Cross-Border Mergers under Section 234 & FEMA Regulations: Inbound vs Outbound Mergers, Deemed RBI Approval & Tax Neutrality Guide

Executive Overview & Quick Highlights

In global corporate restructuring and multinational enterprise consolidation, cross-border amalgamations represent one of the most sophisticated legal and financial procedures. Under the legacy Companies Act, 1956, Indian corporate law permitted only "Inbound Mergers"—where an offshore foreign corporation merged into an Indian corporate entity. Indian companies were statutorily prohibited from merging into foreign entities. This legal restriction was dismantled with the notification of Section 234 of the Companies Act, 2013, read with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and the operationalization of the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 by the Reserve Bank of India (RBI).

Today, Indian enterprises can execute both Inbound Mergers (foreign company merging into an Indian company) and Outbound Mergers (Indian company merging into a foreign company incorporated in an approved jurisdiction under Annexure B of Rule 25A). The defining regulatory innovation of the 2018 FEMA Regulations is the "Deemed Approval" mechanism. Under Regulation 9, any cross-border merger structured in strict compliance with the conditions prescribed in the 2018 Regulations is deemed to have received prior approval from the Reserve Bank of India. This eliminates the necessity of obtaining a separate physical no-objection certificate from the RBI prior to petitioning the National Company Law Tribunal (NCLT).

However, cross-border restructurings face a profound statutory asymmetry under Indian direct tax law. While Section 47(vi) and Section 47(vii) of the Income-tax Act, 1961 confer complete capital gains tax neutrality upon Inbound Mergers (exempting both the transferring foreign company and its shareholders, provided the amalgamated entity is an Indian company), Parliament has deliberately chosen not to extend tax neutrality to Outbound Mergers. Consequently, an Outbound Merger represents a fully taxable transfer under Section 2(47), triggering immediate capital gains tax liability on the market value of all Indian capital assets, intellectual property, and shares transferred to the foreign resultant company.

By leveraging dedicated cross-border modeling and corporate restructuring engines like assureFinancials and assureTax within the assureOffice suite, corporate dealmakers, CFOs, and practicing chartered accountants can audit FEMA borrowing caps, ensure Overseas Investment compliance, and structure cross-border transactions without unexpected regulatory delays.

Core Highlights of the Cross-Border Merger Framework

• Dual Legislative Regime: Cross-border mergers require simultaneous compliance with Section 234 of the Companies Act, 2013 (NCLT court-sanctioned scheme) and the Foreign Exchange Management (Cross Border Merger) Regulations, 2018.
• The Deemed RBI Approval Doctrine: If the merger scheme satisfies all requirements of the FEMA 2018 Regulations (regarding issuance of securities, borrowing limits, asset transfers, and office setups), no separate RBI approval is required prior to NCLT sanction.
• Permitted Jurisdictions: Mergers can occur only with foreign companies incorporated in jurisdictions whose securities regulator is a signatory to the IOSCO Multilateral Memorandum of Understanding, or has a bilateral MoU with SEBI, and is not listed on FATF non-compliant lists.
• Two-Year Transition Window: For Inbound Mergers, non-compliant overseas borrowings must be restructured into compliant External Commercial Borrowings (ECB) within two years, while non-compliant overseas assets must be liquidated or converted within two years.
• Tax Neutrality Asymmetry: Inbound Mergers are completely tax-free under Sections 47(vi) and 47(vii). Outbound Mergers are fully taxable as a transfer under Section 45, exposing the Indian company and its shareholders to substantial capital gains tax.
• Valuation Safeguards: Under Rule 25A, the valuation of both the Indian and foreign company must be executed by a Registered Valuer or recognized international merchant banker conforming to internationally accepted pricing methodologies.

Detailed Statutory Architecture & Legislative Logic

The statutory architecture governing cross-border mergers is codified in Section 234 of the Companies Act, 2013. Subsection (1) provides that the provisions of Chapter XV (Sections 230 to 232) relating to compromises, arrangements, and amalgamations shall apply mutatis mutandis to schemes of merger and amalgamation between Indian companies and companies incorporated in the jurisdictions of such countries as may be notified by the Central Government.

Subsection (2) mandates that an Indian company may merge with a foreign company or vice versa, with the prior approval of the Reserve Bank of India, and the terms of the scheme may provide for the payment of consideration in cash, or in depository receipts, or partly in cash and partly in depository receipts.

