Nasscom fears job & revenue loss as IT start-ups register overseas avoiding barriers
Updated: Apr 09, 2014 05:50:50pm
Bengaluru, Apr 9 (KNN) Disappointed with procedural hassles, several start-ups in the IT sector are registering themselves overseas to attract investments to avoid regulatory hindrances and unfavourable tax policies over which the Information technology (IT) industry lobby group Nasscom has expressed concern.
A large number of technology start-ups are registering themselves overseas each month, to save on high taxation and to attract foreign investment.
Nasscom fears that if the companies register themselves overseas, it will lead to a loss in jobs. Also, there will be revenue loss to the Indian IT sector from these start-ups.
"We are extremely concerned over the trend of Indian start-ups moving their legal entities overseas whereas their main delivery operations are still based in India. Our immediate focus for this year is to build a series of recommendations to ease the rules for registration, taxation and operation of small companies in India," said a media report quoting President of Nasscom R Chandrashekhar.
"A start up with Rs 5 crore revenue can't be clubbed with same rules of taxation, and operations which apply to a Rs 50,000 crore company. We will work with the new government to resolve this issue in the coming months," said Chandrashekhar, on the side-lines of an event of Nasscom.
Further, Nasscom is in talks with governments of Maharashtra and Tamil Nadu to set up 'start-up warehouses' for incubation of start-ups.
Under its '10,000 Start-Ups' initiative, Nasscom had launched its first 'start-up warehouse' in Bangalore in August 2013, in partnership with the Karnataka government. Under the partnership, the state government had provided 10,000 sq feet of space for housing the warehouse, while Nasscom has brought in programmes, expert teams and mentors for start-ups. The warehouse has capacity of around 70 seats with round-the-clock power back-up, a leased internet line and four meeting rooms.
The warehouse provides start-ups office space (up to five people per start up) for up to six months, which can be renewed for another six months. Nasscom believes it helps in creation of micro-ecosystems for entrepreneurs to engage with each other, and share their learnings and best practices. (KNN/SD)
A large number of technology start-ups are registering themselves overseas each month, to save on high taxation and to attract foreign investment.
Nasscom fears that if the companies register themselves overseas, it will lead to a loss in jobs. Also, there will be revenue loss to the Indian IT sector from these start-ups.
"We are extremely concerned over the trend of Indian start-ups moving their legal entities overseas whereas their main delivery operations are still based in India. Our immediate focus for this year is to build a series of recommendations to ease the rules for registration, taxation and operation of small companies in India," said a media report quoting President of Nasscom R Chandrashekhar.
"A start up with Rs 5 crore revenue can't be clubbed with same rules of taxation, and operations which apply to a Rs 50,000 crore company. We will work with the new government to resolve this issue in the coming months," said Chandrashekhar, on the side-lines of an event of Nasscom.
Further, Nasscom is in talks with governments of Maharashtra and Tamil Nadu to set up 'start-up warehouses' for incubation of start-ups.
Under its '10,000 Start-Ups' initiative, Nasscom had launched its first 'start-up warehouse' in Bangalore in August 2013, in partnership with the Karnataka government. Under the partnership, the state government had provided 10,000 sq feet of space for housing the warehouse, while Nasscom has brought in programmes, expert teams and mentors for start-ups. The warehouse has capacity of around 70 seats with round-the-clock power back-up, a leased internet line and four meeting rooms.
The warehouse provides start-ups office space (up to five people per start up) for up to six months, which can be renewed for another six months. Nasscom believes it helps in creation of micro-ecosystems for entrepreneurs to engage with each other, and share their learnings and best practices. (KNN/SD)
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