Reverse flipping – medium rare or well done? – Law.asia

In recent years, there has been a noticeable trend of Indian-origin startups and companies engaging in a “reverse flip”, i.e. shifting their holding structures back to India from offshore jurisdictions like Singapore, Delaware or the Cayman Islands.

This reverses the previous trend of startups initially incorporating offshore, often for access to global investors, a better regulatory environment and tax advantages.

However, shifting market dynamics, regulatory changes and India’s growing appeal as a business hub are prompting many companies to reconsider their original corporate structures.

One of the key drivers of this reverse flip is India’s maturing capital markets. As many as 13 new-age tech companies have listed on the exchanges in 2024, including Go Digit General Insurance, Swiggy, FirstCry, Unicommerce and Ola Electric.

This is a sign that many Indian startups may see a stronger case for listing domestically rather than on foreign exchanges.

The growth of India’s public markets, coupled with increased liquidity and deepening investor confidence, has made staying in India a viable and even preferred option for startups seeking long-term growth.

Changing Indian regulatory and tax considerations also play a significant role. Authorities have tightened oversight on offshore structures, particularly those in tax havens, and introduced new compliance requirements such as the significant economic presence (SEP) and increased reporting obligations under the Foreign Exchange Management Act (FEMA).

Another important factor is investor sentiment. Many Indian venture capital and private equity firms now prefer investing in Indian-domiciled companies due to the complexities associated with foreign structures. Some global investors also recognise India’s economic growth potential and are increasingly comfortable with India-based entities.

Ultimately, the reverse flip trend reflects India’s rise as a major economic force and a maturing ecosystem that no longer requires companies to base themselves offshore to attract capital or scale globally.

While offshore structures may still be useful for certain business models, many Indian-origin companies now see India offering significant advantages in governance, compliance and long-term value creation.

Recent Singapore flips

Pine Labs, the payment solutions provider, sought approval for a cross-border merger of its Singapore-based holding company with its Indian operations. Pine Labs received approval in May 2024.

More recently, Zepto, the quick-commerce startup, completed its reverse flip from Singapore to India in January 2025, receiving formal approvals from both the Lion City’s Accounting and Corporate Regulatory Authority (ACRA) and India’s National Company Law Tribunal (NCLT).

Reverse flip: Singapore law aspects. From a Singapore legal and regulatory perspective, the reverse flip process would involve a Scheme of Arrangement to merge the Singapore and Indian entities.

The salient steps in the process are:

(1) The Singapore company applies to the High Court for an order to convene a members’ meeting;

(2) The court then directs how the meeting is to be held and approval requires at least a three-quarters majority of members unless stated otherwise;

(3) A scheme of arrangement is drafted considering legal, tax and accounting implications under both Singapore and Indian law;

(4) The draft is reviewed and approved by members of both companies;

(5) On approval, an application is then made to the High Court for final approval; and

(6) If approved, the court order is lodged with the ACRA within seven days.

The legal effect of such a scheme of arrangement is twofold – the Indian company assumes all assets, liabilities and legal proceedings of the Singapore company, and the Singapore company is dissolved without winding up.

Flavour of the month?

What does this trend mean for traditional overseas holding company jurisdictions for Indian startups, like Delaware and Singapore?

While the recent performance of capital markets in Singapore has been disappointing, its reputation as an Asian and global financial hub remains attractive and unmatched. Singapore is home to a well-regulated banking and financial services sector and its ease of doing business, robust corporate law framework, and courts and arbitration institutions (known for their commercial expertise, efficiency and impartiality) make it a preferred venue for resolving business disputes.

Budget 2025 initiatives

Singapore’s Budget 2025 introduces a series of initiatives aimed at strengthening the country’s startup ecosystem. With a focus on improving access to capital, supporting international expansion, and driving AI and deep tech innovation, the budget presents new opportunities for founders and entrepreneurs. Here are some of the key measures that will directly benefit startups.

Stronger IPO support for startups. The government is taking stronger measures to position the Singapore Exchange (SGX) as a more competitive listing destination. New tax incentives for fund managers investing significantly in Singapore-listed equities will make the SGX a more attractive platform for public listings.

In addition, engagement with institutional investors and private equity firms will help build market confidence and liquidity.

These initiatives encourage high-growth startups to consider IPOs in Singapore rather than seeking overseas markets, ensuring better access to domestic capital and a more vibrant equity market.

SGD1bn Private Credit Growth Fund. Venture capital (VC) funding has become more constrained globally, making it difficult for startups to secure investment. To address this, the government is introducing a SGD1 billion Private Credit Growth Fund.

This fund provides alternative financing for startups and high-growth enterprises that may struggle with traditional bank loans. It offers non-dilutive funding, allowing founders to scale without giving up equity. By encouraging private investors to co-invest alongside institutional lenders, Singapore is strengthening the financing ecosystem for startups in deep tech, advanced manufacturing and high-growth sectors.

Global Founder Programme expansion support. To further establish Singapore as a leading startup hub, it is launching the Global Founder Programme. This initiative attracts international founders to set up and expand their businesses in Singapore while also helping local startups scale into global markets.

By providing mentorship, funding access and leveraging Economic Development Board (EDB) partnerships, the programme creates new opportunities for startups to collaborate with multinational corporations and expand internationally. With direct support for market entry and business growth, this initiative strengthens Singapore’s role as a regional launchpad for innovative companies.

AI, deep tech and National Productivity Fund. To drive next-generation innovation, the government is investing heavily in AI, deep tech and research and development (R&D). A SGD3 billion (USD2.24 billion) top-up to the National Productivity Fund will attract high-value technology investments, improve business productivity and train workers, accelerating sectoral transformation.

Additionally, SGD150 million will be allocated under the Enterprise Compute Initiative to support AI adoption, providing businesses with access to cutting-edge AI tools, computing power and expert consultants. These investments will equip startups with the infrastructure needed to integrate AI-driven solutions, ensuring they stay competitive in a rapidly evolving tech landscape.

World-class startup ecosystem

Budget 2025 reinforces Singapore’s commitment to building a world-class startup ecosystem. With improved financing options, global expansion support and AI investments, startups have a stronger foundation to innovate and scale globally.

These initiatives offer unparalleled opportunities for high-growth companies, making now the ideal time for founders to leverage government-backed funding and support.

Ultimately, Singapore’s blend of strong legal infrastructure, tax efficiency, ease of doing business and status as a financial hub will make it a secure, predictable and business-friendly environment for companies looking to scale across the region.