Why is Flipkart registered in Singapore, and why does it now plan to shift to India?

Flipkart, the Indian e-commerce giant founded in 2007 by Sachin and Binny Bansal, has long been a symbol of India's digital retail revolution. Yet, despite its strong Indian roots and operational base, the company has, for over a decade, maintained its legal domicile in Singapore.

This curious corporate arrangement, while initially a strategic choice, is now being reversed. Flipkart recently confirmed plans to shift its holding company back to India. The decision, taken in the context of an upcoming domestic initial public offering (IPO), reflects a changing tide in how Indian startups structure themselves in the global economy.

The Strategic Move to Singapore

Flipkart’s move to register its holding company in Singapore in 2011 was the outcome of several complex but calculated business decisions.

At that time, India’s foreign direct investment (FDI) regime, particularly concerning e-commerce, was heavily regulated and opaque. Navigating these constraints while scaling rapidly proved difficult.

In contrast, Singapore offered a much more conducive legal and financial ecosystem. The city-state boasted robust investor protection laws, a stable and transparent regulatory climate, and a reputation for being a hub for global capital.

Moreover, Singapore’s favourable tax regime, with lower corporate tax rates and zero capital gains tax, provided a strong financial incentive.

Its strategic geographic location and strong international connectivity also made it an ideal base for global fundraising and cross-border mergers and acquisitions.

By incorporating in Singapore, Flipkart was able to attract significant foreign investment, grow its valuation, and seamlessly execute key financial strategies that would have been fraught with red tape in India.

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Repatriation Motivated by Market Maturity

Over the past decade, India’s startup ecosystem has matured significantly. Regulatory reforms such as the simplification of compliance norms, improvements in business rankings, and tax rationalisations have made it more attractive for startups to domicile locally.

Flipkart’s decision to return its holding company to India is largely influenced by the growing appeal of the domestic capital markets.

With its majority stakeholder, Walmart, preparing for a major IPO, listing on Indian exchanges allows Flipkart to tap into a rapidly maturing investor base that increasingly values local tech champions.

A domestic listing also enhances the company's corporate governance by aligning its legal structure with its operational and customer footprint.

Indian investors and regulators generally favour businesses that are fully domiciled within the country, which helps in building trust and long-term market reputation.

A Broader Trend Among Indian Startups

Flipkart’s move is part of a wider repatriation wave sweeping through the Indian startup ecosystem. High-profile startups like PhonePe, Razorpay, Zepto, and Pine Labs have all taken steps to shift their domiciles back to India.

Startups now find it easier to comply with India’s evolving regulatory landscape, including rules related to taxation and data localisation, when they are domiciled within the country.

Further, government initiatives like Startup India, which offer benefits such as tax holidays and easier funding access, have made the domestic environment more appealing.

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As more firms follow suit, India could witness a new chapter where homegrown giants are not only operating from India but are also legally rooted here, reinforcing both investor trust and national economic ambitions.