Management Consulting
Aon
Full Credential Description
In the evolving landscape of India's startup ecosystem, many fintech and IT startups have historically opted to establish their holding companies in the US, while operating companies remained in India. This trend was driven by the advantages of a mature technology ecosystem, higher valuations, and the credibility associated with a US address. However, as India aims for a $5 trillion economy by 2027, the government has introduced initiatives like 'Startup India' to enhance the local environment for startups, offering regulatory flexibility and tax incentives. Despite these advancements, startups with foreign holding companies face significant challenges when considering a return to India, a process known as 'reverse flipping.' This process often involves complex tax and regulatory hurdles, including restrictions on cross-border mergers, potential exit taxes, and complications regarding the carry forward of past losses. These challenges can lead to substantial financial burdens for both companies and their shareholders. To address these issues, Aon provides tailored solutions through tax insurance products designed to mitigate the risks associated with reverse flipping. By connecting startups with insurers that offer customized policies, Aon helps alleviate potential tax exposures, thereby facilitating smoother transitions for companies relocating to India. This strategic support not only safeguards investor interests but also enhances the overall valuation of the companies involved, ensuring that both founders and investors can navigate the complexities of corporate restructuring effectively.