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    Fintech Company Groww Completes Shift of Headquarters Back to India

    Fintech company Groww announced that it finished the transmission of its headquarters from the US back to India in March this year. According to a report by the Economic Times, the company had made a regulatory filing with the National Company Law Appellate Tribunal (NCLT) Bengaluru for a reverse merger between its India unit and US operations.

    Groww is not the first company to reverse flip or re-transfer its headquarters to India. One of the most notable startups to do so is PhonePe, whose parent company Walmart has paid nearly $1 billion in tax to the Indian government for shifting the startup’s headquarters from Singapore to India. Other foreign-domiciled Indian startups such as Razorpay, Pine Labs and Meesho are also expected to make a similar transition.

    Some context:

    Flipping or the shifting of domiciles away from India had been flagged as a major concern by the Economic Survey conducted by the government in 2022-23. As such, in March 2023, the International Financial Services Centre Authority (IFSCA)  set up an expert committee to identify a roadmap to encourage Indian fintech startups domiciled abroad to relocate to India, specifically to the International Financial Services Centre (IFSC) in GIFT City, Gujarat. One of the committee’s recommendations was “no tax for the offshore holding company on relocation to GIFT City.”

    However, in March 2024, Minister of Commerce Piyush Goyal stated that startups moving their domicile back to India will have to pay taxes, adding that the move back was motivated by an expectation of higher valuations when listing in India. This taxation, as observed in PhonePe’s case and also alluded to by Goyal, could potentially discourage companies from moving back to the country. According to the ET report, the tax implications of Groww’s shift back to India have not been ascertained yet.

    Potential reasons for Groww’s transition back to India:

    Groww had been considering moving back to India amidst tighter regulations in the US, according to an EnTracker report from September last year. Besides this, other reasons that have been cited for re-flipping include a desire to list on the Indian stock exchange and that instead of foreign domicile companies, startups based out of India are the ones that are more likely to be funded.

    Also read:

    The post Fintech Company Groww Completes Shift of Headquarters Back to India appeared first on MediaNama.

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