USA Company Registration from India.
Delaware C-Corp or Wyoming LLC, EIN, US bank account, Stripe - and the India side that formation tools skip: the FEMA ODI or LRS route, RBI reporting and Schedule FA. Run end to end by CA Vraj Changani, Managing Partner at DRSPV & Associates, Mumbai, with the US and India compliance calendar kept after the company exists.
Four kinds of Indian businesses need a US entity.
Indian SaaS and AI founders
Selling software to US customers, pricing in USD and planning a US raise. A Delaware C-Corp is the vehicle US funds and US enterprise procurement teams expect to see.
Exporters and service businesses
Agencies, IT services firms and product exporters billing US clients. A US LLC with a US bank account cuts the friction on invoicing, ACH collections and platform onboarding.
Amazon and e-commerce sellers
Amazon.com, Shopify and other US marketplaces. A US entity with an EIN, a US bank account and a payment stack, with the sales-tax nexus question answered before it becomes a liability.
Startups raising from US investors
US accelerators, angels and VCs lead into a Delaware C-Corp. We structure the entity, the founder stock, the 83(b) elections and the India-side ODI or flip leg before the term sheet, not during it.
Delaware C-Corp vs Wyoming or Delaware LLC - when each fits.
Two real decisions: what type of entity, and in which state. Get the type wrong and you re-form before the round; get the state wrong and you pay two franchise taxes and two registered agents.
Delaware C-Corp
- US tax treatment
- A separate US taxpayer. Pays a flat 21% federal corporate income tax on its own profit; shareholders are taxed again on dividends. Files Form 1120 every year, even at a loss.
- When it fits
- The venture track. Raising from US VCs or accelerators, selling to US enterprise customers, planning a US exit or listing. The only form US institutional funds will lead into - the NVCA financing documents, the YC SAFE, 409A providers and Carta are all built around it.
- The trap
- Double tax on distributed profit. Premature if there is no US capital and no US customer yet: it adds franchise tax, US filings, a Form 5472 obligation and India-side ODI reporting for zero current benefit.
Wyoming LLC
- US tax treatment
- Pass-through by default. A single-member LLC is a disregarded entity and a multi-member LLC is taxed as a partnership; the LLC itself pays no federal income tax. Wyoming has no state income tax, low annual fees and strong owner privacy.
- When it fits
- A services, holding or bootstrapped single-owner vehicle with no VC plan: a consultant or agency billing US clients, an Amazon or e-commerce seller, an IP or property holdco. Often cheaper and simpler than Delaware for a founder who will not raise equity.
- The trap
- A foreign-owned single-member LLC still files a pro-forma Form 1120 with Form 5472 every year. A foreign member can have US-source effectively connected income and a personal Form 1040-NR plus ITIN obligation. VCs refuse K-1 pass-through, so it is the wrong vehicle the moment institutional equity is on the table.
Delaware LLC
- US tax treatment
- Same pass-through treatment as any LLC, under Delaware law. Delaware charges a flat annual LLC tax, due 1 June each year, plus the registered agent.
- When it fits
- A founder who wants Delaware predictability today with an LLC, and a clean path to convert into a Delaware C-Corp by statutory conversion before a priced round (generally structured tax-deferred under IRC section 351, US tax counsel signs the conversion).
- The trap
- The same Form 5472 and ECI catches as any foreign-owned LLC. Do not leave the conversion to term-sheet week.
- An S-Corp is not an option for an Indian founder: every shareholder must be a US citizen or US resident. It is listed only to rule it out.
- If there is no US capital and no US customer yet, a Delaware C-Corp is premature. It adds franchise tax, US federal and state filings, a Form 5472 obligation and India-side ODI reporting for zero current benefit. We re-test at the round or the customer that actually requires it.
