PhonePe investors paid Rs 8000 crore tax to shift base

BENGALURU:  PhonePe investors have paid Rs 8,000 crore in tax to shift its domicile from Singapore to India. During a live session on YouTube, the fintech company’s co-founder and CEO Sameer Nigam said, “If you want to move to India as a domicile, you have to do a fresh market valuation and pay tax on the delta.” He said, “If you want to move from any other market to India as a domicile it is treated like a capital gains event for existing investors.”

Already 20 odd unicorns have reached out to us asking how do we get this changed.. the engagement is happening with highest levels in government as well to make it easier for businesses to come back, he said, stressing on the need for more progressive laws that allow start-ups to move back to India.

Apart from taxes, another challenge that the company faced was to convince several thousand employees that their ESOPs (employee stock option plan) are back to zero vesting at a one-year cliff, because law in India says if you migrate, you have to start with a new one-year cliff. “It’s very hard for start-ups to convince employees that their ESOP vesting status reverts back to zero,” he said.

Following its separation from Flipkart, the company raised $350 million recently at a $12 billion valuation. PhonePe moved all businesses and subsidiaries of PhonePe Singapore to PhonePe Pvt Ltd - India directly. Talking about the recent fund raising, Nigam said, “General Atlantic is a really good blue chip global investor that has a long view on companies, which gives us the flexibility to be able to actually do at-scale investments in new sectors like insurance, lending, broking or ONDC.”