Comprehensive Comparison: Inbound vs Outbound Mergers

Parameter	Inbound Merger (Regulation 4)	Outbound Merger (Regulation 5)
Resultant Company	Indian Company (resident in India)	Foreign Company (incorporated abroad)
Transferor Entity	Foreign Company (absorbed and dissolved)	Indian Company (absorbed and dissolved)
Securities Issuance Framework	Governed by Non-Debt Instruments (NDI) Rules (FDI caps, pricing norms)	Governed by FEM (Overseas Investment) Rules 2022 (LRS & ODI limits)
Treatment of Overseas Assets	Treated as Overseas Direct Investment (ODI) or sold within 2 years	Transferred directly to the foreign resultant company
Treatment of Indian Assets / Office	Transferred directly to the Indian resultant company	Treated as a Branch Office (BO) in India under Foreign Exchange regulations
Treatment of Outstanding Borrowings	Must conform to External Commercial Borrowings (ECB) norms within 2 years	Must be settled or repaid prior to NCLT sanction; no rupee debts permitted
Direct Tax Exemption	Fully exempt under Section 47(vi) & 47(vii) of Income-tax Act	Fully taxable; transfer of capital assets & shares attracts capital gains tax
Judicial Forum	NCLT bench having jurisdiction over registered office of Indian company	NCLT bench in India + Competent Court/Tribunal in foreign jurisdiction

Deep-Dive Technical Mechanics & Multi-Act Interplay

1. Inbound Merger Mechanics under Regulation 4 of FEMA

An Inbound Merger involves a foreign company merging into an Indian company, with the Indian company surviving as the "Resultant Company." To qualify for deemed RBI approval, the transaction must navigate four technical thresholds:

1. Issuance of Securities (Regulation 4(1)): The resultant Indian company may issue or transfer any security (equity shares, fully compulsorily convertible preference shares, or debentures) to a person resident outside India in accordance with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. If the foreign company's business falls under the "Government Approval Route" (e.g., defense, multi-brand retail), prior approval from the relevant administrative ministry must be secured before NCLT filing.
2. Treatment of Foreign Borrowings (Regulation 4(2)): Any outstanding loan, debt, or borrowing of the foreign company becomes the liability of the resultant Indian company. If the borrowing does not comply with the ECB framework (e.g., exceeds ECB borrowing limits, has a maturity under 3 years, or carries interest exceeding SOFR + 500 bps), the resultant company is granted a statutory transition window of two years to bring the borrowing into complete compliance. During this two-year period, no end-use restrictions apply to the inherited debt.
3. Treatment of Overseas Assets (Regulation 4(3)): The Indian resultant company is permitted to hold, own, or transfer any overseas asset, office, or subsidiary of the merging foreign company. If such asset is not permitted to be acquired under the FEM (Overseas Investment) Rules, 2022, the resultant company must sell or liquidate the asset within two years from the date of the NCLT sanction order and repatriate the proceeds to India.
4. Opening Overseas Bank Account (Regulation 4(4)): The resultant Indian company is permitted to open and maintain a bank account in the foreign jurisdiction for up to two years to settle transition liabilities and collect pre-merger debts.

2. Outbound Merger Mechanics under Regulation 5 of FEMA

An Outbound Merger involves an Indian company merging into a foreign company, with the foreign entity surviving as the Resultant Company. This structure is significantly more complex because Indian enterprise value is transferred offshore:

• Securities to Indian Shareholders (Regulation 5(1)): The foreign resultant company may issue shares or securities to resident Indian shareholders. Where the shareholder is a resident individual, the value of shares must fall strictly within the annual limit of the Liberalised Remittance Scheme (LRS), currently $250,000 per financial year. Where the shareholder is an Indian corporate entity, the acquisition must comply with the Overseas Direct Investment (ODI) financial commitment cap (400% of net worth) under the FEM (Overseas Investment) Rules, 2022.
• Indian Office as Branch Office (Regulation 5(2)): The office of the Indian company in India automatically becomes a Branch Office (BO) of the foreign resultant company, governed by the Foreign Exchange Management (Establishment in India of a branch office or a liaison office) Regulations, 2016. The branch office must restrict its operations solely to activities permitted under the branch regulations.
• Treatment of Indian Debts (Regulation 5(3)): Any borrowing or debt of the Indian company must be fully repaid or settled prior to the merger sanction, or must be secured by the foreign resultant company. The foreign company cannot hold rupee-denominated debts in India without explicit RBI approval.

