Lighthouse Canton Insights Podcast - EP 7: Beyond InHERitance - A Global Citizen's Guide to International Business Strategy & Wealth Management

This podcast was recorded on 17 October 2024 and was prepared based on the information available on the date of recording.
Lighthouse Canton’s Insights Podcasts brings to you this mini-series “Beyond InHERitance” exploring women's perspectives on finance and family legacy.

In this episode, we dive into the incredible journey of Prabha Srinivasan, a global entrepreneur and trailblazer in the world of finance. Starting her career as a chartered accountant in India, Prabha’s journey took her across the world, from the U.S. to India, and ultimately led her to found Ventura Pranas, a firm that combines international expertise with local insights.

Prabha opens up about her experiences navigating different business cultures, merging the meritocratic values of the U.S. with the familial bonds of India, and the lessons that shaped her business model. She also shares her invaluable advice for entrepreneurs looking to establish global businesses and the complexities of cross-border taxation. As a woman in leadership, Prabha discusses the challenges of balancing professional aspirations with personal responsibilities, the importance of resilience and adaptability, and how she actively supports the next generation of female finance professionals.

Tune in for a conversation filled with insightful advice, career lessons, and practical tips on building a successful, global business — and how women in finance and taxation can make their mark in an evolving landscape.

Transcript

Intro:
Hello and welcome! You're listening to the Lighthouse Canton Insights Podcast. This series is brought to you by Lighthouse Canton, a global investment institution that provides wealth and asset management services to accredited investors.

Here on this podcast, we look to shed light on the market developments and share strategic insights to help you navigate the global investment landscape.

In each episode, we'll be bringing you conversations from leading experts in various fields, including Lighthouse Canton's own investment team and specialists.

00:46

This podcast was recorded on 18th of July 2024 and was prepared based on information available as of the date of recording. Please stay tuned for the important information at the end of this episode.

Host: 00:57
Welcome to the Lighthouse Canton Insights Podcast series on Women of Power, where we share inspiring stories of resilience and reinvention.

Today, we explore the journey of Prabha Srinivasan, a trailblazer who has navigated diverse paths with determination.

Starting with a career in India as a chartered accountant, Prabha's life took a turn when she relocated to the US after marriage. There she earned her CPA and ignited her passion for international work at a small firm.

Her quest for growth led her to Arthur Andersen, where she quickly realized that the large firm environment didn't align with her values. She craved personal client interactions and the ability to solve problems holistically. A subsequent move back to India allowed her to establish a subsidiary for a California firm, transforming her understanding of business.

In 2011, she founded Ventura Pranas, merging the meritocratic spirit of US with the familial bonds of India. Today, Prabha leads a practice that connects global expertise with local insight, showcasing the power of perseverance and adaptability. As India rises on the global stage, so does Prabha's glory, a testament to the power of perseverance, adaptability and vision.

Join us as we uncover the remarkable journey of Prabha, a true embodiment of how embracing change can lead to extraordinary success. A very warm welcome, Prabha, to the Lighthouse Canton Podcast series on women.

Prabha - 02:38
Thank you, Ratna, such a pleasure to be here.

Ratna - 02:41
Shall we begin by getting some insight about your journey of becoming a global stroke international citizen and entrepreneur? And what are your learnings which have led you to build your current business model?

Prabha - 02:54
Absolutely Ratna, first of all, thank you so much for having me here. I'd like to start off by saying that more and more people are living this life these days, what with the US and India being such disruptive and vibrant economies, Indians being who they are, overachievers, and more and more of them finding themselves straddling both countries, so two or more countries.

The only difference with mine is that first it started 15 years ago and two, I'm lucky enough to be speaking on this podcast, thanks to Lighthouse Canton for noticing me and showcasing my journey.

My journey to becoming a global citizen and entrepreneur has been a transformative one, marked by a series of pivotal experiences that shaped my business model today.
Sometimes life takes you on a path and at that time the picture is not as clear but as time rolls by the image does assume clarity.

Call it the view through a pair of binoculars, the first image is a hazy one and as you turn the wheels the image gets clearer. My image is much the same.

