An inverted domestic corporation (or corporate inversion) occurs when a U.S.-based company relocates its legal headquarters to a foreign country—typically one with lower corporate tax rates—while continuing to operate primarily in the U.S. This is done through mergers or acquisitions with foreign firms, allowing corporations to avoid paying U.S. taxes while still benefiting from American infrastructure, workforce, and markets. Examples include major pharmaceutical and manufacturing companies shifting headquarters to tax havens like Ireland or the Cayman Islands.