Why Are Indian Startups Moving Their HQs to Singapore & Dubai?

India’s startup ecosystem has been thriving, producing over 100 unicorns and attracting billions of dollars in investments. From fintech to deep tech, Indian entrepreneurs are making waves globally. However, in recent years, a growing number of these startups have been relocating their headquarters to Singapore and Dubai. This raises crucial questions: Why are they moving? What advantages do these locations offer? And what does this shift mean for India’s startup future?

While many of these startups continue to operate in India, their decision to shift HQs abroad signals challenges in India’s business environment. Some cite tax benefits, regulatory ease, and investor preferences, while others highlight IP protection and international market access. So, what’s really driving this trend? TICE breaks it down for you.

Who’s Moving? Some Big Names

Several high-profile Indian startups have moved their headquarters overseas, despite having a strong base in India. Some examples include:

• Flipkart (Walmart-owned) - Originally an Indian company, Flipkart restructured its holdings under a Singapore-based entity before Walmart’s acquisition.

• PhonePe - Initially registered in Singapore for ease of investment but later shifted its domicile back to India in 2022.

• Polygon (Matic Network) - The Web3 startup, despite being founded in India, is domiciled in Dubai to benefit from its favorable regulatory framework.

• Cred, Groww, Razorpay - Have parent entities or financial structures based overseas to attract global investors.

Why Are Startups Choosing Singapore & Dubai?

Favorable Tax Environment

• India’s corporate tax rate is 22%, but with additional surcharges and cess, the effective rate reaches 25.17%.

• Singapore’s corporate tax rate is 17%, offering a lower tax burden.

• Dubai’s corporate tax is 9% for businesses exceeding AED 375,000 in profits, but many startups in free zones enjoy a 0% tax rate.

• No capital gains tax in both Singapore and Dubai means founders can enjoy better returns when they exit or sell stakes in their companies.

Easier Regulations & Compliance

• India’s regulatory framework, especially for sectors like fintech and crypto, is complicated and often unpredictable.

• Singapore’s simplified legal framework makes it easier to set up and run a business.

• Dubai’s free zones allow startups to operate with minimal restrictions, full foreign ownership, and regulatory flexibility.

Access to Global Investors & Markets

• Many top venture capital firms and institutional investors prefer startups registered in Singapore or Dubai, where legal structures are more investor-friendly.

• Singapore is a gateway to Southeast Asia, while Dubai provides easy access to Middle Eastern and European markets.

Better IP Protection & Business Environment

• Startups dealing with deep tech, fintech, and AI need strong intellectual property protection, which Singapore offers.

• Dubai has been improving its intellectual property regulations, particularly for Web3 and blockchain startups, making it an attractive option.

Is This a Loss for India? What’s the Impact?

While these relocations don’t mean the startups have abandoned India, the shift has significant consequences:

• Loss of Tax Revenue – With companies setting up overseas, India loses potential corporate tax income.

• Reduced Influence Over Policy – When Indian startups are headquartered elsewhere, India loses some control over their governance and compliance.

• Talent Drain – Some companies move key leadership and decision-making roles outside India, leading to an outflow of high-skilled professionals.

Can India Stop the Exodus? What Needs to Change?

If India wants to keep its startups domiciled at home, some key reforms are needed:

• Simplify Taxation & Regulations – Making tax structures more competitive and reducing compliance burdens will help.
• Better Incentives for Startups – Programs that encourage startups to stay headquartered in India.
• More Investor-Friendly Policies – Providing regulatory clarity, especially in emerging fields like crypto, fintech, and AI.

For many Indian startups, moving headquarters to Singapore or Dubai is not about abandoning India—it’s about securing better business conditions. However, India remains a global powerhouse of innovation, with a vast talent pool, a growing digital economy, and strong government initiatives like Startup India and Make in India. As policies evolve to make the ecosystem more competitive, India has the potential not just to be a startup hub but also to retain its startups and build world-class businesses on home soil.

With continuous reforms and a forward-looking approach, India can create an environment where startups thrive locally while scaling globally. The future of Indian startups is bright, and the country is well on its way to becoming a true startup superpower