Prabha - 03:52

My career began as you stated as a chartered accountant in India, a role that provided a solid foundation to business and finance. However my part took a significant turn when I relocated to the U.S. after marriage and after pursuing my CPA, then I took on various opportunities but the most poignant one was my role at Weiland Company in Santa Monica and this experience was crucial in exposing me to the complexities of international business combining a smaller firm format which is working very closely with clients.

At Arthur Andersen, I realised that the large firm environment was quite not what I wanted in terms of client interactions and problem solving and this insight was pivotal as it highlighted the importance of aligning professional roles with personal goals.

When my family and I moved back to India, I faced the challenge of integrating into a very different culture because most of my work experience at that point was from the US, and also combining it with the business environment in India.

It was during this time that I founded a subsidiary for a Southern California CPA firm in India and this venture was a significant learning curve, teaching me so much about managing business operations across different countries and cultures. It was an invaluable experience that helped me understand the nuances of bridging international practices with local needs.

Prabha - 05:15

The lessons from these experiences placed me on a path to creating Ventura Pranas and I realized that the key to a successful business model lies in merging global expertise with local insights. Ventura Pranas was designed to combine the meritocratic, results-driven approach of the US with the personalized, relationship-focused values of India, and this fusion has allowed us to provide an exceptional service while staying very deeply connected to our clients' needs.

In summary, my journey has taught me the importance of adaptability, cultural sensitivity, and ability to integrate diverse perspectives into a successful business model. These learnings have been fundamental in shaping Venture Pranas to what it is today, and it continues to guide us as we grow and evolve into the future.

Ratna - 06:01
Wow, that was such a remarkable and commendable journey. Congratulations on this.

As an expert in setting up structures and companies across borders, what should business owners consider when looking to establish their businesses internationally? What advice and help would you give them?

Prabha - 06:21
The concentrations are multidimensional, Ratna. I often come across entrepreneurs who are just raring to go, that they want to solve tomorrow's problems yesterday. So I need to make them pause and have them consider the answers to some hard questions. And there could be a whole bunch of them and we'll go through a few.

Where do they see a market for their product in short, medium and long term would be one question. And this would play directly into where they would structure their old core and subs. And this would indirectly affect their taxes.

Another question would be, where would their fundraise come from? You know, would it be Indian? Would it be foreign? And a foreign which country? Again, this is when we work with firms like Lighthouse Canton or others who assist clients in this process. Their whole core structures would drive the best suited funding partner.

Another question would be, where do they want to access their wealth from in the future? Given the added complexity of FEMA in India, the Foreign Exchange Management Act, where the children are now versus where they would study and work. This works directly into succession planning and it is important to start early. We can help them think that through in the early stages.

Another question would be where would they want to go IPO if that is how they see themselves exiting. And with the Indian markets being as vibrant as they are today, companies are looking to launch in India as a parent versus the US. A very different story from 15 years ago. 15 years ago when I started this practice or started this journey, being a US parent was the obvious choice. I can't say the same anymore.

And where is their IP safer? Most people would say it would be the US versus India.
But how do you balance this with your fundraising goals if India is where you want to go?
IPO, right? You'll have to put safeguards in place. Which tax regime would give them the best structure, effective worldwide tax? Given that you will always have layers when you create structures involving countries, it's very important to strike an optimal tax rate.

For example, the US allows a 10.5% rate when you have US companies deploying intangible assets worldwide and earning royalty. And you contrast this with a 25% tax rate in India or a 17% in Singapore. These are crucial decisions and what might work from a tax standpoint may not work from a fundraise standpoint.

And there are a multitude of questions, you know, I'll finish with a couple more. You know, where are they building their product or service? And is it a product they're building? Because the US has exemptions like the qualified small business stock exemption, which allows founders to exempt 10 times their investment of $10 million from capital gains. Now, that's a huge deal. And it can make a difference on where your hold goal sits.

And finally, if it's a product and if you're developing it somewhere else, where should your development center sit and how would you sell to the rest of the world? So these are all huge questions which have far-reaching consequences on the future of the business, and we aren't the ones to solve all their problems. We help them think this through but we would need to partner with law firms, wealth and trust companies who can also walk this journey with our clients.

