Flying Cars / Drones in India :: Legal ramifications

Came across this article today 

https://www.business-standard.com/india-news/will-air-taxis-fly-between-delhi-and-gurgaon-soon-here-is-what-we-know-124050600166_1.html

1/ Flying cars are no longer just a concept from science fiction. With rapid advancements in technology, they are becoming a reality faster than we anticipated. 

However, this raises important questions about the legal ramifications, especially in the Indian context. 🇮🇳🚗💨 #FlyingCars

2/ Flying cars are more akin to drones than helicopters, which means that existing regulations may not be directly applicable. As these vehicles take to the skies, it is crucial for the government to catch up on the regulatory front to ensure public safety. 🏛️📜 #Regulations

3/ One of the key aspects of flying cars is the integration of AI to ensure predictable flight paths and routes. AI can help maintain desired trajectories and make necessary adjustments in real-time, enhancing the overall safety and reliability of these vehicles. 🚀🧠 #AIDrones

4/ However, even with AI, the question of accountability arises in case something goes wrong. Who will be responsible for laying down safety standards? Will it be the manufacturers, operators, or government bodies? Clear guidelines need to be established. ❓🔍 #Accountability

5/ It's important to remember that anything in the air poses a far greater hazard than vehicles on roads or rails. A single mishap can have severe consequences. Therefore, strict safety standards and protocols must be put in place to mitigate risks. 🛡️⚠️ #SafetyFirst

6/ Despite the challenges, one thing is certain: flying cars are going to become a reality, and it will happen sooner than we think. Governments and regulatory bodies must act swiftly to keep pace with this technological advancement. 🌍🔜 #FutureOfTransportation

7/ As we embark on this exciting journey, collaboration between industry experts, policymakers, and the public will be essential to ensure that flying cars are integrated into our lives safely and efficiently. 


Flying Cars: The Future in India - Legal ramifications

SME IPO Boom: Startups need to tread carefully

The surge in SME IPOs is undeniable. Google Trends shows a **40% increase in "SME IPO" searches** over the past year alone. But let's dig deeper and see what the data tells us:

* **Funding Needs:** A recent PwC study found that **68% of SMEs** consider going public to access growth capital.


* **Performance:** A KPMG report indicates that **SME IPOs outperformed larger listings** in terms of first-day returns in 2022.

**However, challenges remain:**

* **Volatility:** Smaller companies are often more susceptible to market fluctuations, leading to **higher stock price volatility.**
* **Regulatory Burden:** The increased scrutiny and compliance requirements can be a significant burden for SMEs.

* **Long-Term Sustainability:** Maintaining growth and profitability post-IPO is crucial to avoid becoming a "one-hit-wonder."

**The Verdict?** 🤔

The SME IPO route offers exciting opportunities for growth, but it's not without its risks. Thorough due diligence and a solid post-IPO strategy are essential for success.

**#SME #IPO #DataDriven #Investing #MarketTrends**

Navigating the SME IPO Boom

Blockchain: Beyond the Hype, Embracing the Tech While Governments Frown on Tokens

Despite government skepticism, blockchain technology is quietly transforming industries around the world.

Let's explore its adoption and how we can find common ground between innovation and regulation.

Beyond Buzzword, Embracing Real-World Utility:

Blockchain offers unique advantages:

• Enhanced Security & Transparency: Data is tamper-proof and traceable, boosting trust and efficiency.

• Streamlined Processes: Automation and reduced paperwork save time and costs in various sectors.
• Decentralization: Power and control are distributed, fostering collaboration and innovation.

Early Adopters Leading the Way:

While governments tread cautiously, various sectors are embracing blockchain:

• Supply Chain Management: Tracking goods from origin to consumer with greater transparency and traceability (e.g., Walmart, Unilever).

• Financial Services: Faster and more secure settlements, trade finance solutions, and KYC/AML compliance (e.g., JPMorgan Chase, DBS Bank).
• Voting Systems: Secure and verifiable voting processes, reducing fraud and increasing voter confidence (e.g., Estonia, West Virginia).

India's Blockchain Journey: A Mixed Bag

• Limited adoption in government bonds and securities settlement (e.g., Bondsindia, BSE StAR MFX).
• Regulatory uncertainty hinders wider exploration.
• Pilot projects in trade finance and land registry signal potential.

Governments: Wary but Watching

• Concerns about money laundering, financial instability, and consumer protection drive their caution.
• Regulations are emerging, often focusing on token projects rather than the underlying technology (e.g.

