Why The Indian startups registered in Singapore? IMBOOKISH

Why The Indian startups registered in Singapore? CASESTUDY IMBOOKISH

Why The Indian startups registered in Singapore? CASESTUDY IMBOOKISH

A topic around what you can learn from this

  1. Introduction

Sameer Khandepaun, When looking for funding for his startup, Mobikon Then he got many offers Out of which, many offers were from US investors. As it happens every time But still this time Mobikon preferred Jungle Ventures Which is, Singapore's Early Stage Venture Capital Firm not only that, in July 2012 The company shifted its base from Pune to Singapore. Now, we have been hearing this thing for many years about Flipkart, which moved its base to Singapore in 2011 And it's not just about one or two companies Today, there are more than 8000 Indian companies registered in Singapore. 

And now this number is increasing rapidly Startups want to do business in India they want to hire people in India too But the company has to form in Singapore This is not the story of any one startup Many startups are following this pattern it is heard many times that due to taxation, they must be leaving but if taxation is only the reason, then why only Singapore?

There are many island nations Where you don't have to pay any tax. In Singapore, some tax is there, but there, it seems to be nothing like tax still, why Singapore?

Hello I am Sanjay, welcome you to today's Article  See, the thing is that India got freedom in 1947, and Singapore got in 1959 Singapore became a separate nation in 1965 But still, today Singapore is ahead of India in many respects Well now is not the topic of today's Article

But if you want a detailed Article on this topic So tell us by commenting

So let's start with taxation

Taxation is one reason for any Indian startup to shift to Singapore By the way, there are many taxes in India which are much more than in Singapore. if we talk about Dividend Distribution Tax, Which is paid  from the net profit of the company So it is taxable for the company in India but to avoid double taxation in Singapore, Dividend paid to shareholders is not taxable Now though is to save dividend tax Many companies also do many tricks like, a loan-dividend scheme. If we talk legally then in India you have to pay tax. Now the tax which is the second largest after dividend Which is a headache for investors and companies that is, Capital Gain Tax

So in India, if you invest in the stock market for long-term So there are the owners of many companies, they have to pay capital gain tax up to 10% And in some companies, it is more So that's why the founders who sold their shares then they have to pay a lot of taxes here and the main thing is, This Capital Gains Tax is absolutely zero in Singapore According to one report, the Sequoia Capital also saved the income tax in the same way The Indian software company Dhruva, In which Sequoia Capital invested So Dhruva which was an Indian company, they built the same structure in Singapore Due to this, capital gains tax was saved for many investors, later but now the question is, okay, we understand that, to save dividend/capital gain tax the company is getting formed over there 

but, then why only Singapore? 

why not other countries? So, the main reason behind that is, between India and Singapore Double Taxation Treaty is signed This treaty says that Whatever double taxation ism should be avoided the tax, that applies to both countries it will be imposed in any one country So if you pay any tax in Singapore then You don't need to pay that tax again in India This treaty was signed for  Promote commerce and trade between India and Singapore So it is a simple matter that if any startup which has been formed in Singapore If it is paying any tax there So there is no need to pay the same tax in India. Different incomes are taxed in different ways in this agreement to avoid double taxes on that income You can see that list on the screen It happens whenever a country wants to do the international expansion, So first it wants to enter Singapore Because Singapore is a very favourable location Because the whole world considers Singapore to be a very clean and  law bordering country And whatever investment comes from there that is also welcome

 If you see the list of FIA of India From where is the FIA ​​putting money in India?

In that, too, Singapore comes among some top countries.If we talk about an individual's stock market, Many people see, what FIA's have bought and sold? and they start copying but according to me, this is not a good strategy. If you want to invest in a stock market So you should always invest by doing your own analysis .

So that money doesn't belong to the people of Singapore But many big companies, Venture Capital Firms, Private Equity Firms, Build their base in Singapore and then invest from there because Singapore's name is clean So there is not much investigation of that money, the same money comes from another country let's say, will come from an island nation Where some venture capital firms go to save tax Pay Firms go there, 

So that money will be checked whether it is correct or not Or is there something wrong, is there some corruption in it?

whether it is black money or what?

so all those things don't happen here one more benefit of Singapore is, In that country, when money comes from the US or from any other country So it is processed very quickly And in the future, Singapore also proves to be very good for deal-making. There is a favourable environment for mergers and acquisitions for mergers and acquisitions. so many large investment banks have been set up there so many VCs have been set up there for funding then things get a lot easier There are two more special things about Singapore Which attracts many startups there Low Corruption and ease of doing business if we see the ease of doing business ranking of 2020 So Singapore's number comes second in it. India's number comes to 63 So in spite of speeding up a lot of processes in company formation in India 

India is still far behind If you want to know the ease of doing business in India, So you meet such a person in India who wants to close their company And ask them how many problems you have to face Closing a business is more difficult in India than starting If we talk about corporate taxes, then, it is 0 to 17% in Singapore At the same time in India, sometimes they even go up to 30-35% so the stable environment, ease of funding, benefit in taxation and low corruption

Which are attracting any startup to move to Singapore?

I see many countries which have very low per-capital income and see those many countries which per-capital income is high So the biggest difference I see is It is not that there are fewer jobs here and there are more Business is more here, and less business there but that is corruption in a poor country, you will see that there is a lot of corruption there. compare to the country which is developing very fast Because there, the same corruption-money is invested in development. And the rest of the countries which are struggling The same development money is going into corruption there so that is the difference according to me. Today, businesses are growing in India But more work is needed here at the side of ease of doing business infrastructure and most important, In favour of reducing corruption Another problem that I see in India Particularly from the finance ministry that it is always tried here that Revenue should be brought at the earliest from any particular field. as happened with crypto So all of a sudden the entire crypto market is almost over So the money that could become a lot in the upcoming 10 years it was rooted out a similar thing is happening at the Capital Gain in the stock market, what was zero for a few years It has been increased to 10%, up to 1 lakh And recently I read in the news that There are plans to increase it even more. All these things can probably demotivate an investor to invest in a stock market And the environment that is being created right now of investment. By increasing it, you can earn more money in the long term rather than putting too much tax in shot-term to earn money Singapore is doing the same they earn a lot of money from taxes But this is, to earn money in volume by charging fewer taxes Rather than applying more taxes, to earn more money in short-term So there is a lot of need for long-term thinking here according to me, And when we bring all these reforms Only then can stop those companies from going to Singapore.

So this is our analysis Why Startup companies registers in Singapore Must share the CASE STUDY with your friends also who do not know its reason.


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