Much of what is written about this corridor argues that the consequential decisions sit outside India: that capital is structured offshore, counsel is selected in the parent’s home jurisdiction, and the Indian entity is frequently the place where a decision is implemented rather than taken.
There is a visible body of evidence running the other way, however. Over the past three years, a wave of venture-backed technology companies has redomiciled from the United States and Singapore back to India:
- Groww: Delaware-incorporated Groww Inc. completed its inbound merger into Billionbrains Garage Ventures Private Limited in early 2024. In November 2025, it completed its initial public offering on the National Stock Exchange of India (NSE), valuing the business at INR 761 billion (Approx. $8.6 billion).
- Pine Labs: Singapore-incorporated Pine Labs Limited completed a cross-border amalgamation into its Indian operating entity, followed by an INR 39 billion (Approx $439.5 million) public offering on the NSE and BSE in November 2025.
- Flipkart: Flipkart restructured its group holding tiers from Singapore into India, sanctioned by the NCLT Principal Bench in December 2025, establishing Flipkart Internet Private Limited as the primary domestic holding entity ahead of an anticipated listing.
This unwinding of offshore structures across mature technology platforms appears to contradict the premise that cross-border corridors are governed from abroad. It does not. The contradiction dissolves once the original purpose of the offshore holding company is separated from its eventual dissolution on merger.
Domicile Follows the Liquidity Event
The offshore holding company model was designed around foreign exit assumptions. A Delaware corporation offered international venture funds familiar company law, established corporate governance, and direct access to listings on Nasdaq or the New York Stock Exchange. A Singapore holding company added bilateral tax treaty networks for share transfers.
These structures were designed to govern liquidity events assumed to be foreign. When domestic public equity markets in India offered superior valuation multiples and robust domestic investor demand the offshore corporate structure became an impediment. Because a foreign-incorporated entity cannot list directly on Indian stock exchanges, a structure engineered for an offshore exit became an operational obstacle to a domestic public offering. See , Groww being oversubscribed more than seventeen times overall, and twenty-two times in the qualified institutional buyer tranche, for instance.
So while early-stage ventures continue to incorporate offshore when targeting global expansion, late-stage platforms approaching liquidity are dismantling those structures. Corporate domicile follows the exit, not the investment.
The Tax Asymmetry: Inbound Neutrality vs. Section 367
The direct tax cost of a reverse flip is levied by the departing jurisdiction, not the destination. Inbound mergers in India are broadly tax-neutral so long as the underlying assets and majority shareholding remain continuous.
The cash liability arrives from abroad. Groww’s Delaware exit reportedly cost approximately $159.4m (around INR 1,340 crore) in US federal exit taxes. That cost is not the price of Indian regulation, but simply the departing jurisdiction charging for the departure. You do not pay India to bring the company home; you pay the US tax authority for leaving.
Four Structural Gates on the Inbound Route
Executing an inbound cross-border merger requires navigating four structural gates across corporate, foreign exchange, and investment screening frameworks:
1. The 100 Per Cent Wholly Owned Subsidiary Gate
Company law promises a three-to-four-month administrative fast track for inbound mergers, avoiding the courts altogether. But the entry ticket is absolute: the Indian entity must be a 100 per cent wholly owned subsidiary.
That requirement trips up real-world cap tables. Pine Labs fell short by just 0.11 per cent (holding 99.89 per cent) which legally locked it into the court system and led to appellate disputes over the merger’s appointed date. Flipkart was similarly excluded because it was folding six Singapore entities into one Indian platform rather than executing a one-to-one collapse.
The fast track is designed for textbook corporate diagrams. In the real world, late-stage tech platforms carry structural baggage that keeps them firmly on the twelve-to-eighteen-month tribunal timeline.
2. The 90 Per Cent Cap-Table Consent Threshold
Even when a company meets the corporate criteria, cap-table math usually derails the fast track. The administrative route requires written consent from 90 per cent of the total share register, not just active voters.
In a multi-stage startup with a cap table spread across founders, employee pools, and international venture funds, that level of responsiveness is virtually unobtainable. A dormant vehicle or an unreachable signatory acts as an automatic veto.
Pending legislation seeks to rationalise this hurdle down to 75 per cent of voting members and recognise the equity instruments common in foreign structures. Until those amendments become law, ownership dispersion alone keeps mature tech platforms locked out of the shortcut and parked in the twelve-to-eighteen-month tribunal system.
3. Resolving the FEMA Regulatory Lag
When the administrative route was launched in late 2024, the Reserve Bank’s rules still tied automatic foreign exchange approval strictly to a court decree. An administrative approval from the corporate registrar carried no automatic central bank cover, creating a foreign exchange compliance exposure for any company attempting the shortcut.
The RBI corrected the disparity in mid-2026, aligning its cross-border regulations to recognise administrative clearances. Until that fix landed, counsel could rarely recommend a route that solved corporate timing at the expense of foreign exchange compliance.
4. Land-Border Filing Conditions and Press Note 3
The final hurdle is national security screening. On paper, the corporate filing merely asks whether the departing entity is incorporated in a country sharing a land border with India. This is a formal box easily ticked for a holding company domiciled in Singapore or Delaware.
The actual friction lies in beneficial ownership. Under India’s foreign direct investment screening rules, bringing an offshore company home reshuffles the domestic cap table. If any underlying investor traces back to a land-border jurisdiction, the share swap triggers a mandatory government approval requirement. In Flipkart’s restructuring, resolving that clearance around Tencent’s holding operated as an independent dependency alongside the court process. For venture-backed platforms with cross-border syndicates, cap-table ancestry can turn an administrative restructuring into an inter-ministerial screening exercise.
Advisory Work Streams Across the Corridor
These structural conditions establish two distinct legal advisory mandates that originate on opposite sides of the corridor:
The first mandate is company-side domestic execution. This is led by Indian corporate counsel managing Section 230–234 scheme petitions, Regional Director filings, RBI cross-border merger reporting, and subsequent SEBI draft prospectus disclosures.
The second mandate sits with international fund counsel representing the institutional cap table. When a cross-border merger occurs, foreign venture and growth equity funds exchange foreign equity securities for direct shareholdings in an Indian operating company.
This exchange generates specific advisory requirements for fund counsel in the United States, Singapore, and Europe:
- Assessing fund-level tax exposure and rollover treatment under domestic revenue law upon the cancellation of offshore shares.
- Restructuring side letters, board observer rights, information covenants, and liquidation preferences to ensure enforceability under Indian company law.
- Structuring management equity incentive schemes (addressing the treatment of US RSUs or options within Indian regulatory pools).
For an international law firm with an institutional fund client base, the relevant diagnostic requires examining internal client records rather than conducting broad market research: which of your investor clients hold positions in offshore holding companies of Indian operating businesses, and of those, which are plausibly heading for an Indian listing?
The second list is where the instructions come from, and it is knowable well before the scheme is formally filed.
Lawfinity Solutions advises international law firms on cross-border legal market positioning. If the India corridor is a live question for your firm, we would be interested in a conversation. Lawfinity works with one firm per jurisdiction. Engagements begin with a single conversation about your firm’s current position and where the corridor question is live for you. Write to Prachi Shrivastava