, India's PMLA inclusion of virtual assets).
• Openness to exploring blockchain's potential for specific use cases under controlled environments.

The Future of Blockchain: Finding Common Ground

• Collaboration between governments, businesses, and tech communities is crucial.

• Developing clear regulations that foster innovation while mitigating risks is essential.
• Focus on real-world applications that address specific problems and demonstrate tangible benefits.

Share your thoughts! #blockchainadoption #futureoftech #responsibleinnovation

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/PSpKscJ

Blockchain: Transforming Industries Amidst Government Skepticism

Thread: Indian Startups & Listing on Domestic Stock Exchanges - A Regulatory Odyssey

Before 2024:

• 🇮🇳 Indian companies happily listed at home (think NSE & BSE).
• Global companies cannot list in India.
• Indian listed companies?

Free to list abroad directly on certain recognized foreign exchanges, as long as they followed the rules (ADR / GDR).
• Unlisted Indian companies?

Stuck, no overseas listings for them.

January 2024: GAME CHANGER!

• ✨ Unlisted Indian companies can now skip the domestic listing step and head straight to GIFT City for their big debut!
• Hold on, what about listed Indian companies?

Framework for GIFT City not ready yet, but it's definitely on the way.

Now, NASSCOM throws down the gauntlet with a bold proposal:

• Let "flipped structures" (think Indian startups with HQs abroad) list directly on domestic stock exchanges! Why?

This aligns with the government's recent shift towards more liberal policies.
• But is it a done deal? Not so fast. The government might have mixed feelings about capital flight.

My two cents:

• Don't expect a sudden stampede.

The government is more interested in attracting foreign capital, not sending Indian money overseas.
• Those flipped structures? They might find the path to domestic listing a bit bumpy.
• Setting up your HQ abroad?

Fine, but don't expect easy access to Indian public money.
• However, the government won't completely block your global ambitions.

Just be prepared to play by their rules.  Bottom line:  • The regulatory landscape is changing, but expect cautious steps, not a full-blown revolution. • For flipped structures, the road to domestic listing might be long and winding.

Stay tuned for further updates!

Check out NASSCOM's proposal here: https://epaper.indiatimes.com/article-share?article=31_01_2024_020_001_etdc_ET: https://epaper.indiatimes.com/article-share?article=31_01_2024_020_001_etdc_ET

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/2UyaXoK

Indian Startups & Listing on Domestic Stock Exchanges: A Regulatory Odyssey


Liquidation Preference Gotcha: Angels Left Holding the Empty Bag at Exit

Remember that sweet startup you invested in years ago? Turns out, it might not be "all aboard" when it comes to exit payouts.

Here's a real-life case study about how liquidation preference can leave Angel investors feeling, well, angelically disappointed.

The Scenario:

• Angel investors put in $3M in two rounds: $5M & $8M.

• Institutional investors swoop in later with $20M, but at TWICE the liquidation preference (fancy term for who gets paid first during an exit).

They snag seniority too.
• Exit happens at $20M.
• Guess who walks away laughing? Institutional investors pocket a cool $14M ($7M invested x 2x preference).
• Angel investors?

They get their original $3M back, while Founders scoop up the remaining $3M.

Key Takeaway:

Just because you invested early at a lower valuation doesn't guarantee a proportional payout.

Those fancy investor terms like liquidation preference and seniority can seriously shift the scales at exit.

⚖️

So, should you ditch solo Angel investing and join the "investment fund club"?

There's no golden answer, but consider this:

• Dictating terms as an individual investor is tough.

Funds have more clout.
• But joining a fund means sharing returns (and control).

Be a team player, or fly solo?

The bottom line:

• Do your homework on investor terms, especially liquidation preference and seniority.
• Understand the potential risks and rewards of both individual and fund investments.
• Remember, startup investments are inherently risky.

Buckle up for a wild ride!

#startupinvesting #angelinvestor #liquidationpreference #exitstrategy #VCdeals #startuptips

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/mGPuMWm

Liquidation Preference: Angel Investor Disappointment

"Decoding the Dilemma: Indian Investors' Options in Global Startup Investment Post-Regulatory Shift"

1. Direct Individual Investment in Overseas Startups:  •

Limited options as most early-stage investments are in CN and SAFE, preferred for avoiding extensive documentation and valuation discussions in priced rounds.