LLC vs Delaware C-Corp - the decision table
Read it row by row. If the first row is a yes, the answer is usually the C-Corp; if every row points the other way, the LLC is usually enough.
| Factor | LLC (Wyoming or Delaware) | Delaware C-Corp |
|---|---|---|
| Raising equity from US VCs or accelerators | Not a fit. US funds do not invest into a pass-through LLC that issues K-1s; it would have to convert first. | The standard. Priced rounds, SAFEs and the NVCA financing documents are built around a Delaware C-Corp. |
| US federal income tax | No entity-level federal income tax by default (pass-through). A foreign member with US effectively connected income can owe US tax personally and file Form 1040-NR. | Flat 21% federal corporate income tax on profit, plus US withholding on dividends paid out, at the India-US treaty rate for an Indian shareholder. |
| Annual federal filing | Pro-forma Form 1120 with Form 5472 for a foreign-owned single-member LLC, even with no income. | Form 1120 every year, with Form 5472 where a 25%-or-more owner is foreign and there are reportable transactions. |
| State running cost (ranges) | Roughly USD 60 (Wyoming minimum annual licence tax) to USD 300 (Delaware LLC flat annual tax) a year, plus the registered agent. | Delaware annual report fee of USD 50 plus franchise tax from a USD 400 minimum under the Assumed Par Value method, plus the registered agent. |
| Stock options, SAFEs and 83(b) | Profits interests and unit grants are possible, but unfamiliar to most investors and employees. | Common and preferred stock, an option pool backed by a 409A valuation, SAFEs and 83(b) elections are all routine. |
| India side (FEMA) | ODI by the Indian company, or ODI within the LRS limit by the founder, with Form FC, the APR and Schedule FA. | The same FEMA analysis and the same filings; the US entity type does not change the India route. |
| Changing your mind later | Can convert into a Delaware C-Corp before a priced round; US tax counsel structures and signs the conversion. | Converting a C-Corp back into an LLC is generally a taxable event, so pick the C-Corp when the equity path is real. |
| Usually best for | Agencies, consultants, exporters, Amazon and e-commerce sellers and holding vehicles with no institutional equity plan. | SaaS and AI startups raising from US investors, selling to US enterprises or planning a US exit. |
A rule of thumb, not advice for your case: every figure in the table can change, and the final call is made on the scoping call with your numbers.
From name check to Form 5472 - the US side, in order.
The shell can be formed in days. The two real bottlenecks for an Indian founder are the EIN and the bank; the two real traps are the Delaware franchise-tax method and Form 5472. Every figure below can change, because US fees and deadlines move.
- 01
Name check
Confirm the name on the Delaware Division of Corporations name search (free) or the Wyoming Secretary of State database for a Wyoming entity, and run a USPTO trademark check at the same time. The bank application name must later match the IRS EIN record and the formation certificate exactly.
- 02
Registered agent
Every Delaware or Wyoming entity must keep a registered agent with a physical street address in the state to receive service of process and state mail. A non-resident founder has no such address, so a commercial agent is mandatory. It is a recurring annual cost, typically in the low hundreds of USD per year.
- 03
Formation
File the Certificate of Incorporation (C-Corp) or the Articles of Organization (LLC) with the state. The Delaware state filing fee scales with authorized shares and par value, and same-day or next-day expedited filing is available for an extra state fee. For a C-Corp we set the authorized shares and par value deliberately - the common startup default is 10,000,000 authorized shares at a tiny par value such as USD 0.00001 - because these two numbers drive the Delaware franchise-tax bill later.
- 04
EIN (the number-one bottleneck)
The Employer Identification Number is the company's US federal tax ID, issued free by the IRS. No EIN means no bank account, no Stripe, no payroll and no tax filing. The instant online EIN tool needs a responsible party with an SSN or ITIN, so an Indian founder without one files IRS Form SS-4 by fax or mail with FOREIGN on the responsible-party tax-ID line. By fax the EIN generally comes back in about 4 business days; by mail about 4 weeks. The IRS international EIN line (+1-267-941-1099, not toll-free) is a third route. We start the SS-4 the day the certificate is stamped.
- 05
ITIN, only if a founder needs one
An Individual Taxpayer Identification Number (IRS Form W-7) is needed only when a founder has a personal US filing obligation - for example a member of an LLC with US-source effectively connected income filing Form 1040-NR, or a founder claiming certain treaty positions. A C-Corp shareholder with no personal US filing does not need one. Where an ITIN is needed, a Certifying Acceptance Agent route avoids mailing the original passport.
- 06
US bank account
Traditional US banks usually want an in-person visit by an authorized signer, a US address and sometimes an SSN or ITIN. The realistic day-one route for a remote Indian founder is a fintech platform: Mercury is the most common path for a venture-track C-Corp, Brex once the company is funded, Relay or Wise Business for a services LLC receiving USD. Approval is case-by-case, and the decision typically lands 1 to 5 business days after the EIN. We prepare the full pack before applying: the IRS EIN letter (CP-575), the stamped certificate, bylaws or operating agreement, passports of every 25%-or-more owner, proof of address, a concrete business description and the cap table. A complete pack improves the odds; it does not decide the outcome. Each bank or platform approves or declines on its own risk policy, and no adviser can promise an account.
