YFFP was proud to host Mr. Abhyudaya Agarwal, Founder of iPleaders in an intellectually stimulating conversation regarding on ground realities concerning establishment of businesses especially startups and mechanisms of export and import.
The initial discussion largely focused on entrepreneurship. Mr. Abhyudaya informed those present at the event, a few of them being budding entrepreneurs, that startups could choose Limited Liability Partnership over the Private Limited Company, a form of business being increasingly adopted by law firms, designers etc. as it posed less risk in terms of liability.
He spoke about how various popular companies such as Facebook and Google, which have international operations and revenue collection, base their international headquarters (in this case Ireland) in countries where tax rates are less and ensure a friendly business environment.
A lot of students were interested in knowing about advantages of listing a business abroad. Mr. Abhyudaya responded that, if the business had a broad international reach, then it could base its headquarters and operations abroad so that there is access to intelligent human capital coupled with receiving funds from a wider pool of investors. The ease of doing business and the tax laws implemented in the country also hold importance while taking a decision about the same. Singapore is a country which provides easy access to capital and that’s why a lot of companies get listed there instead of being listed in the domestic market.
An interesting piece of information regarding double tax agreements was also shared. He informed us that maximum foreign investment in India comes from Mauritius since they have a provision in the double tax agreement with India, which guarantees the investors the benefit of 0% tax on their capital gains.
Describing the intricacies of international trade, Mr. Abhyudaya made us aware of how even individuals were contributing to import and export at a personal level. This was substantiated with an example about how an order being placed on ebay.us was essentially an import. He shed light on the fact that exporters from India supplying to countries like Bangladesh had been a victim of fraudulent letter of credits which resulted in incurring of huge losses since the importer was not traceable and in a lot of cases the bank didn’t exist. He elucidated the complications related to international trade. The need to comply with exporting laws of domestic country and importing laws of foreign country is one such complication. For example, in case of the Pharmaceutical Sector, when an Indian company exports drugs to the USA, they have to meet requirements of US Food and Drug Administration before they can be traded in the market. These regulations can be about standard of medicine or even the working conditions in which medicine was manufactured.
He expounded on the advantages and disadvantages of functioning in a Special Economic Zone and the importance of political stability within the foreign country when a prospective investment decision in that particular country is being considered. The enriching talk came to a close with Mr. Abhyudaya enlightening us with his views on what India will be like in 2017. According to him by 2017, more than 50% of India’s population will be living in cities which will lead to an explosion in the services sector along with an extensive reach of data connectivity.