
- AIF as Trust vs LLP vs Company: Choosing the Right Vehicle
- AIF Sponsor Commitment and Continuing Interest: SEBI Rules
- How to Set Up an Angel Fund in India Under SEBI's 2025 Rules
- AIF Tax and Compliance Calendar: 115UB, TDS, SEBI Filings
- GIFT City Fund vs Domestic AIF: Which Structure to Choose
- Vraj Changani - CA, Startup Advisor & IPO Consultant
Planning a fund? Start with the category and the structure.
Send a short note on the strategy, the target corpus and who the investors are. We will come back with the category, the structure and the sequence to SEBI registration.
WhatsApp +91 88664 48967 - CA Vraj Changani, DRSPV & Associates, Mumbai.