Singapore offers an ideal base to invest in an exciting territory that still has plenty of potential.
India offers immense investment opportunities for global investors, comparable to China and other mature Asian economies.
Over the past decade, India has emerged as a strong international player, driven by the rapid growth of its private sector and its success in forging strong links with developed economies.
This created huge opportunities for investors and made the country a top consideration for multinational companies. India’s rapid population and economy growth could see it rival that of China in the years to come.
While India is best known for its expertise in information technology, its pharmaceutical, software, FMCG, chemical and petrochemical, automotive, construction and engineering, financial services, agribusiness and real estate industries are all expanding and offer high returns. India has a young and educated workforce and a growing middle class which provides a huge market for goods and services.
Singapore is the springboard for 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 one of India’s major trading partners, with well-established bilateral trade flows. The fact that these two countries share similar legal structures and time zones is also helpful.
In addition to offering a stable funding platform, Singapore has a well-established Double Tax Avoidance Agreement (DTA) with India. This is an added benefit for companies and investors looking to expand in either country. For example, shareholders’ dividend income, which is taxed in the country of residence, can range from 10% to 15%.
Whether you are looking to acquire, create or invest in a business in India, Singapore is the ideal base.
Singapore’s legal structure for setting up companies follows the English system, making it simple to understand and navigate. There are also comprehensive grants and tax incentives to support incorporation.
The bilateral trade agreement with India significantly reduces your tax bill if you invest in India through a Singapore-based holding company.
Additionally, Singapore is a vibrant financial hub with links to major global trading partners. It has a well-trained workforce with experience in the financial sector.
Foreign capital flows into India
In 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 the Indian government as it wooes investments from foreign multinational companies.
According to the FDI report from India’s Ministry of Trade and Industry released in October 2020, total FDI inflows to India increased 55% in two periods, from $ 231.37 billion in 2008-2014. to $ 358.29 billion in 2014-20. The strong interest is reflected in the 800 subsidiaries that have been created locally by international companies since August 2020.
Singapore, India’s long-time trading partner, is the largest contributor of FDI, contributing around $ 12.6 billion in 2019-2020. Recent landmark investments include Singapore-based Jungle Ventures’ investment in a $ 17 million fundraiser by Leap, an Indian education technology company. While GIC Private Limited of Singapore took additional stakes in SBI Life Insurance in 2020 through a secondary market transaction valued at $ 211 million.
In December 2020, MedFin, an Indian healthcare start-up focused on day surgery, successfully raised funds from HealthXCapital, a Singapore-based healthcare technology venture capital fund. In March 2021, Cashify, a re-commerce marketplace that buys and sells used smartphones, received a $ 15 million investment from Olympus Capital Asia.
The significant flow of deals between Singapore and India is expected to intensify after the pandemic. Given its vast ecosystem of financiers and financial networks, Singapore continues to be the first stop for international investors seeking opportunities in Asia.
How can Intertrust Group help you?
Find out how you can work with trusted professionals at Intertrust Group to support the administration of your entities in Singapore and India.
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We can help you navigate the business requirements and legal structures involved in starting or buying a business in India.
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