Ratna - 09:42
Wow, thank you for that insight Prabha, this was so meaningful and I'm sure a lot of our audience will really benefit from what you just narrated in terms of what all do people need to look out for when they're starting a business.

Coming back to our global taxation landscape, this is changing rapidly. With ease of travel, remittances, people setting up businesses globally, what are some misconceptions people have about cross-border taxation? And how do you educate your clients to ensure they understand the nuances involved, especially with LRS investments for Indians?

Prabha - 10:21
I think we covered some of the cross border tax issues in the previous question, but I'll talk a little bit more about some misconceptions.

First of all, people assume all country ecosystems are the same. For example, my US clients underestimate the red tape in India on certain fronts. To give India credit, we've come such a long way from 15 years ago, but there are processes that take their time.

My US-based clients underestimated the compliance requirements from RBI, like SCTRS, you know, when you have Indians investing abroad versus foreign investments coming into India. They underestimated the importance of the source of funds to commence those very first operations. And it could spell the future of your access to those funds and succession planning. The source of that first thousand dollar investment capital can decide how your future generations can access the consequential growth. Believe it or not, it could be either all Indian or all foreign. It can literally be binary.

Now in India, we know our rules in India can limit access to $1 million a year under the LRS or 250,000 a year, depending on whether you're a non-resident Indian or a resident Indian. But what if you've grown a company to a $1 billion valuation in India and you're trickling at $1 million per year?

So I'm sure at Lighthouse Canton, you work with clients with this profile too. And so educating them comes from your firm too, as much as it does for me.

So similarly, my clients in India and the US underestimate the KYC standards in Singapore. They are tedious and long drawn activities but crucial in ensuring the right business processes are put in place, and these take several days in a project timeline.

So I think early warning systems and education are key in ensuring the clients are not blindsided and surprised and frustrated later on in the journey.

Ratna - 12:18
Thank you so much Prabha that is again very meaningful what you just narrated that you know initial investment of a thousand dollars with actually you know where it comes from the source determines what will happen to the business in the future how you're going to be entitled to that money in the future that was very interesting indeed.

With the rapid advancements in technology and changing regulatory landscapes how do you stay updated and ensure your clients remain compliant with evolving tax laws Prabha?

Prabha - 12:48
You know it is a relentless journey Ratna. I feel in some ways the US laws have evolved over so many centuries and they've become fairly standard with some significant changes every time the administration changes. So November 2024 is very important for us US tax practitioners. No doubt they're complex in nature, again a factor of time lapse and decades in litigious situations, but I find Indian laws can be quite radically transformed from one finance bill release to another.

A case in point is the most recent finance bill from July 23rd dramatically altered the way capital gains is computed on real property sales. With more and more Indian families having so much real estate in India and living abroad, these are highly appreciated assets. This has been quite disruptive to say the least. 

Or take the case of long term capital gains and stock sales. Once India was the highest at 28.5% and now it's dropped to 15%. Contrast this to the US rate of 23.8%.
I mean, it's just changed the way my clients think about their wealth and taxes.

Additionally, newer regulations are all being promulgated in India as India is relatively young. It's only been over 75 years since independence and India is truly coming into its own, emerging out of being largely agreed to be more tech and service heavy. With more evolved capital markets. 

Now with this transformation comes the need for newer laws and compliances. So to answer your question, it's constant learning on the India, US and Singapore fronts both theoretically and practically.

Ratna - 14:27
We are seeing more women leaders in finance and taxation today. Given your experiences, how have you felt empowered and supported in your journey in building your business? What qualities or skills do you feel women should embrace or build upon when focusing on growing their careers in finance or taxation?

Prabha - 14:48
One of the significant challenges women often face in building their careers in finance or tax or anywhere else actually in fact is balancing professional aspirations with personal responsibilities, particularly regarding family life.

So for many women the decision to step back from their careers to focus on raising children becomes the obvious one and that can be a difficult one.

