Reverse Flipping: Is It Time To Return Home?

In the last few years, several Indian companies shifted their ownership structure outside India due to a host of reasons, including overseas listing and access to international capital markets, a more protective intellectual property ("IP") environment, attracting human capital in offshore jurisdictions and tax concessions offered by offshore jurisdictions.

However, externalization has come with its own challenges. An upswing in operational costs, risk of the foreign entity being regarded as managed and controlled from India which entailed tax implications, aspirations for India listing in a fast-changing global scenario in which international capital markets have been relatively less attractive and tax litigations owing to the complexity of an externalized structure are certain reasons that have necessitated a re-think. Also, the adoption of multilateral instruments and changes in double taxation treaties has added tax complexities for externalized structures. In