Round Tripping is a financial practice where money or assets are transferred out of a country or entity and then brought back, often to create the appearance of legitimate transactions or investments.
Round Tripping involves routing funds through multiple entities or jurisdictions and returning them to the original source. This can be done for purposes such as tax avoidance, money laundering, or inflating financial statements.
Regulatory bodies like the Securities and Exchange Board of India and the Reserve Bank of India monitor such activities to prevent misuse.
"A company sends funds to an offshore entity and later receives the same money back as “foreign investment”—this is round tripping."