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India is the land of opportunity for investors in Asia

3 June 2021

Sameer Mittal

Managing Director India

Sameer Mittal

Managing Director India

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Singapore provides an ideal base for investing in an exciting territory that is still full of potential

India offers immense investment opportunities for global investors, comparable with China and other mature Asian economies.

Over the past decade, India has emerged as a strong international player, boosted by the rapid growth of its private sector and its success in forging strong ties with developed economies.

This has created huge opportunities for investors and has made the country a top consideration for multinational companies. India’s rapidly growing population and growing economy could see it rival that of China in coming years.

While India is best known for its expertise in information technology, its pharmaceutical, software, FMCG, chemicals and petrochemicals, auto, construction and engineering, financial services, food and beverages and real estate industries are all expanding and offering high yields. India has a young, educated workforce and a growing middle class that provides a huge market for goods and services.

Singapore is the springboard to investing in India

Politically stable and with strong historical ties to India, Singapore is a natural springboard for global investors interested in India. Singapore is a leading trade partner of India, with well-established bilateral trade flows. The fact that these two countries share similar legal structures and time zones is also helpful.

Besides offering a stable financing platform, Singapore has a well-established Double Taxation Avoidance Agreement (DTA) with India. This is an added benefit for businesses and investors looking to expand into either country. For example, shareholder dividend income, which is taxed in the resident country, could range from 10% – 15%.

Whether you want to acquire, set up or invest in a business in India, Singapore is the ideal base.

Singapore’s legal structure for establishing companies follows the English system, making it simple to understand and to navigate. There are also grants and comprehensive tax incentives to support incorporation.

The bilateral trade agreement with India makes it possible to reduce your tax bill significantly if you invest in India via a Singapore-based holding company.

Moreover, Singapore is a vibrant financial hub with links to major global trading partners. It has a well-educated workforce, experienced in the financial sector.

Foreign capital is flowing into India

Within India, the Foreign Direct Investment (FDI) regime is considered one of the most liberal in the world, making it a very attractive place to invest and do business. This is the result of reforms and changes made by India’s government as it courts investment from overseas multinational companies

According to the Indian Ministry of Commerce and Industry’s FDI Report released in October 2020, total FDI inflow to India grew by a staggering 55% in two periods, from $231.37bn in 2008-2014 to $358.29bn in 2014-20. The strong interest is reflected in the 800 subsidiaries which have been set up locally by international firms since August 2020.

Singapore, a long-established trade partner of India, is the major contributor of FDI, contributing about $12.6bn in 2019-2020. Recent landmark investments include Singapore-based Jungle Ventures’ investment in a $17m fundraising round by Leap, an Indian education tech company. While Singapore’s GIC Private Limited took up additional stakes in SBI Life Insurance in 2020 through a secondary market transaction worth $211m.

In December 2020, MedFin, an Indian healthcare start-up focused on day care surgeries, successfully raised funding from HealthXCapital, a health tech venture capital fund based in Singapore. In March 2021, Cashify, a re-commerce marketplace that buys and sells used smartphones, received a $15m investment from Olympus Capital Asia.

The strong deal flow between Singapore and India is set to grow post- pandemic. Given its large ecosystem of financiers and financial networks, Singapore continues to be the first stop for international investors looking for opportunities in Asia.

How can Intertrust Group help?

Find out more about how you can work with trusted professionals at Intertrust Group to support the administration of your Singapore and India entities.

  • Our fully functioning office in India has legal and accounting expertise and a strong network of partners
  • We can help navigate the corporate requirements and legal structures involved in establishing or buying a business in India.
  • We provide customised reporting solutions, equipped to handle even complex situations.
  • With over 30 years of experience, we are a top choice for global institutional clients and investors.
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