Committee has identified challenges and recommended measures for development of International Innovation Hub
A ‘Committee of Experts to ‘Onshoring the Indian Innovation to GIFT IFSC’ is working to avoid externalization of startups in the future and also to persuade startups that are presently externalized to redomicile back.
Constituted by International Financial Services Centres Authority (IFSCA), the committee has been directed to understand the reasons for Indian startups to shift outside India to business centres like Singapore, the Netherlands and Luxembourg.
The committee, chaired by former RBI Executive Director G. Padmanabhan, comprised representatives from leading Venture Capital funds, Startups, Fintechs, Law firms, Tax firms and other domain experts.
It has submitted a report to Chairperson, IFSCA, on 14 August 2023, Finance Ministry said in a statement on 25 Aug 2023.
The committee has provided its recommendation that are critical to the development of GIFT IFSC as a global Fintech Hub, besides suggesting measures to encourage new Fintechs to have global outlook to set up their commercial presence in GIFT IFSC.
Additionally, the committee has identified challenges and recommended measures for the development of the International Innovation Hub at GIFT IFSC.
The report has suggested various measures and action points to be undertaken by various stakeholders including ministries, regulatory bodies and others in implementing the idea of onshoring the Indian innovation to GIFT IFSC.
The committee report offers a comprehensive comparison of India’s approach to holding company setups with other leading jurisdictions like Singapore, the Netherlands, and Luxembourg, known for successfully implementing such setups.
By highlighting the manifold advantages and addressing potential challenges associated with holding company regimes, the report unveils the immense potential of reverse flipping to drive India’s economic development to great heights.
The Committee has inter-alia recommended aligning the tax and regulatory laws within the IFSC with international best practices, to create an environment that actively incentivizes and supports holding company structures.
The committee has also examined in the report several push-pull factors are responsible for Indian founders flipping to overseas jurisdictions.
The Committee believes that the insights presented in the report will help drive dialogue in the ministry and will contribute to making India a US$5-trillion economy and a global powerhouse by 2024-25. Fiinews.com
