Startup Business SG : 5 Key Reasons why Flipkart incorporated in Singapore

Startup Business SG: Singapore is a global business hub and has over the years played to host to several global unicorn startup companies including, but not limited to, Grab and Garena.  Some investors and startups have asked why is it that despite Flipkart having operations in India, its parent company was incorporated in Singapore.  To help to solve this mystery, we have set out some reasons why some Indian startups are headquartered in Singapore.

#1: Singapore has a large number of VC Fund Investors who invest in Indian Startups.

Some of the largest Indian startups are headquartered in Singapore and this restructuring is carried out via a “Flip structure” due to the fact that some of the largest and best funded VC funds are based in Singapore and such investors require the India startups to be restructured to having Singapore holding companies.  India has capital controls so any flip structure requires an understanding of offshore and onshore restructuring for India.

#2: Singapore does not have capital controls on currency flows

For Indian startups with global ambitions, it makes sense to do a flip structure and restructure such that the holding structure for the startup is based in Singapore which does not have capital controls so that the startup can expand globally.

#3: Singapore has a globally recognised legal system

Investors invest into companies in countries with a stable legal system.  Singapore like India has a common law legal system so as a result when the large global VCs look for a jurisdiction to invest through they would typically choose Singapore when investing into Indian startups.

Startup Business SG #4: Singapore has a competitive tax regime

Singapore has a low rate of taxation for companies of 17% and has a partially territorial system of taxation so for a company, if profits are made outside of Singapore and such profits are not remitted into Singapore, Singapore will not tax such profits.    

But separate from income tax, stamp duty in Singapore on the transfer of shares (assuming that your company does not own residential property in Singapore) is only 0.2% of the higher of the transaction value or the net tangible asset.  This allows for restructuring for the flip structure to be economically feasible.

#5: Singapore has one of the lowest levels of corruption globally

Due to a strong stance at all levels of government against corruption, Singapore is globally ranked no 3 in the world in being non-corrupt.  For a startup that wishes to fund raise from large global investors with strong compliance requirements internally, Singapore is a good jurisdiction to have a holding company to facilitate this offshore fund raising exercise. 

In conclusion, Singapore is a globally competitive location for startups to set up a holding company and carry out fund raising activity for cross border expansion.  When considering fund raising from pan-asian or global VCs from Singapore which fund cross border expansion, one should consider setting up a Singapore holding company and do a flip structure such that the startup group can expand globally without issues of capital controls hindering growth.

Startup Business SG : With the increasing scrutiny on bank accounts of British Virgin Islands (BVI) and Cayman Islands companies it makes sense to set up a Singapore holding company to attract investment from offshore investors instead of setting up a BVI or Cayman Islands company.

If you have any comments on our article, please leave a comment below. is a corporate law and commercial law education website headquartered in Singapore which aims to demystify business law and 新加坡商业法 for SME Company Owners, Startup Founders and 新加坡新移民老板。The information provided on this website does not constitute legal advice. Please go to our contact us page and contact us and we will arrange for a lawyer to speak to you.  Please obtain specific legal advice from a lawyer before taking any legal action.  Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk.

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