In my own career and journey, I encountered this challenge first hand. Moving to India in my 30s, I chose to embrace entrepreneurship which allowed me the flexibility to manage my career by raising two young children. But this was a shift from a secure conventional job to a more flexible but more challenging entrepreneurial role. 

But that enabled me to work on my terms and provided me with the support system I needed to excel both as a professional and as a mother without applying breaks on my career.

So in terms of qualities and skills that women should focus on when growing their careers, I believe that adaptability and resilience are crucial. Women often demonstrate remarkable multitasking capabilities and diplomacy in the workplace and that takes them very far.

And I say this, a career and a family decision does not have to be a binary decision.
I ask women to embrace flexibility such as part-time jobs or freelance opportunities because these can be advantageous so you don't have to bring a soaring career to a screeching halt.

So these approaches will allow women to manage their professional and personal lives more effectively and transition between different phases of their careers quite seamlessly.

Ratna - 16:25
Thank you Prabha, I think you are absolutely right. It's not a binary decision that a woman has to make whether she wants to have a family or whether she wants to have a career. I think that is absolutely not required.

As someone who advocates for women in leadership roles, Prabha, what strategies do you employ to encourage and support the next generation of female finance professionals?

Prabha - 16:50
We started our firm, Ratna, so we provide flexi work schedules for women, especially the ones that have young children and have already an established track record with the firm. We allow them the freedom to work from home when they need to be home to look after their kids.

And given that our clients are all over the world working in a remote setting and taking calls from home works well from these multiple time zones that they're in and it's not hard to accommodate at all.

And for those who take long breaks or become part-time, we allow them to tell us when they're ready to resume full-time positions again.

We have introduced a plan called Returnee. It's a journey of return to work for women who are on the path to returning through their careers after taking breaks for family reasons. It involves leveraging their former work experience and education with current firm requirements and slowly placing them on the path to a full-time job.

We also believe in providing a financial support system that will help young families, one of this being an educational sponsorship program at the firm. We pay for the education of staff children as a disbursement from charities so that it's a tax-free additional income for some of our employees who need it.

And since we hired from Trichy, which is a small tier three city of India and being a small town, we spent time educating their families on the nature of the job and also getting the parents involved in these activities. So parents then start giving their daughters jobs priorities, especially when they are of manageable age. 

And lastly, I personally mentor members of my team who are women.

Ratna - 18:28
Wow, that's remarkable Prabha. I think, you know, women pulling women up, it's such an amazing, you know, noble thing to do and I think you're doing such a fabulous job of it.
So thank you so much.

Lastly, Prabha, what advice would you give aspiring female finance professionals looking to make a significant impact in the industry, particularly in the realm of cross-border taxation and finance leadership?

Prabha - 18:55
Okay, so, I'm about to wear my mentor hat now and speak to you as if you were one of my mentees. 

So first I would say get licensed. It gives you the fundamental right and standing to practice and peddle your services in the form of valuable advice to clients.

Second, it is a never-ending journey of learning. Never stop learning and you need to ensure that the knowledge gap between yourself and the next person who reports to you is a constant.

And if you are a young woman listening to this, I ask you to make sure that you always ensure that you have financial independence at home.

As appealing and heartwarming it might be to want to stay at home and be with your children, try to look past it and see what else you could do for your family if you also contributed to the family's income.

Soon your kids would have grown up and left home. What then? There will come a time when in-laws and a spouse will tell you that you need to stop working and start focusing on family. Ask them why you should not do both and why he or she cannot be your partner in this journey.

Aside from everything I've shared now, I would like to end by saying that it is a unique time for the Indian professional, especially the young women out there and it is up to women to capitalize on it.

The world now allows remote working and all kinds of tech-enabled facilities. As someone who travels the world between Asia and the West, I can tell you that the vibrance I see in Asia and India is unparalleled at the moment.

I truly believe that the next decade is India's on the world forum. So, young Indian women, embrace it and use it to the fullest.

Ratna - 20:36
Thank you so much, Prabha. I think this was such a meaningful conversation. And I'm sure our audience will hugely benefit from your insights and your experience.

Thank you so much for joining us today.

Closing - 20:49
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