- 07
Stripe and the payment stack
Stripe, PayPal and marketplace payouts are set up on the US entity once the EIN and the bank account exist, subject to each provider's own review - approval is the provider's decision, not ours. Forming independently and adding Stripe afterwards is the usual Stripe Atlas alternative from India: the shell is a commodity, the structure is not. Once US sales cross a state's economic-nexus threshold - the common post-Wayfair pattern is USD 100,000 of sales or 200 transactions into the state per year, and many states have dropped the transaction test - sales-tax registration and a tool such as Stripe Tax, Avalara or TaxJar come in. SaaS taxability varies by state.
- 08
Operating agreement or bylaws, stock and 83(b)
An LLC adopts an operating agreement. A C-Corp adopts bylaws and an organizational board consent that appoints directors and officers, authorizes the share issuance and the bank account. Founder common stock is issued against cash and an IP assignment so the company, not the founder personally, owns the code and the brand. Where founder stock vests, the 83(b) election must reach the IRS within 30 days of the grant with no extension; the IRS now has a standard form (Form 15620) and an electronic filing option. Missing this window is one of the most expensive irreversible founder mistakes.
- 09
State franchise tax and annual report
A Delaware corporation files an annual report and pays franchise tax by 1 March every year; the annual report fee is USD 50 plus the tax. Delaware bills by the Authorized Shares method, which with 10,000,000 authorized shares can read in the tens of thousands of USD. We recompute under the Assumed Par Value Capital method - USD 400 per USD 1 million of assumed par value capital, minimum USD 400 - and file the lower number. A Wyoming LLC files its annual report and licence tax in its anniversary month; a Delaware LLC pays its flat annual tax by 1 June. State income or franchise tax is owed wherever the company has nexus (an office, employees, sometimes significant sales), independent of the state of formation.
- 10
Form 5472 with a pro-forma 1120, or Form 1120
A C-Corp files Form 1120 every year, generally by the 15th day of the fourth month after year-end (mid-April for a calendar year, extension available), even when it made a loss. A corporation with a 25%-or-more foreign owner attaches Form 5472 reporting every transaction with that owner - the share issuance itself, capital contributions, loans, intercompany payments. A foreign-owned single-member LLC files a pro-forma Form 1120 with Form 5472 even though it pays no income tax. The penalty is USD 25,000 per failure, plus a further USD 25,000 for each 30-day period the failure continues beyond 90 days after IRS notice, with no maximum, per foreign related party. We put it on the calendar at formation, not at the first profit.
- 11
FBAR / FATCA and beneficial-ownership reporting
FBAR (FinCEN Form 114) and FATCA (Form 8938) are filed by US persons with foreign financial accounts or assets - the FBAR above an aggregate threshold commonly cited at USD 10,000, and Form 8938 above higher thresholds that depend on filing status and where the taxpayer lives, for example more than USD 50,000 on the last day of the year or more than USD 75,000 at any time for an unmarried taxpayer living in the US. A non-resident Indian founder is generally not a US person, so these do not apply personally; they start once a founder becomes a US tax resident by green card or substantial presence. The US company itself is a US person for the FBAR, including a single-member LLC that is disregarded for income tax: if it holds an account outside the US, such as an Indian bank account, above the threshold, the company files. The India-side mirror is Schedule FA. On beneficial-ownership (BOI) reporting under the Corporate Transparency Act, FinCEN's interim final rule of March 2025 exempts US-formed entities and US persons, so a US-formed LLC or C-Corp owned by Indian founders does not file a BOI report under the current rule; a foreign entity registered to do business in a US state can still be in scope, so we check the position live with US counsel before relying on it.
FEMA, RBI and the Indian ITR - the part Stripe Atlas does not do.
A founder who forms a Delaware company and then moves the India cap table or invoicing through it has usually created an unreported outbound investment. Structure first, incorporate last.
Route 1 - ODI by the Indian company
When the Indian operating company should own the US entity (a subsidiary for US sales, a group structure, consolidated accounts), the investment is Overseas Direct Investment under the FEM (Overseas Investment) Rules, Regulations and Directions 2022. It goes through the AD bank on the automatic route within the financial-commitment ceiling of 400% of the Indian company's net worth. The AD bank files Form FC at the time of each financial commitment and RBI allots a Unique Identification Number; evidence of investment (share certificates) must reach the AD bank within six months of the remittance.
