After years of setting up legal headquarters abroad, Indian startups are increasingly shifting their domicile back to India.
Companies like Razorpay, Udaan, Pine Labs, and Meesho are reversing earlier decisions, while Zepto has already completed the transition. This trend, known as ‘reverse flipping’, is being driven by better IPO prospects, easier compliance, and India’s strong economic growth.
The shift is not easy. Companies must secure multiple legal and regulatory approvals and pay substantial taxes. Still, India’s growing capital market provides a compelling reason for startups to return.
Alok Bathija, Partner at Accel, explained that a software firm with $50-$60 million in revenue can now list in India, whereas a similar listing in the US would require nearly $500 million in revenue. Indian markets offer higher valuations and greater accessibility.
Besides IPO prospects, moving headquarters back simplifies regulatory compliance, especially for fintech startups.
Many generate most of their revenue in India and operate under its financial system, making it sensible to align with domestic regulations. Amit Nawka, Partner at PwC, pointed out that fintech firms contribute significantly to India’s financial landscape. Headquartering in India provides comfort to regulators, he said.
The rise of domestic funding has also driven the shift. Startups previously relied on global investors, especially US-based venture capital firms.
Now, family offices and domestic venture capital funds are filling the gap. Siddarth Pai, co-chair at IVCA, emphasized that many startups, especially those in regulated sectors, find it easier to plan expansions and secure approvals when their parent company is regulated by RBI or Sebi. The abolition of angel tax has further encouraged startups to return to India.
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