Economic Survey 2022-23 states that start-ups are exploring “reverse-flipping”

February 2, 2023

Flipping is the process of transferring entire ownership of an Indian company to an overseas entity.
It is generally accompanied by a transfer of all intellectual property and data owned by an Indian company.
It effectively transforms an Indian company into a 100% subsidiary of a foreign entity.
Reverse Flipping is the process of shifting the domicile of those companies back to India who flipped earlier.
The Economic Survey 2023 stated that Indian startups are exploring ‘reverse flipping’, or shifting their domicile back to India, with easy access to capital from private equity and venture capital, changes in rules regarding round-tripping, and the growing maturity of India’s capital market.
The Survey also put forward measures like simplifying multiple tax layers, resolving uncertainty due to tax litigation, especially of employee stock ownership plans, exploring the incubation and funding landscape for startups in emerging fields like social innovation and impact investment, and facilitating mentorship programmes through partnerships with established private entities.