– Sesh A.V., Basiz Fund Services at the Venture Intelligence APEX’13 Summit
From a recent Business Today article:
Exact data on such ventures is not available, but the number of Indian
companies with operations in the citystate jumped to 4,000 in 2012 from
1,100 in 2000, according to the Singapore Economic Development Board
(SEDB). Industry executives say a Singapore presence is ideal
for companies aspiring to go global as the city-state is an
international business hub. “The very fact that your company is
based in Singapore means it is considered more of a regional or global
company as the local market is very small,” says Murli Ravi, Head of
South Asia investment at Singapore-based venture capital firm Jafco
Asia.…The most compelling reason for Indian entrepreneurs to move their
headquarters is the ease of doing business in Singapore. The Southeast
Asian nation topped the World Bank’s Doing Business 2013 survey of 185
countries. India is ranked 132. In terms of starting a business,
the city-state is ranked fourth while India comes in at 173. The World
Bank survey also notes that it takes three permits and three days to
start a business in Singapore. In comparison, it takes 12 approvals and
27 days to start a business in India. “The biggest thing
companies love there is zero corruption,” says Arvind Lakshmikumar,
founder and CEO of Tonbo Imaging. The start-up, which makes high-end
imaging equipment for armed forces, was set up in Bangalore in 2007 and
moved to Singapore last October. Lakshmikumar says Singapore’s easier tax regime makes it even more attractive. The city-state caps corporate tax at 17 per cent, compared
with more than 30 per cent in India. Lakshmikumar says Tonbo was also
paying 35 per cent import duty on raw material and 15.5 per cent
valueadded tax in India. “That’s a huge tax burden,” he says.…Capillary Technologies, a customer engagement solutions provider which
shifted from Kolkata to Singapore last July, does not want to talk much
about the reasons for the move. “We do not want to be seen as a company
which is shifting base to save taxes,” says co-founder Krishna Mehra.
“We are very much an Indian company at heart.” Mohan Kumar,
Executive Director at Norwest Venture Partners India, says shifting to
Singapore was a “smart move” by Capillary since it has a large number of
customers in that region. Kumar believes that the trend, which has
accelerated over the past two to three years, is likely to pick up
further.
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