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Why Compliance Is The Litmus Test For Indian SaaS Going Global

06 Jan'26 | By Inc42 BrandLabs

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A startup entering its first international market usually sees it as a milestone, a chance to find new customers, win bigger deals and build stronger brand credibility. But the excitement often obscures a tougher reality: New tax obligations, different rules on data residency, privacy laws that shift every few months, and customers who insist on complete compliance before they sign on the dotted line.

According to PwC’s Global Compliance Survey 2025, which polled 1,802 senior executives across 63 territories in the EU, North America, Asia-Pacific, Latin America, the Middle East and Africa, 77% said rising compliance complexity had impacted their companies. As many as 85% said compliance requirements have become more complex in the past three years.

In India, especially among SaaS companies, global scale increasingly hinges on one critical question: How do you build a product that can operate across dozens of jurisdictions without slowing growth?

This set the context for Inc42’s recent virtual panel discussion, Boardroom: Reimagining SaaS Leadership For Global Scale. Powered by US-based Avalara, a platform that automates tax compliance across jurisdictions, the session brought together leaders from finance, law and operations to explore how Indian SaaS startups are building globally compliant businesses.

Utsav Baidya, director (deals) at PwC, moderated the discussion, and the speakers included:

Chaithanya Yambari, cofounder, Zluri
Karthik Ramakrishna, director (legal), WebEngage
Karthik Srinivasan, VP (finance), Chargebee
Florine Pinto, head of finance, SquadStack
Ankit Ajmera, head of finance, Invideo
Venkat Nott, founder & CEO, Vinculum Group
Anil Paranjape, GM (India operations), Avalara

What Founders Overlook When Expanding To The US

Breaking into mature markets such as the US and the EU demands more than a strong product-market fit and early traction. Many SaaS startups enter these regions without a clear understanding of the regulatory shifts that accompany scale.

Among these are state-level tax IDs (for managing state-specific tax obligations), economic nexus thresholds (economic parameters such as sales value and transactions within a state that trigger requirements for an out-of-state business), strict data localisation and data residency requirements.

In essence, what looks like a straightforward step — signing global customers — often uncovers a maze of tax registrations, privacy obligations, industry certifications and cross-border data controls. Even the structure of a business, its invoice routing and billing procedure can determine whether it can onboard overseas customers smoothly or run into compliance friction.

The consequences of non-compliance can be significant. These hidden costs often surface only when a startup begins selling abroad, leading to delayed deal closures, penalties, forced product reworks, customer churn and extended sales cycles driven by buyer scrutiny. A non-compliant invoice, a misclassified transaction or the improper handling of customer data can trigger several issues, from regulatory notices to a loss of trust among enterprise clients. Investors, too, track these liabilities early and treat compliance as a benchmark of operational maturity and long-term scalability.

Chaithanya Yambari, cofounder of Zluri, a platform for managing user identity and access, pointed out the compliance blind spots that Indian businesses often miss when entering new markets.

“Whenever you are trying to get a deal in place, you must be aware of the local laws that apply,” he said. “Factors such as data sensitivity, data hosting and regional requirements can materially alter compliance obligations across geographies.”

Karthik Srinivasan, VP of Finance at Chargebee, a billing and monetisation platform, flagged yet another risk — the U.S. tax nexus.

“You don’t always need a physical presence there to trigger compliance requirements. Even crossing economic thresholds in certain states creates tax obligations. Founders often delay automation or expert consultation, which later proves costly.”

Speaking from a CEO’s perspective, Venkat Nott of the Vinculum Group emphasised the criticality of compliance. “Companies that invest early can actually turn it into a strategic advantage. If you neglect it, you end up paying 10 times,” he said.

“Compliance is now a baseline expectation. Customers expect you to align with tax jurisdictions, data residency and data privacy. Their businesses will suffer if you fail to comply.”

Offering a platform perspective, Anil Paranjape of Avalara explained why manual systems inevitably collapse during global expansion.

“We manage 30-35K license types, do real-time tax calculations in milliseconds and handle returns across 180 countries. It is impossible to keep track of all this manually.”

Across the panel, founders and industry experts agreed that compliance is emerging as the new code of success in global business. It must be built early, built consciously and built into the product, not patched in later. It forms the foundation that allows companies to scale globally without costly setbacks, as business practices mature and connected operations thrive.