Route 2 - LRS by the resident founder
When the founders personally want to own the US company (a US parent above the India entity, a personal agency LLC, an Amazon seller entity), each resident individual remits under the Liberalised Remittance Scheme, capped at USD 250,000 per person per financial year, with tax collected at source on remittances above the annual threshold at the applicable rate. Under the OI Rules 2022 an individual's investment in the equity of an unlisted foreign company - which a new US company is - is ODI at any percentage, not only at a stake of 10% or more or with control; the 10%-or-control test separates ODI from portfolio investment only in a listed foreign company. So the founder's stake is ODI made within the LRS limit: Form FC, the UIN and the annual reporting apply, investment by an individual into a foreign financial-services entity is restricted, and conditions on control and step-down subsidiaries apply to individuals in some structures. Round-tripping and layering limits apply if the US company will invest back into India.
The flip is a separate exercise
Swapping the shares of an existing Indian private limited company up into a new US parent is not a clean greenfield ODI. It crystallises Indian capital gains for the founders, needs a registered valuer's report, FEMA reporting on every leg (FC-TRS or FC-GPR inbound, Form FC and APR outbound) and a round-tripping analysis. We model the flip-versus-stay decision and the tax bill before anything is filed.
RBI reporting after the money goes out
Annual Performance Report (APR) for each foreign entity, filed through the AD bank by 31 December every year. Foreign Liabilities and Assets (FLA) return to RBI by 15 July every year on the FLAIR portal, for any Indian entity with an outstanding overseas asset. Late Submission Fee and, for substantive breaches, compounding under FEMA are the cost of missing these.
Schedule FA in the Indian income-tax return
Every resident Indian who holds shares in the US company, or is a signatory on the US bank account (as a founder who is a director usually is), discloses it under Schedule FA of the Indian ITR, on a calendar-year basis for the foreign asset. Being a director with no shares and no signing authority is not by itself a Schedule FA line. Non-disclosure sits under the Black Money Act with a penalty of Rs 10 lakh per year, subject to a de minimis relief for small balances. We map every founder's Schedule FA line at formation so the first ITR after the remittance is right.
DTAA, POEM and transfer pricing
The India-US tax treaty sets the withholding on dividends, interest, royalties and fees for included services; dividends from the US company to an Indian shareholder are withheld at the treaty rate (15% for a company holding at least 10% of the voting stock, 25% otherwise), claimed through Form W-8BEN or W-8BEN-E, with credit in India through Form 67. If the US company is effectively managed from India it can become an Indian tax resident under the place-of-effective-management test, which applies once turnover crosses Rs 50 crore, so board decisions must genuinely sit where the company says they do. Once the Indian and US entities transact, Indian transfer pricing applies at arm's length with Form 3CEB and a transfer-pricing study.
What we would usually set up - US side and India side together.
Starting points, not answers: the facts of each business change the structure, and every figure can change.
SaaS founder selling to US customers
- US structure
- A Delaware C-Corp if a US raise or US enterprise contracts are realistic; otherwise a US LLC, or no US entity yet and invoicing from the Indian company.
- India route
- Usually the Indian company invests as ODI and the US company becomes its subsidiary. Where the raise will happen at the US level, the founders invest within the LRS limit (still ODI, because the US company is unlisted) or the structure is planned as a flip.
- Key filings
- Form 1120 with Form 5472, Delaware franchise tax and annual report by 1 March, state sales-tax registration once economic nexus is crossed, Form FC and the APR, Form 3CEB once the Indian and US entities transact, and Schedule FA for every founder.
- Watch out for
- SaaS taxability differs state by state, and intercompany development charges must be priced at arm's length on both sides.
Exporter or services firm billing US clients
- US structure
- Often no US entity is needed: the Indian company can invoice US clients and receive USD directly. Where a US client or platform insists on a US counterparty, a Wyoming or Delaware LLC owned by the Indian company is the usual vehicle.
- India route
- ODI by the Indian company through the AD bank, with Form FC, the UIN, the APR and the FLA return.
- Key filings
- Pro-forma Form 1120 with Form 5472 every year, the state annual report, an FBAR by the US LLC if it holds accounts outside the US above USD 10,000 in aggregate, and Form 3CEB on the India-US transactions.