3. Direct Tax Neutrality Asymmetry: Section 47 vs Section 45

The direct tax treatment represents the most critical strategic divergence in cross-border planning:

Inbound Mergers: Complete Tax Exemption

• Transfer of Capital Assets: Under Section 47(vi), any transfer of a capital asset in a scheme of amalgamation by the amalgamating company to the amalgamated company is exempt from capital gains tax, provided the amalgamated company is an Indian company.
• Transfer of Shares: Under Section 47(vii), any transfer of shares by a shareholder in exchange for shares in the Indian amalgamated company is completely exempt from capital gains tax in India.
• Accumulated Losses: Under Section 72A(1), accumulated business losses and unabsorbed depreciation of the foreign entity can be carried forward by the Indian resultant company, subject to meeting industrial undertaking criteria.

Outbound Mergers: Fully Taxable Transfer

• Section 47(vi) explicitly conditions exemption on the amalgamated company being an Indian company. Since the resultant company in an Outbound Merger is a foreign company, Section 47(vi) is inapplicable.
• Under Section 45 read with Section 2(47), the dissolution and transfer of all Indian assets, factories, real estate, and intellectual property to the foreign company represents a fully taxable capital gains event for the Indian company at Fair Market Value.
• Similarly, Indian shareholders exchanging their Indian shares for foreign shares are subjected to capital gains tax under Section 45 without any statutory rollover relief.

Real-World Practical Challenges & Worked Numerical Case Studies

Case Study 1: Silicon Valley SaaS Holding Company Inbound Merger ("Reverse Flip")

Context: CloudMetrics Inc., a Delaware corporation, owns 100% of CloudMetrics Technologies India Private Limited (Bengaluru). In 2021, the founders externalized their corporate structure to Silicon Valley. In FY 2026-27, to prepare for an Initial Public Offering (IPO) on the National Stock Exchange (NSE) in India, the founders execute an Inbound Merger (a "Reverse Flip"), merging CloudMetrics Inc. (Delaware) into CloudMetrics Technologies India Private Limited.

Regulatory & Corporate Structuring:

1. The Board of Directors approves the Scheme of Amalgamation under Section 234 read with Sections 230-232.
2. The resultant Indian company issues fresh equity shares to the US venture capital funds and founders in exchange for the cancellation of shares in CloudMetrics Inc., adhering to the NDI Rules FDI pricing guidelines certified by a Registered Valuer.
3. CloudMetrics Inc. holds an offshore customer contracts bank account in California with $4,000,000. Under Regulation 4(4), the Indian company is permitted to maintain this US bank account for up to two years to settle foreign liabilities.
4. Direct Tax Outcome: Under Section 47(vi) and 47(vii), the transfer of intellectual property and cancellation of shares is 100% tax-neutral. The reverse flip is completed without any direct tax cash drag.

Case Study 2: Indian Pharmaceutical Firm Outbound Merger and Capital Gains Tax Modeling

Context: BioPharma Research India Limited proposes an Outbound Merger into BioPharma International BV (incorporated in the Netherlands). BioPharma India owns patents registered in India valued at ₹150,00,00,000 (cost of acquisition: ₹20,00,00,000) and land valued at ₹50,00,00,000 (indexed cost: ₹15,00,00,000).

Direct Tax Shock under Section 45:

Because the resultant entity is a Dutch corporation, Section 47(vi) does not apply. The merger represents a taxable transfer of assets:

• Capital Gain on Patents: ₹150,00,00,000 – ₹20,00,00,000 = ₹130,00,00,000 (Long-Term Capital Gain)
• Capital Gain on Land: ₹50,00,00,000 – ₹15,00,00,000 = ₹35,00,00,000 (Long-Term Capital Gain)
• Total Taxable Capital Gains: ₹165,00,00,000
• Corporate Tax Rate on LTCG @ 20% + Surcharge (10%) + Cess (4%) = 22.88% (or 12.5% post-amendment)
• Total Tax Outflow payable by BioPharma India: ₹165,00,00,000 × 22.88% = ₹37,75,20,000

In addition, Indian shareholders are taxed on their capital gains upon surrendering Indian shares for Dutch shares. Using assureTax, the promoters realize that an Outbound Merger creates an immediate ₹37.75 Crore tax drag, abandoning the Section 234 outbound merger in favor of a share-swap cross-holding structure.

