“Since late 2023, demand for moving company headquarters overseas (flip) has risen sharply. Last year, the trend became particularly noticeable,” said An Hee-chul, managing partner at law firm DLG, which has helped South Korean startups with flips for the past decade. “This is mainly seen among early-stage startups with strong technological capabilities,” he added.
As artificial intelligence (AI) emerges as the dominant trend in the startup ecosystem, more companies are considering a flip from the outset to expand into global markets, including the United States.
A corporate flip is when a company moves its legal headquarters overseas, making the foreign entity the parent company and turning the existing Korean entity into a subsidiary. Recently, more serial entrepreneurs have been setting up their holding companies overseas from the start.
According to venture investment tracker The VC on March 18, 186 South Korean startups had overseas headquarters last year, almost six times the 32 recorded in 2014.
The main reason for this shift is access to bigger markets, which can boost company value and attract larger investments. Many startups are following in the footsteps of successful flip pioneers like Sendbird (AI chatbot), Swit Technologies (enterprise collaboration tools), and K-beauty brands Memebox and Melixir.
One AI SaaS (Software-as-a-Service) startup recently launched its third venture in Silicon Valley, despite having no prior connections to the U.S. The goal is to build ties with U.S. investors, making market entry and local fundraising key to its success.
Industry insiders agree that relocating to a larger market helps attract talent. Another recently acquired AI startup said, “With the existing infrastructure in place and an influx of developers from major tech firms, it’s much easier to hire skilled talent on flexible contracts in the U.S. compared to Korea.”
The downturn in South Korea’s venture investment market is another factor pushing startups abroad. According to the Ministry of SMEs and Startups, venture capital market, which peaked at nearly 16 trillion won in 2021 during the COVID-19 pandemic, shrank to 11.95 trillion won in 2024.
To support South Korean startups expanding overseas, startup incubators are establishing offices in Silicon Valley. The Asan Nanum Foundation plans to open its first international hub, Maru SF, in the second half of this year. The facility will offer short-term housing (1–2 months) and networking programs to help startups settle in and grow in the U.S. market.
Startup Alliance is also considering establishing a Silicon Valley office, while the Ministry of SMEs and Startups announced earlier this year its plans to create a K-Startup Silicon Valley Town as a public-private global startup and venture hub.
Experts caution that while flip establishes the necessary corporate structure for startups to operate in U.S. capital markets, it does not guarantee success. The U.S. market is highly competitive, and startups must thoroughly prepare for challenges such as securing funding, adapting to regulations, and establishing a foothold among strong local competitors.
There are also calls for policy guidelines. Kim Sung-hoon, managing partner at law firm Mission, said, “The government doesn’t need to support or regulate flip, but since most investors manage public funds, there should be clear standards on when to approve flip decisions and how to oversee startups after relocation.”