- Watch out for
- If the work and the decisions stay in India, test the place-of-effective-management and permanent-establishment position before the first invoice.
Amazon or e-commerce seller
- US structure
- A US LLC (Wyoming or Delaware) with an EIN, a US bank account and the marketplace and payment accounts in its own name; a C-Corp only if outside investors are planned.
- India route
- ODI by the Indian company, or ODI within the LRS limit where the founder owns the LLC personally - either way Form FC and the annual reporting apply.
- Key filings
- Pro-forma Form 1120 with Form 5472 every year and the state annual report. Marketplaces generally collect and remit sales tax on their own platform under marketplace facilitator laws, but sales through your own website stay your responsibility.
- Watch out for
- Inventory stored in a US warehouse, including a marketplace fulfilment centre, can create state nexus on its own. Marketplace and payment-account approval is the platform's decision.
Startup raising from US investors
- US structure
- A Delaware C-Corp, usually as the parent. If an Indian company already exists, the choice is a flip (the US company on top) or a US subsidiary under the Indian company, modelled with the tax bill before anything is signed.
- India route
- Founders subscribe within the LRS limit as ODI, or the flip is run with a registered valuer's report, FEMA reporting on every leg and a round-tripping analysis.
- Key filings
- 83(b) elections within 30 days of any vesting stock grant, a 409A valuation before options, Form 1120 with Form 5472, Delaware franchise tax, and in India Form FC, the APR and Schedule FA.
- Watch out for
- We can make the structure investor-ready; whether investors invest, and at what valuation, is their decision. We do not promise funding.
Three to six weeks, if the EIN is filed on day one.
Structure call and diagnostic: whether a US entity is needed now, C-Corp or LLC, Delaware or Wyoming, company ODI or founder LRS, and every recurring obligation named before anything is filed.
Name check, registered agent appointed, formation filed (Delaware same-day or next-day expedite available), bylaws or operating agreement, founder stock and IP assignment, 83(b) elections started.
EIN: Form SS-4 by fax, generally back in about 4 business days (about 4 weeks by mail). In parallel the bank document pack is completed and the AD bank KYC for the India-side remittance begins.
Bank application submitted the day the EIN lands; decision typically within 1 to 5 business days, and the decision is the bank's own. Stripe and the payment stack are set up on the account, subject to each provider's review. Form FC is filed by the AD bank at the time of the remittance.
Working US company with bank, payments and cap table in place; the US and India compliance calendar handed over. Three to six weeks end to end is typical; the EIN and the bank are the critical path, everything else is paperwork. A slow IRS queue, or a bank or platform that asks for more documents, moves every date after it.
Costs as ranges - never a single headline number.
Third-party charges set by the states, the IRS and the banks, plus our own fee. Every figure is a range and can change, because state fees and provider pricing change.
How CA Vraj Changani runs it end to end.
Diagnostic before formation
One call to settle whether a US entity is needed now, C-Corp or LLC, Delaware or Wyoming, and whether the money leaves India as company ODI, founder LRS or a flip. Every recurring obligation - Form 5472, franchise tax, APR, FLA, Schedule FA - is named and dated before the first filing.
Formation, EIN and bank as one critical path
Registered agent, formation, bylaws or operating agreement, founder stock and 83(b) elections, then the SS-4 the day the certificate is stamped. The bank document pack is ready before the EIN lands, and the application goes in the day it does. Bespoke charters and multi-class cap tables go through US counsel.
India side filed with the AD bank
Form FC at the remittance, the UIN, evidence of investment, the APR and the FLA return, Schedule FA in every founder's ITR, and the transfer-pricing file (Form 3CEB) once the Indian and US entities transact. The CA certificates that FEMA filings need come from the DRSPV & Associates bench.
Who signs what
US federal and state returns (Form 1120, Form 5472, state franchise and sales-tax filings) are prepared and signed by a US CPA or enrolled agent we coordinate; US tax counsel signs the nexus, 409A and conversion positions. India-side certifications (Form FC, Form 3CEB, valuation reports) are signed by the CA. We advise across both sides so nothing falls between the two.
Every date and amount above can change: US state fees, IRS deadlines and RBI due dates change, and we confirm each one against the live source before it goes on a client calendar.
- A US bank account, Stripe or marketplace approval. We prepare a complete, consistent application; the bank or platform approves or declines on its own risk policy.