Case Study 3: Inbound Merger Involving Non-Compliant Overseas Debt (ECB Transition)

Context: Apex Automotive Limited (India) merges with its German engineering subsidiary (Apex GmbH). Apex GmbH has an outstanding term loan of €15,00,000? No, €15,000,000 from Deutsche Bank carrying an interest rate of EURIBOR + 650 bps and an original maturity of two years.

Regulatory Non-Compliance under Master Direction on ECB:

Under the RBI Master Direction on External Commercial Borrowings, foreign currency loans must have a Minimum Average Maturity Period (MAMP) of 3 years (or 5 years depending on quantum), and the all-in-cost ceiling is capped at Benchmark Rate + 500 bps. Apex GmbH's loan breaches both the MAMP and the interest rate cap.

Execution of Regulation 4(2) Two-Year Safe Harbor:

Under Regulation 4(2) of the Cross Border Merger Regulations, 2018, the non-compliant debt is legally permitted to enter the Indian balance sheet. The Indian resultant company is granted a statutory window of two years from the NCLT sanction date to regularize the borrowing. Apex Automotive utilizes the two-year period to refinance the German loan with an Indian consortium ECB facility carrying an interest rate of SOFR + 420 bps with a 5-year tenure, achieving perfect FEMA compliance without penalty.

Case Study 4: Resident Individual Shareholders and the LRS $250,000 Ceiling in Outbound Mergers

Context: FinTech Innovations India Limited proposes an outbound merger into FinTech Global PLC (United Kingdom). Founder X (resident Indian individual) holds 30% of the Indian company, valued at £800,000 (approximately $1,050,000).

Statutory Impasse under Regulation 5(1):

Regulation 5(1) stipulates that resident individuals acquiring securities in the foreign resultant company must comply with the Liberalised Remittance Scheme (LRS). The annual statutory ceiling under LRS is $250,000 per financial year. The value of shares to be issued to Founder X ($1,050,000) exceeds the LRS limit by $800,000.

Under FEMA, an individual cannot combine past or future years' LRS quotas. Consequently, the scheme cannot claim "Deemed RBI Approval." The company must file a specialized compounding/prior-approval dossier before the Central Office of the RBI Foreign Exchange Department in Mumbai seeking an ad-hoc dispensation under Section 234, or restructure the excess $800,000 shareholding into non-voting depository receipts or cash consideration paid through the company.

Case Study 5: Retaining Non-Compliant Overseas Real Estate under Regulation 4(3)

Context: Indus Hospitality Limited (India) merged with an offshore hotel management company in Mauritius. The Mauritian company owned a luxury residential villa in Grand Baie, Mauritius, valued at $2,500,000, utilized as an executive retreat.

FEMA Real Estate Prohibition:

Under the FEM (Overseas Investment) Rules, 2022, an Indian corporate entity cannot acquire or hold overseas residential immovable property unless it is directly required for its core business operations (e.g., staff housing attached to a hotel). The luxury retreat did not satisfy business necessity.

Under Regulation 4(3), the resultant Indian company cannot hold this asset indefinitely. The company is granted a strict period of two years from the date of the NCLT order to sell the villa. Indus Hospitality lists the property, executes a registered conveyance in Mauritius for $2,650,000, and repatriates the sale proceeds to its Authorized Dealer Bank account in Mumbai within 22 months, fulfilling its statutory FEMA commitment.

Case Study 6: Creditor Objections and Secured Lender Consents before NCLT

Context: Global Logistics Limited (India) proposed an Outbound Merger into a Singapore logistics firm. Standard Chartered Bank, which had extended a ₹60 Crore working capital credit line to the Indian entity, filed a formal objection before the NCLT under Section 230(4), arguing that transferring the business offshore would extinguish its primary floating charge on Indian receivables.

