Simply put, a flip is the mirroring of the shares existent in a subsidiary, in a Holding Company (HoldCo), as compensation for the acquisition of majority shares by the Holding Company.

Technically, it is a process of legally creating a Holdco Structure between a local entity (Subsidiary) and a US entity (usually a C.Corp). 

The process involves incorporating a HoldCo and swapping the shares already held in a Subsidiary Company. In return, the new holding company takes the shares in the existing business as it now owns it. 


The flip has become an integral part of African Startups looking to raise capital from the US. Many investors (Angel Investors, VCs, etc.) in the U.S. require the Holding Company of any startup it will be investing in, to incorporate a C. Corp in the US, Delaware being the top choice.

Delaware flips are often investor-driven, and this is for a number of reasons. Asides from the fact that Delaware has one of the best tax regimes in the United States, the corporate legal system is robust and modern. Thus, most investors and lawyers are most familiar with the structure of Delaware corporate entities. 

A Delaware flip can be very complex, so it should only be done when necessary. This difficulty is recognized, and it forms the basis of this write-up. This brief piece highlights the process of flipping a Nigerian entity in Delaware.

A Delaware Flip is in two phases; the incorporation of an entity in Delaware (governed by the laws of Delaware) and the Allotment of Shares in the Nigerian entity to the Delaware entity (governed by Nigerian laws). 

This piece shall be restricted to the latter.


The first step for every Flip is to ensure all annual returns are filed up to date for the company whose shares are to be acquired (Subsidiary). The modalities for filing Annual Returns can be found under Section 417 of CAMA 2020.

The next step is to increase your share capital, where applicable. This is to accommodate for the allotment of shares to the Holding Company in Delaware. The minimum share capital required by the Corporate Affairs Commission for this sort of corporate restructuring is 10million. 

Whether or not the increase is done, statutory payment for the return of allotment is to be paid to the Corporate Affairs Commission (CAC) via the remita portal.

Upon verification of the status of the annual returns, a share increase where applicable and the statutory fees for the return of allotment is made, and all other relevant documents such as the Certificate of the Delaware Incorporation are attached and submitted to the Corporate Affairs Commission for filing.

Below are the necessary documents to be uploaded:

  1. Certificate of Foreign Incorporation
  2. Receipt of Remita Payment.
  3. Resolution approving the flip by the Nigerian and Delaware entities.
  4. Completed CAC return of allotment (Form CAC 5).
  5. Deed of surrender of shares from all previous shareholders of the new subsidiary.
  6. Certificate of share increase (where applicable).
  7. Worksheet for the document, stating courier service to be used.

Once CAC has approved the flip, the final step is to consult with a U.S. qualified lawyer to ensure that all necessary filings on the U.S. side are completed and execute relevant documents such as a Founders Common Stock Purchase Agreement and SPA to effect the mirror. This step is important because when a flip is not properly done, it could create complex problems for the company during the Series A stage. Any previously easy issue then becomes much more complex and expensive. 

If existing shareholders in the Nigerian entity will be transferring their shares to the U.S. entity to complete the flip, a SEC complaint agreement for that exchange will have to be signed by all parties and here is where your U.S. lawyers can help as well. 

Since the Delaware entity will own a majority of the shares in the Nigerian entity, this creates the Holdco structure, making the Delaware entity a substantial shareholder of the Nigerian entity.

This process is also largely similar if the local entity is registered in another African country. You will have to check with local lawyers in the particular jurisdiction for the specifics. Additionally, multiple local entities can be flipped to one Delaware C. Corp, and your lawyers will best advise how this can be done. 

Conclusively, it should be noted that a Delaware Flip comes with all sorts of obligations and tax liabilities. This is why it is important to always consult a lawyer and a tax advisor who can give advice on your personal circumstances before a flip is done.