-
The Ministry of Corporate Affairs has simplified “reverse flipping” for startups relocating to India by clarifying compliance requirements.
-
Companies can now obtain prior approval from the Reserve Bank of India (RBI) instead of the National Company Law Tribunal.
-
The move aims to encourage startups to return to India, driven by better valuations, government support, and improving ease of doing business.
In a significant move, the Ministry of Corporate Affairs has simplified the process of “reverse flipping” for startups looking to relocate to India. The ministry has notified changes to the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2024, introducing a new sub-rule requiring prior approval from the Reserve Bank of India (RBI) for mergers or amalgamations involving foreign holding companies and Indian subsidiaries.
This development is expected to boost the startup ecosystem in India, with several companies already engaging in reverse flipping. Experts attribute this trend to better valuations, government support, and improving ease of doing business in India. The new rules will come into effect on September 17.
Industry experts have welcomed the move, citing its potential to attract more companies to relocate to India. Nithin Kamath, Founder and CEO of Zerodha, noted that the number of companies with a market cap of over $1 billion is at an all-time high, and the allocation of Indian households’ investments in the stock market has increased substantially.