Resolution Framework:

Under Section 230(6) of the Companies Act, a scheme must be approved by a majority representing three-fourths in value of the creditors. Furthermore, Regulation 5(3) requires that all Indian borrowings must be secured or repaid. The Singapore resultant company agreed to establish a registered Branch Office in Mumbai, creating an equitable mortgage over Indian warehouse assets and securing a standby letter of credit (SBLC) from an international bank guaranteeing the ₹60 Crore debt. Standard Chartered withdrew its objection, and the NCLT confirmed the merger.

Case Study 7: Cross-Border Valuation Parity and Merchant Banker Certification

Context: NovaRetail India merged with NovaRetail Europe SAS (France). The swap ratio proposed was 1 equity share of NovaRetail India for every 4 shares of NovaRetail Europe.

Rule 25A Statutory Valuation Protocol:

Under Rule 25A(2) of the Compromises Rules, the valuation of the Indian company and the foreign company must be performed by valuers who are members of a recognized professional body in their respective jurisdictions. An independent Indian Registered Valuer and a French Commissaire aux Comptes execute a joint valuation using Discounted Cash Flow (DCF) and Market Multiple methods. The valuation dossier confirms that the swap ratio does not dilute the Indian company's net asset value, satisfying both NCLT scrutiny and FEMA NDI Rule 21 arm's length pricing mandates.

Step-by-Step Audit & Compliance Verification Checklist

Cross-border restructuring teams and corporate advisors should execute this systematic 10-step protocol to manage Section 234 mergers:

Step	Verification Action Item	Responsible Stakeholder	Statutory Milestone
1	Verify foreign jurisdiction is an approved country listed under Annexure B of Rule 25A	Legal Counsel	Deal Structuring
2	Conduct Registered Valuer share exchange valuation conforming to internationally accepted methods	Registered Valuer / Merchant Banker	Prior to Board Approval
3	Audit Foreign Direct Investment (FDI) caps and confirm automatic vs approval route under NDI Rules	assureFinancials FEMA Hub	Pre-Scheme Draft
4	Audit foreign borrowings to verify compliance with ECB norms or map 2-year transition schedule	Treasury / Finance Head	Regulation 4(2) Review
5	Verify resident individual shareholdings fall within annual LRS limit of $250,000 for outbound schemes	Chartered Accountant	Regulation 5(1) Audit
6	Draft joint Scheme of Amalgamation incorporating statutory deemed RBI approval declarations	Company Secretary	Board Sign-Off
7	File First Motion Application before NCLT under Section 230(1) for convening shareholder/creditor meetings	NCLT Legal Counsel	First Motion Petition
8	Serve notices to statutory authorities (RD, ROC, RBI, Income Tax Department, and CCI)	Corporate Legal Team	Section 230(5) / 30-Day Notice
9	Obtain final NCLT Sanction Order in Form CAA-7; file certified order with ROC in Form INC-28 within 30 days	assurePractice Team	Section 232(5) ROC Milestone
10	Submit comprehensive post-merger compliance report to the Reserve Bank of India via AD Category-I Bank	Authorized Dealer Bank	Within 180 Days of Order

Workflow Integration with the assureOffice Ecosystem

Navigating cross-border mergers requires harmonizing foreign exchange surveillance, court-sanctioned corporate schemes, complex tax modeling, and post-merger banking filings. The assureOffice suite equips dealmakers with end-to-end tooling:

• assureFinancials: Features advanced cross-border entity consolidation modules. It models pre-and-post merger balance sheets, tracks the two-year ECB borrowing regularization countdown, verifies LRS $250,000 individual ceilings, and audits foreign subsidiary asset portfolios under the FEM (Overseas Investment) Rules, 2022.
• assureTax: Models the fiscal impact of Inbound versus Outbound structures. It computes capital gains tax exposures under Section 45 for outbound schemes, verifies Section 47(vi) tax exemption criteria for inbound reverse flips, models carry-forward losses under Section 72A, and manages withholding schedules under Section 195.
• assureNotice: Monitors NCLT cause lists, tracks Regional Director and Income Tax Department representation windows under Section 230(5), and auto-generates factual rebuttal dockets addressing departmental tax objections.
• assurePractice: Empowers corporate secretarial teams and practicing CAs to manage multi-jurisdiction NCLT dockets, track creditor notice dispatch registers, and ensure timely filing of Form INC-28 within the mandatory 30-day window.

