Flipkart co-founder Binny Bansal advised Indian founders to incorporate their startups in India, amid a wider trend where many new age companies are looking to flip their base back to India from countries such as the United States and Singapore.
Bansal's comments come months after Walmart-owned payments giant PhonePe moved its domicile back to India and has to pay a whopping $1 billion (around Rs 8,000 crore) as tax as a result of the move.
Moneycontrol reported on June 13 that the Government may launch a scheme for Indian startups to flip to GIFT City with minimal tax implications in the upcoming Budget next month.
Unicorns such as Flipkart, Meesho, Groww, Zepto, Pine Labs, Razorpay and Udaan are all looking to domicile in India, moving out of countries like the US and Singapore, ahead of an eventual public listing here in India.
Also read: Was a sceptic but now believe in quick commerce’s potential: Flipkart co-founder Binny Bansal
“Domicile equation was about where you wanted to go public. If you domicile in India you couldn't go public in the US,” Bansal said in response to Moneycontrol’s questions.
“The US was the default before the market opened up for tech IPOs (in India) but now it's clear that India is a great destination for tech IPOs – you will see a lot of IPOs here. My advice to founders would be if you are building in India, even if you are building global companies too, to incorporate in India,” Bansal added.
In the past, Better protection and enforcement of intellectual property and tax treatment of licensing revenue from IP, residential status of founders and agile corporate structures have been the reasons for “flipping” or setting up a company’s domicile out of India.
To encourage companies to domicile in India. The government might further follow up with another policy at a later date to allow companies domiciled in GIFT City to list on Indian bourses like BSE and the National Stock Exchange (NSE).
While the move will augur well for companies like Razorpay, Zepto and Meesho, all of which are looking to flip back to India, it will also help them tap into the growing mutual fund and retail investor appetite for tech stocks in the country.
Bansal was speaking at the launch event of South Park Commons (SPC) in India.
The tech startup community and early-stage venture fund founded by Aditya Agarwal and Ruchi Sanghvi is setting up an India-dedicated fund and is on the lookout for two partners who will lead operations for the startup incubator in the world’s third-largest startup ecosystem.
SPC has also roped in Bansal to oversee its operations in India and identify talent locally.
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