Cayman could be in line for an influx of tech company start-ups from India, experts from the region have said.
The country’s prestigious Economic Times newspaper said Cayman was being eyed by entrepreneurs as a top spot to tap into capital markets, abroad as well as in India.
The news was well received by Cayman industry bodies, who said that the islands would welcome new businesses.
Somshubhro Pal Choudhury, co-founder and partner in the Bharat Innovation Fund, told the paper, “The US investors appear increasingly comfortable with Cayman Islands as a parent entity, with subsidiaries in India or the US or other countries as required, given its flexibility in managing complex global footprints.”
The article added that Indian experts said Cayman was “a region of interest” for software-as-a-service (SaaS) companies seeking global expansion.
It added that Indian industry insiders said global venture capital firm Accel was among those who had asked SaaS start-ups in its portfolio to register in Cayman.
Ashitha Bhagwan, managing partner at Inventus Law Technology Partners, said, “Cayman Islands has emerged as a region of interest in the past year for Indian startups that are building global software products who want to have the flexibility of listing in India, US or a future dual listing.
“This has come on the back of investors’ push as Cayman Islands is a neutral territory, making it easier for startups, who want to move to India or US, based on their growth road map down the line.”
The article added that Cayman registry meant that companies were exempt under the country’s income tax legislation and that Cayman did not tax capital gains, unlike the US.
Although a boom in business from India is yet to materialise, Cayman is well-placed to accommodate newcomers.
A spokeswoman from Cayman Enterprise City said, “Registrations from the Indian market have held steady in recent years; we have not yet seen a notable uptick in new enquiries or new registrations from the region.”
But she added, “We welcome innovative, knowledge-based businesses – from India or any other jurisdiction.
“If interest from India were to grow, our team would guide prospective companies through the licensing process regulated by the Special Economic Zone Authority, connect them with Cayman-based service providers, and work to ensure that their presence strengthens the wider community, all while supporting high-impact workforce development initiatives.”
Steve McIntosh, CEO of Cayman Finance, said the organisation did not hold information on Indian companies specifically, but that there were several reasons why companies from there would look at the jurisdiction as a base.
“First, there is the ability to raise capital from around the world without the complications of double taxation, which would be a barrier to doing so in most other countries,” he said.
“As with our funds industry, each investor pays tax on distributions in their home jurisdiction without worrying about how it conflicts with ours.
“This is also a benefit when it comes time for an investor or entrepreneur to exit.”
McIntosh added that Cayman-based companies could set up subsidiaries in its chosen markets without the need to worry about tax implications for the parent firm.
“It is much easier to attract the talent from Cayman and around the world,” he said.
“Both Cayman Enterprise City and Tech Cayman run programmes to attract and develop local talent while providing expedited work permit processing for companies that need to bring talent in.”
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