16 Detailed Practitioner FAQs

1. What is a cross-border merger under Indian law?

A cross-border merger is a merger, amalgamation, or arrangement between an Indian company and a foreign company in accordance with Section 234 of the Companies Act, 2013 and the Foreign Exchange Management (Cross Border Merger) Regulations, 2018.

2. Can an Indian company merge into a foreign company?

Yes. An Indian company can merge into a foreign company (Outbound Merger) provided the foreign company is incorporated in an approved jurisdiction listed in Annexure B of Rule 25A of the Compromises Rules, subject to NCLT sanction and FEMA regulations.

3. What is the "Deemed RBI Approval" mechanism?

Under Regulation 9 of the 2018 Regulations, any cross-border merger structured in strict compliance with the conditions prescribed in the regulations is deemed to have prior approval from the Reserve Bank of India, eliminating the need for a separate physical RBI NOC.

4. Which foreign jurisdictions are permitted for cross-border mergers?

Permitted jurisdictions include countries whose securities regulator is a signatory to the IOSCO Multilateral MoU or has a bilateral MoU with SEBI, and whose central bank is a member of the Bank for International Settlements (BIS), excluding FATF non-compliant jurisdictions.

5. Is an Inbound Merger exempt from capital gains tax in India?

Yes. Under Section 47(vi) and Section 47(vii) of the Income-tax Act, 1961, an Inbound Merger is completely tax-neutral for both the amalgamating foreign company and its shareholders, provided the resultant entity is an Indian company.

6. Is an Outbound Merger exempt from capital gains tax in India?

No. Outbound Mergers are NOT tax-neutral under Indian tax law. The transfer of Indian capital assets, patents, and shares to a foreign resultant company represents a taxable transfer under Section 45, attracting full capital gains tax.

7. How are foreign debts treated in an Inbound Merger?

Under Regulation 4(2), outstanding foreign borrowings of the foreign company become the liability of the Indian resultant company. If non-compliant with ECB norms, the Indian company is granted a statutory period of two years to restructure the debt into compliant ECBs.

8. Can an Indian company retain overseas immovable property after an Inbound Merger?

Under Regulation 4(3), the Indian resultant company may hold overseas assets. If the asset cannot be legally acquired under the FEM (Overseas Investment) Rules, 2022, it must be sold or transferred within two years from the date of the NCLT sanction order.

9. What is the limit for resident individuals receiving foreign shares in an Outbound Merger?

Under Regulation 5(1), the acquisition of securities by a resident individual in the foreign resultant company must fall strictly within the annual limit of the Liberalised Remittance Scheme (LRS), currently $250,000 per financial year.

10. What happens to the Indian office of a merging company in an Outbound Merger?

Under Regulation 5(2), the office of the Indian company automatically becomes a Branch Office (BO) of the foreign resultant company, subject to the Foreign Exchange Management (Establishment in India of a branch office) Regulations.

11. Who is authorized to perform the valuation for a cross-border merger?

Under Rule 25A, the valuation must be performed by valuers who are members of a recognized professional body in their respective jurisdictions, conforming to internationally accepted pricing methodologies.

12. What form must be filed with the ROC upon obtaining the NCLT sanction order?

Under Section 232(5), a certified copy of the NCLT order must be filed in Form INC-28 with the Registrar of Companies within 30 days of the receipt of the order.

13. Can accumulated business losses be carried forward in an Inbound Merger?

Yes. Under Section 72A of the Income-tax Act, accumulated business loss and unabsorbed depreciation of the merging company can be carried forward by the Indian resultant company, subject to satisfying industrial undertaking conditions.

14. What reporting is required to the RBI after the merger is completed?

Under Regulation 9(2), the resultant company must furnish a comprehensive post-merger compliance report to the Reserve Bank of India through an Authorised Dealer Category-I Bank within 180 days of the date of the sanction order.

15. Can an Inbound Merger involve cash consideration to foreign shareholders?

Yes. Under Section 234(2), the scheme of merger may provide for payment of consideration in cash, in depository receipts, or partly in cash and partly in depository receipts.

16. What is a "Reverse Flip" in startup restructuring?

A reverse flip is an Inbound Merger where an offshore holding company (e.g., in Delaware or Singapore) merges into its operating Indian subsidiary, moving ownership back to India to prepare for an Indian IPO, availing tax neutrality under Section 47(vi).