19 Sept 2023
International Financial Services Centres Authority (IFSCA) set up an International Financial Services Centre (IFSC) in Gujarat to stop Indian startups from setting up headquarters in foreign locations.
PhonePe shifted its headquarters back home from Singapore last year, and up to 20 Indian startups are planning to follow suit. Among those who are interested in ‘Desh Wapsi’ or reverse flipping are Groww and Razorpay. These companies set up their base abroad due to high taxes, unsupportive business environment, mandatory guidelines from investors like Y Combinator, and ineffective Intellectual Property Laws.
That’s when IFSCA’s International Financial Services Centre was set up in GIFT City, Gujarat. The Gujarat International Finance Tec-City (GIFT City) is a foreign territory in India, offering tax exemptions and simplified financial norms. The 530+ startups registered there can transact in foreign currency, move their capital and investments in and out of India, and enjoy a business-friendly environment with access to venture capitalists and fintech centres.
SEBI, RBI, Pension Fund Regulatory and Development Authority (PFRDA), and Insurance Regulatory and Development Authority of India (IRDAI) regulate GIFT City’s functioning.