Pine Labs Approved to Relocate Base to India By Singapore Court

Pine Labs Approved to Relocate Base to India

Three points you will get to know in this article:

  • Pine Labs approved to merge Singapore and Indian entities, transferring all to Indian subsidiary.
  • Pine Labs, PhonePe, and Groww relocate HQ to India for regulatory benefits.
  • Pine Labs valued at over $5 billion but IPO plans delayed, potential tax issues like PhonePe investors.

Amalgamation of Pine Labs' Singapore and Indian Entities

Pine Labs, a prominent commerce and payments platform for merchants, has been granted approval by a Singapore court for the amalgamation of its local entity, Pine Labs Limited (PLS), with its Indian counterpart, Pine Labs Private Limited (PLI).

As per the regulatory filing made by PLS in Singapore, the entire business operations, along with assets and liabilities, will be transferred and vested in PLI in accordance with the terms outlined in the amalgamation agreement.

Upon the completion of the arrangement, all shareholders affiliated with PLS (Singapore entity) will transition into shareholders of Pine Labs Private Limited (PLI), and any ongoing legal matters concerning PLS will be seamlessly assumed by PLI. According to the filing, subsequent to the order from the National Company Law Tribunal (NCLT) submitted to the Registrar of Companies, the dissolution of the Singapore entity will be executed without undergoing liquidation procedures.

Pine Labs offers an array of solutions and services tailored for merchants, encompassing cloud-enabled point-of-sale terminals, gift management, and credit facilities.

Fintech Pioneers Relocating Headquarters to India

Joining the ranks of fintech pioneers like PhonePe and Groww, Pine Labs has transitioned its headquarters to India from abroad, marking it as the third company to do so. This move aligns with a broader trend, with several other fintech enterprises, including KreditBee, Razorpay, Meesho, and Zepto, actively pursuing similar shifts to establish their primary entities in India. Notably, Flipkart has also recently made headlines for relocating its operational base from Singapore to India, underscoring the growing significance of the Indian market in the global fintech landscape.

Valuation and IPO Plans

In April, Baron Funds and Invesco, prominent investment firms based in the US, revalued Pine Labs at $5.8 billion and $4.8 billion, respectively. It’s significant to highlight that these valuations play a pivotal role in determining the extent of tax obligations when shifting domicile.

Pine Labs has been actively pursuing initial public offerings for several years. Despite finalizing bankers for a US IPO last year, the plans didn’t materialize, and the firm hasn’t disclosed a definitive timeline for listing on stock exchanges.

Tax Implications of Domicile Shifts

Recent trends in the fintech industry underscore a preference for Indian headquarters, given the regulatory advantages in diligence and monitoring. However, such transitions entail substantial tax liabilities, exemplified by PhonePe’s investors who paid Rs 8,000 crore in taxes to facilitate the process.

Pine Labs, a prominent fintech platform, has received approval to amalgamate its Singapore and Indian entities, transferring all operations, assets, and liabilities to its Indian subsidiary. This move aligns with a broader trend of fintech companies, like PhonePe and Groww, relocating their headquarters to India to leverage regulatory advantages. While Pine Labs has been valued at over $5 billion, its IPO plans have not materialized yet. Such domicile shifts, though advantageous, can also entail substantial tax liabilities, as seen with PhonePe’s investors paying significant sums. Overall, Pine Labs’ transition underscores India’s growing prominence in the global fintech landscape.

Peenak Maheshwari

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