What are the benefits of Flipping?

12 October 2022

  1. Global Market Access:
    Flipping core business operations outside India provides a wider audience to the startup. This enables the startup to reach out to a global audience as compared to just India. This access is enabled because of the reasons below which act as a catalyst for such access and expansion.
  2. Ease of Operations to manage foreign currency transactions:
    Multi-currency payment gateway management is easier in jurisdictions like Singapore and the USA. This facilitates faster reconciliation, easier payment mechanisms enable the business to grow faster and swifter.
  3. Access to global incubator/s, investors, etc:
    Flipping opens up new funding opportunities for startups. Exposure and access to global incubators, VCs, and accelerators who may be restricted from funding companies abroad. The new company enables startups to pitch and seek funding from such specialized funding players.
  4. Flexibility of financing options and structuring:
    Countries like Singapore/USA have easier and more flexible regulatory frameworks for the functioning of businesses. For eg in terms of granting of ESOPs, faster IP registration mechanisms, and robust judicial procedures. This offers ease of business and malleability in business operations that startups require. Additionally, options like revenue-based financing and line of credit schemes for startups are easily available. This empowers the entrepreneurs to avail of better financing options than diluting equity all the time.
  5. Lower tax rates in certain countries:
    Multiple countries have lower tax rates which turn out to be lucrative for startups. A lower corporate tax rate helps startups to manage cash flows and plan better for resources. 

The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife Consulting is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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