• Direct investments in equity, preferred stock, or convertible debentures become less feasible due to these complexities and the preference for simpler instruments.

2. Using SEBI-Registered Vehicles like AL/LV from India:  • Delays in SEBI approval can result in missed investment opportunities. • Additional costs involved, such as future carry sharing and management fees, make this option less attractive.

• These vehicles provide a structured approach but at the cost of agility and financial efficiency.

3. Investment Through Domestic SPVs like LLPs:  • Although this method consolidates investment into a single entity on the cap table, the issue with CN and SAFE instruments remains unresolved.

• Offers organizational benefits but doesn't circumvent the regulatory restrictions on preferred early-stage investment instruments.

4. Setting Up Overseas SPVs via SPV Platforms:  • This option is now virtually inaccessible for Indian investors due to regulatory clampdowns. • RBI’s focus on bona fide business activities excludes many previously used investment structures.

• The shift marks a significant constraint on the flexibility Indian investors previously enjoyed.

5. Investing Through Regulated Funds Set Up Overseas:  • Options are limited and akin to investing in specific deals through structures like LV and AL in India.

• While providing a route for global startup investment, these funds are constrained by availability and specific deal alignment.
• Represents a structured yet narrow pathway for Indian investors looking for global exposure.

Hash Tags: #GlobalStartupInvestment #IndianInvestors #RBIRegulations #SEBI #StartupFunding #InvestmentChallenges #VentureCapital #FinancialCompliance #CrossBorderInvestment #StartupEcosystem

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/5xOdCC9

Options for Indian Investors in Global Startup Investment

Foreign Investors in India: Brace for Data Scrutiny 🇮🇳

Heads up, overseas investors! Notices are popping up in your mailboxes, and it's not just friendly reminders.

The Indian government is weaving a data web, and you're part of the pattern.

Here's the lowdown:

• PAN Card: Mandatory for Investment - No more flying under the radar.

Even if filing returns isn't mandatory yet, a PAN is becoming the passport to Indian investments.

• SFT Returns: Tracking Shares - Companies, get ready to dish about share allotments.

Penalties await those who keep mum.

• ROC & RBI: Double Data Capture - Every investment gets reported to multiple authorities, leaving no stone unturned.

• Profiling Investors: Notices Start Flying - With a clear picture of who's investing what, where, and when, the government's starting to knock on doors.

• Demat on the Horizon: AIF units are just the beginning.

Every private company might soon be wearing the demat badge.

• Power in the Hands of Data: Imagine the government holding the reins of your investments.

Like in case of data digizitization in MCA - Directorship details, company linkages – everything's traceable.

• AI-powered Scrutiny: The Future is Now - Automated notices are just the tip of the iceberg.

Get ready for deep data analysis and targeted interventions.

What's next?

• Global Data Sharing: Individual countries might access your Indian investment data through APIs. Privacy concerns, anyone?

• The Bigger Picture: This data mosaic is being built for a reason.

Regulatory oversight, fraud prevention, and investor protection are just some possibilities.

Call to Action:

• Stay Informed: Keep up with the evolving regulations and compliance requirements.

• Transparency is Key: Open communication with authorities is crucial to avoid any headaches.

Remember, the Indian investment scene is changing.

Embrace the data revolution, stay compliant, and ensure your ventures thrive in this new era of transparency!

#ForeignInvestmentIndia #DataScrutiny #RegulatoryLandscape #AIRevolution #InvestSmart

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/09FyMay

Data Scrutiny for Foreign Investors in India

** High-Level Tax Woes for Flips: A Holding Company's Guide ⚠️**

Planning a Flip holding structure? Buckle up for these tax bumps:

1️⃣ Place of Effective Management (POEM): Founders abroad?

Holding co.'s taxes might haunt you back home! ✈️

2️⃣ Permanent Establishment (PE): Careful with those agents closing deals! They could trigger local taxes where they operate.

3️⃣ US Tax on Global Intangible Low-Taxed Income (GILTI): Subsidiary profits?

Uncle Sam might want a slice, even if you're not in the US. 🇺🇸

4️⃣ Base Erosion and Profit Shifting (BEPS): Global minimum tax looming? Check if your holding structure is safe. ⚖️

5️⃣ Transfer Pricing: Licensing those juicy IPRs?

Pricing matters - tax authorities in both countries will scrutinize! ⚖️

6️⃣ Flipping Jurisdictions: Not so fast! Moving your holding co.

can trigger transfer pricing and other tax headaches. ⚠️

7️⃣ GST & Transfer Pricing: Between-companies transactions may require "reverse charge" GST.

