A joint parliamentary committee has proposed a new framework to facilitate the return of companies incorporated overseas to India, particularly those looking to shift their domicile to an International Financial Services Centre (IFSC). This recommendation, part of the Corporate Laws (Amendment) Bill, 2026, aims to create a statutory pathway for foreign-incorporated entities to migrate to India without being dissolved overseas, thus preserving their legal identity, operations, rights, and contracts. This process, referred to as "reverse flipping" or "inward re-domiciliation," draws inspiration from regimes in Singapore, UAE, Mauritius, Canada, and Hong Kong, and is expected to benefit sectors like funds, aircraft leasing, ship leasing, and insurance.
The committee, chaired by BJP MP Sudhir Gupta, highlighted that many Indian promoters with offshore operations desire to return to India. Currently, the process involves complex restructuring, including liquidation of foreign entities and multiple regulatory approvals. The proposed framework would remove these hurdles by allowing companies to transfer their registration to an IFSC, subject to home country laws and a no-objection certificate from the International Financial Services Centres Authority (IFSCA).
Beyond redomiciliation, the committee made several other recommendations. These include raising the Corporate Social Responsibility (CSR) applicability threshold from Rs 5 crore to Rs 10 crore, thereby reducing the number of companies subject to mandatory CSR obligations. The panel also backed decriminalizing minor corporate offenses, simplifying regulatory processes, and allowing the conversion of specified SEBI or IFSCA-registered trusts into Limited Liability Partnerships (LLPs) to facilitate alternative investment and fund structures. The final bill incorporating these recommendations is expected to be presented in the winter session of Parliament.
