When it comes to business industries, Singapore is an industrialized nation. India and Singapore are major trading partners, and their business arrangement is growing. Heritage, tradition, and ethnicity are all shared between the two nations. Both connect their societal values to South Asian Indo-Chinese priceless antiquities; both have long been parts of the British Empire; both gained freedom from British domination around the same time; and both were impoverished nations when they gained independence.
Although India’s journey from a tightly controlled communist economy to a knowledge-based society has been winding yet progressive, Singapore’s commitment to trade has been firm, albeit tinged with autocracy. India’s affluence has been gradual and uneven, whereas Singapore has emerged as a model of industrial prosperity and is now regarded as a leading first-world country.
In this article, we will briefly discuss why most of India’s tech giants are registering their businesses in Singapore. Let’s begin.
Reasons Why Indian Tech Giants Have Registered In Singapore
1. Access to a Qualified Manpower:
One of the principal factors why an innovative tech firm with great options flops is that it does not have suitable staff. The number of talented employees you will find in Singapore is ranked second in the Global Talent Competitiveness Index by INSEAD. The absence of a competent working population has lowered efficiency, and firms are having trouble hiring qualified people to propel their companies ahead.
2. Less Crime and Stronger Facilities:
The Global Competitiveness has mentioned Singapore as second out of all the other nations for supporting of new enterprises in the World Economic Forum’s 2018 and has mentioned India in the 60th.
The ministry is a big supporter of creativity, intending to create a smart nation to address the issues of aging and urbanization, which opens up new market opportunities for inventive tech companies. India has a constantly increasing industry, but it lacks adequate facilities and is not on track with Singapore because of its rampant crime and corruption.
3. Setup is simple:
The complete online registration for a company takes an average of 3 stages, per the World Bank Group’s Doing Business Plan, compared to a national average of significantly more than a month and 7 steps for the incorporating operation. In India, the entire establishment operation of a corporation takes a month and 13 steps to accomplish.
4. Possibility of Checking:
Singapore is a reflection of the globe, making it an ideal place for any type of tech or innovative company to test their items/solutions before launching them and improving them. It is also a technologically advanced and infrastructure country.
5. Beneficial Tax Plan:
Singapore’s low taxation promotes new businesses. Earnings that is taxable is paid at a fixed interest rate of 17%. For perhaps the first three years of their evaluation, Singapore grants corporate tax exemptions for freshly formed enterprises, with the first $100,000 taxable earnings freed from taxation and the next S$200,000 taxable revenue liable to only 8.5% tax.
Read More: Singapore Tech.Pass For Entrepreneurs
Why is Flipkart Registered in Singapore?
Flipkart was founded in 2007 by Sachin Bansal and Binny Bansal. While the company is headquartered in Bangalore, Karnataka, India, it is legally incorporated in Singapore. It employs over 33,000 people and operates as one of India’s largest e-commerce platforms, with a popular fashion subsidiary, Myntra.
Several strategic reasons led Flipkart to register in Singapore, including tax benefits, ease of doing business, and investment regulations.
Key Reasons for Flipkart’s Singapore Incorporation
1. Tax Benefits
Taxation plays a crucial role when deciding where to incorporate a multinational company. Singapore offers a corporate tax rate of 17%, significantly lower than India’s 34% corporate tax rate.
Some tax advantages include:
- Avoiding double taxation – Singapore follows a one-tier corporate tax system, meaning once a company pays taxes at the corporate level, dividends distributed to shareholders are tax-free. This benefits Flipkart’s major investors and shareholders.
- Lower corporate tax rates – While Singapore has a 17% corporate tax, India’s effective tax burden on businesses can be much higher.
- Trade-friendly tax structure – Singapore imposes no export duties on selected products like liquid fuels and cigarettes, making it an attractive destination for international businesses with global suppliers.
2. Ease of Doing Business
For over a decade, Singapore has ranked among the top countries in the Global Competitiveness Index due to its business-friendly policies. Key factors include:
- Minimal bureaucracy – Business incorporation and operations in Singapore are straightforward.
- Efficient legal and financial systems – The regulatory environment is transparent and supports corporate expansion.
- Global trade hub – Singapore is a leading global financial and trade hub, providing better access to international markets.
3. India’s Investment Regulations
At the time of Flipkart’s incorporation, India had restrictions on Foreign Direct Investment (FDI) in the B2C e-commerce sector. This meant that international investors could not directly invest in an Indian e-commerce company operating under a business-to-consumer model.
To secure foreign funding, Flipkart had two options:
- Sell the company to a larger corporation with sufficient capital for expansion.
- Restructure the business by incorporating in Singapore, allowing it to raise funds globally, list on international stock exchanges, and expand operations without Indian FDI restrictions.
By incorporating in Singapore, Flipkart attracted global investors, including SoftBank, Tiger Global, and Tencent, and positioned itself for strategic expansion.
Looking to register your company in Singapore? Reach out to us by simply filling out the form, and our experts will reach out to you for 30 minutes of free consultation.
Why is Inmobi registered in Singapore?
InMobi is the largest telecommunications marketing and discovering community. This system is unique in that it allows users to find innovative products while also preferred items, programmers, and publications to connect customers through mobile marketing. Naveen Tewari Corporation was founded in 2007. It had a massive effect and grew to 22 locations in 17 countries across 5 continents throughout time.
Indian businesses should take advantage of all of Singapore’s advantages. And if their intended audience is in India, there must be some compelling reasons for many companies to relocate their headquarters or form a Singaporean private equity firm.
The perks that Inmobi got are as follows:
- The India-Singapore Procedure promotes international collaboration by exempting Singapore residents from earnings in both India and Singapore when raising capital in an Indian company.
- Income earned by the company is only liable in the region where it is operated. In other words, corporation taxes will only be levied in India if the Singapore-based business owns a strong foothold there.
Conclusion
Singapore’s robust intellectual property regulations, sophisticated infrastructure, business-friendliness, free trade zones, and government funding have made it an appealing option for Indian technology companies looking to expand their operations in the nation.
Singapore is rising exponentially annually, and new business technology, such as cryptocurrency, is being accepted. India, on the other hand, has a progressive tax and several legislative requirements while allowing new technology such as cryptocurrency and electrical grids.
If you are planning to set up a firm in Singapore, it is advisable to seek guidance from experts from OnDemand International. Get in touch with our experts today.