Don't get caught napping! 

#Flips #HoldingCompanies #TaxPlanning #GlobalTax #TransferPricing #GST #Startup

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/uHTu6sx

Navigating Tax Challenges for Flip Holding Structures


Thread: Start-up Comedy of Errors: RBI & AD Banks Hold the Punchline

My recent review of a pre-August '22 structure got me tangled in a hilarious mess created by RBI & AD Banks ignoring this elephant in the room.

Buckle up!

The Setup:

• Indian & overseas investors poured money into a holding company abroad, with an Indian subsidiary.

• Some Indian investors invested directly in the Indian company, hoping for sweet returns from the holding company.

• And guess how this whole thing was built? Gifting by founders, of course!  as that was the only option available at that time


The Plot Thickens:

• An Indian AIF wants to buy shares from these investors, both Indian & foreign.

• But here's the twist: SEBI needs approval for buying overseas shares, no matter who's selling.

‍♀️
• Even if we forget the AIF, any resident buyer needs to file an ODI form with an AD Bank for buying from another resident.

• Except AD Banks are like, "Nope, not for structures built on gifting!" ‍♀️

The Punchline:

• Resident buyers are stuck in a Catch-22:

buy from residents (AD Bank says no), buy from foreigners (SEBI / AD Bank says no).

The only escape for resident investors? Sell to foreigners!

• Also - Residents can't even invest fresh in the overseas company thanks to the gifting route.

It's like a one-way trip with no return ticket. ️

• So the only option left is some convoluted restructuring involving parent company buyouts and fresh issues at the Indian subsidiary. Cue the paperwork avalanche!

The Serious Side:

This isn't just a laugh riot, folks.

It's a big problem in the face for countless pre-August '22 startups. They're trapped in this regulatory limbo, unable to exit or grow.

The Call to Action:

• Someone in authority needs to wake up and smell the coffee!

We need a clear path out of this mess, even if it involves some (painful) adjustments.
• A clean-up process, maybe with some penalty fees, is better than leaving these startups in purgatory.

• And before the taxman joins the party, let's figure out a way to make this restructuring tax-neutral. Let's not add fuel to the fire!

Tag anyone who holds the key to unlocking this comedy of errors.


#TwitterThread #Startups #India #RBI #SEBI #ADBanks #Gifting #Investment #Regulation #ComedyOfErrors #CleanUp #Restructuring #Tax #CallToAction

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/o7ucFaQ

Start-up Comedy of Errors: RBI & AD Banks

Deciphering India's Tax and regulatory Compliance Web: Scrutinizing Overseas Investors and Building a Data-Driven Regulatory Ecosystem

PAN Requirement and Compliance Responsibility:

• Overseas investors/funds investing in India now required to obtain a PAN, placing compliance responsibility on investee companies.

• This PAN requirement is crucial for tax purposes, especially during exits due to capital gains taxation in India.

SFT Returns and Penalties:

• Indian companies must file SFT returns detailing share allotments to foreign investors, with penalties imposed for non-compliance.
• This ensures transparency in foreign investments and aligns with global compliance standards.

Data Points Capturing and Investor Profiling:

• Investments from abroad are meticulously tracked through ROC filings and RBI's FC-GPR, capturing a wealth of investment data.

• The government uses this data, including investment date, amount, and entity details, to profile overseas investors.

Impact of Share Dematerialization:

• The government's push for dematerializing shares in private companies and AIF units signals a move towards tighter control.

• This step could lead to increased government oversight, similar to the linking of company directors' details with DIN and CIN.

Potential Future Developments:

• With the comprehensive data repository, the government might leverage AI for more sophisticated data analysis and automated notices.

• Future frameworks could enable international data sharing, enhancing global regulatory compliance and oversight.

Implications for Global Investors:

• These regulatory changes signify a more interconnected and data-driven investment landscape.
• Foreign investors must navigate this evolving environment, understanding the implications for their investment strategies.

Hash Tags: #CrossBorderInvestment #TaxRegulations #India #GlobalInvestors #FinancialCompliance #RegulatoryChanges #Taxation #AI #DataAnalysis #InternationalFinance #InvestmentTrends #CorporateGovernance

You can read the unrolled version of this thread here: https://typefully.com/Akhil_fca/j4XUdcM