India’s startup ecosystem has flourished, producing over 100 unicorns and drawing billions in investments. However, a growing trend has emerged—many successful startups are shifting their headquarters to countries like Singapore and Dubai. While they continue to operate in India, their decision to relocate raises important questions. What advantages do these locations offer? And what does this shift mean for India’s startup future?
Major Startups Moving Abroad
Several well-known Indian startups have moved their headquarters overseas, citing various benefits. Some prominent examples include:
- Flipkart – Originally founded in India, Flipkart restructured under a Singapore-based entity before Walmart acquired it.
- PhonePe – Initially registered in Singapore to facilitate investments but later moved back to India in 2022.
- Polygon (Matic Network) – The blockchain startup moved to Dubai for its favorable regulatory environment.
- Cred, Groww, Razorpay – These fintech giants have overseas structures to attract international investors.
Why Singapore and Dubai?
Lower Tax Burden
- India’s corporate tax rate is 22% but goes up to 25.17% with additional surcharges.
- Singapore offers a 17% corporate tax rate.
- Dubai’s corporate tax is 9%, and businesses in free zones enjoy a 0% tax rate.
- Neither Singapore nor Dubai imposes capital gains tax, making them attractive for founders looking to maximize returns.
Simplified Regulations
- India’s complex regulatory framework, especially in fintech and crypto, creates uncertainty.
- Singapore has a streamlined legal system, making it easier to establish and run businesses.
- Dubai’s free zones allow full foreign ownership, minimal restrictions, and regulatory flexibility.
Global Investor Access
- Many top venture capital firms prefer startups registered in Singapore or Dubai due to their stable policies.
- Singapore serves as a gateway to Southeast Asia, while Dubai provides access to Middle Eastern and European markets.
Stronger IP Protection
- Deep tech, AI, and fintech startups require robust intellectual property (IP) laws, which Singapore ensures.
- Dubai is strengthening its IP regulations, making it a hub for blockchain and Web3 startups.
The Impact on India
The relocation of Indian startups does not mean they are abandoning the country, but it does have consequences:
- Loss of Tax Revenue – With headquarters abroad, India loses potential corporate tax earnings.
- Reduced Policy Influence – When startups are domiciled elsewhere, India has less control over their governance.
- Talent Migration – Key decision-makers often move outside India, impacting the local workforce.
Can India Reverse This Trend?
For India to retain its startups, some key changes are necessary:
- Simplify Tax and Compliance – A more competitive tax structure and easier regulations can encourage startups to stay.
- Better Incentives – Startup-friendly policies and financial benefits can make India more attractive.
- Investor-Friendly Reforms – Clear policies for emerging sectors like crypto, fintech, and AI can provide stability.
A Balancing Act for Indian Startups
For many founders, relocating is not about leaving India but securing better business conditions. India remains a powerhouse of innovation with vast talent, a growing digital economy, and strong government initiatives. If policies evolve to match global standards, India can retain its startups while continuing to build world-class businesses.
