Indian IT Startups Move Overseas For Easy Capital

BANGALORE: What does a Startup requires?  It requires angel, venture and equity capital at different phases in its escalation path. But what if these necessary essentials are not being provided to these startups in their own country?

Naturally they will move abroad for the needful. Even some of the grown-up ones have moved on their registered office from India to abroad, for instance, companies like Pubmatic, an ad-network company are now registered in U.S.; Flipkart, an e-commerce company has got registered in Singapore now. 

It is estimated that about 60-70 percent of IT startups are getting registered abroad. The reason is well known—access to capital, equity and venture. Moreover these countries will enjoy the benefits out of the growth of the company, maybe it’s the number of jobs created by the company or the various taxes to be paid.

According to Sharad Sharma, co-founder of software product association iSpirit said, “If an investor in an entity wants to exit, there is no clarity on how the government chooses to value the investor’s gains and how those gains will be taxed,” reports The Times of India.

Why countries like Singapore are attracting early stage startups is the government schemes. Under its National Framework for Innovation and Enterprise, the Singapore government co-invests upto 85 percent in Singapore-based startups.