Government plans to make fund raising for startups easy4 years ago Shalini B
“When someone works towards triumphing a goal with sheer determination, the whole world strives to walk along with you to achieve your aspirations.”
Same is the case with all those entrepreneurs who wake up with a dream in the mind and zeal to achieve it. To encourage these determined people, even the Government has been actively taking positive steps ahead to help these budding entrepreneurs turn their dreams into reality.
With Modi’s “Startup India” campaign, the entire startup eco – system came into the limelight. All thanks to this campaign, the people who did not know what a startup is, knew all about them post our Hon’ble PM’s speech at the launch of the campaign a few months ago. One important announcement during that speech was to ease – out the fund raising process for startups. In lieu to that decision by the Government of India, it has been revealed by sources that the Ministry of Finance has been in consultation with other agencies about rules related to wholly owned subsidiaries and joint ventures of companies investing back in India.
Entrepreneurs have been considering the foreign market ideal for their venture to take advantage of tax rules. Observing this pattern, the Government now is examining if there is a need to clarify on taxation of convertible instruments which has also been an issue raised by the startup community.
By trying to ease – out on fund raising, the Government aims to streamline the setting up process for startups, including certain basic important yet time taking processes such as filing requirements for compliance with FEMA. The Government has also been working on simplifying the regulations laid on foreign venture capital investment in the nation. Eminent agencies including SEBI and RBI have been roped into this matter and they are also trying extensively to make changes in the system of external commercial borrowing.
Apart from all the tries of the Government, it has gone a step ahead and announced a package, including tax waiver for startups for 3 years, though a minimum alternate tax would be applicable. In addition to this waiver, there are other few other relaxations made in the existing rules.
“This is a continuously evolving process and we are trying to see how the rules can be made easier and more attractive for entrepreneurs,” said an officer. The businessmen claim that it takes years to set their business in a manner to be able to make profits, and though the tax waiver is an advantage, yet the minimum tax would still not eradicate their entire problem.
Now since the Government has taken its foot forward, it’s sure going to be advantageous in some way to the eco – system. Though there are still some issues to be sorted out, I am sure the day is not very far when lot more things are going to turn in favour of this growing clan of startups.