New Delhi: India will take around six months to announce the rules that enable companies to register abroad, take longer than expected as the Ministry of Finance, issues related to taxation, two government officials and four industrial sources to Reuters .
Delays tended to reduce investor expectations such as Global Tiger, Sequoia Capital, Lightspeed and many Startup India last month urged Prime Minister Narendra Modi to quickly announce the rules governing a foreign list of almost a year ago.
Two senior government officials said the rules would only be announced with February federal budget because there was no decision on how the government had to impose large investor taxes and retail traders when they traded abroad.
The main concern is to ensure that venture capital and foreign investors pay the same long-term capital increase tax – about 10% – even if they are out of Indian companies listed on foreign exchanges such as the Nasdaq, say six sources are familiar with this discussion .
Three Industrial Sources said that to convince the government, several investors, trader bankers and startups have suggested that the exit of investors from Indian companies that might list abroad can be taxed according to the Indian law, if investors have significant share ownership 10-20 %.
A senior government official said: “We have not reached the final decision or decide on the structure …
we want to get tax if there is an investor out, it doesn’t matter where he plans to register.” Ministry of Finance, who worked on new rules, did not respond to a comment request.
Another concern that the government’s tried is whether it can collect taxes from foreign retail investors in India stocks listed abroad, but have decided to free the transaction, said two government officials.
The rules although will clarify that Indian citizens that produce profits in the trade abroad will be responsible for the taxation in accordance with local law, he added.
The controversial subject, the debate came as a local company saw a better prospect that they could achieve a major assessment with a domestic list after a star debut in Indian guidance from a food delivery company supported by the Zomato ant group that appreciated $ 13 billion.
But many investors and startup want foreign listing choices because they say the company gets better capital access and a higher assessment.
About 22 Investors and Top India Startup urged Modi in July letter to accelerate the rules of foreign listings, calling it “unfinished reform agenda”.
“Further delays in the rules will damage the startup ecosystem because many companies are on the verge of deciding their foreign list plans,” said a source of the venture industry.
Register overseas is a controversial subject in India.
His opponents include Swadesh Jagran MANS – the economic wings of the ideological parent party in power mode – who worries the list will more meaning the supervision of Indian regulations on domestic companies and can achieve the ambition of capital market growth in India.
“Indian investors will not get (which) the same access to these companies if they only register abroad,” said Co-Convener Ashwani Mahajan Group told Reuters.
The London Stock Exchange told Reuters last year said it was in talks with several Indian technology companies on the list of foreign countries.