- Funding or a valuation. We can make the structure investor-ready; whether investors invest, and at what price, is their decision.
- A tax saving. The structure is chosen for the business, and the tax result follows the facts and the law in both countries.
- A visa, green card or any immigration outcome. Owning or directing a US company does not by itself give a right to live or work in the US; that question belongs with a US immigration lawyer.
- An RBI, AD bank or IRS decision. We aim to file correctly and on time once we have the facts and the signatory's sign-off; the regulator, the bank or the IRS decides.
- Zero-risk compliance. We keep the calendar, aim to file on time once we have the facts, and flag what changes; the outcome still depends on the facts the business gives us, on the signatory who files each return, and on rules that move.
What we do commit to: keeping the US and India calendar, preparing each filing ahead of its due date once we have the facts, and naming the right signatory for each one - a US CPA or US counsel, the CA, or the AD bank.
USA company registration from India - the eight questions we get.
Can an Indian resident own 100% of a US company without a US partner, visa or address?
Yes. No US residency or citizenship is needed to incorporate, direct or own a Delaware C-Corp or a Wyoming LLC; a 100%-Indian-owned US company is routine. The gating items are the EIN and the bank account, not eligibility. On the India side the money has to leave through a FEMA route - ODI by the Indian company or LRS by the founder - and that choice is made before the formation, not after. Owning or directing a US company does not by itself give a US visa or any right to live or work in the US; immigration is a separate question for a US immigration lawyer.
Delaware C-Corp or Wyoming LLC - which one should an Indian founder pick?
C-Corp if you will raise from US investors, sell to US enterprises or plan a US exit: it is the only form US funds lead into. LLC (Wyoming or Delaware) for a services, agency, e-commerce or holding vehicle with no equity-raise plan: pass-through tax, lower running cost, but a foreign-owned LLC still files a pro-forma 1120 with Form 5472 every year. An LLC can convert to a C-Corp before a priced round (US tax counsel structures it). An S-Corp is not available because every shareholder must be a US citizen or resident.
How do I get an EIN without a Social Security Number?
File IRS Form SS-4 by fax or mail with FOREIGN entered on the responsible-party tax-ID line, because the online EIN tool needs an SSN or ITIN. By fax the EIN generally returns in about 4 business days, by mail about 4 weeks; the IRS international line is a third route. The EIN itself is free from the IRS - a service charging for it is charging for the legwork. We file the SS-4 the day the certificate is stamped because nothing else moves until it lands.
Can I open a US bank account from India without travelling?
Yes, through fintech platforms that onboard non-resident founders remotely - Mercury is the usual first choice for a C-Corp, Brex once funded, Relay or Wise Business for a services LLC. Traditional banks usually require an in-person visit and sometimes an SSN or a US address. Approval is case-by-case and typically decided 1 to 5 business days after the EIN. A complete document pack, an exact name match with the IRS record and a concrete business description are what get an application through. They improve the odds; they do not decide the outcome - approval is the bank's or platform's own decision, and no adviser can promise it.
What is Form 5472 and why does every US CPA warn Indian founders about it?
Form 5472 reports transactions between a US company and its 25%-or-more foreign owner - including the share issuance and any capital contribution or loan. An Indian-owned C-Corp attaches it to Form 1120; a foreign-owned single-member LLC files it with a pro-forma 1120 even with zero income. The penalty is USD 25,000 per failure, plus USD 25,000 for every 30-day period the failure continues beyond 90 days after IRS notice, with no maximum and one penalty per foreign related party. The dormant, no-revenue shell is exactly the one that forgets it.
What does the Indian side require - ODI or LRS, and which RBI forms?
If the Indian company invests, it is ODI on the automatic route within the ceiling of 400% of net worth: Form FC through the AD bank at each remittance, a UIN from RBI, evidence of investment within six months, the APR by 31 December every year and the FLA return by 15 July every year. If a founder invests personally it is LRS, capped at USD 250,000 per person per financial year, with TCS on the remittance above the threshold; and because a new US company is unlisted, the founder's stake is ODI at any percentage - a 10%-or-more stake or control is the test only for a listed foreign company - so Form FC, the UIN and the APR apply to the individual too, subject to the limited exemptions in the OI Regulations. Either way every resident founder discloses the shares and any US bank signatory role under Schedule FA of the Indian ITR.
How long does it take and what does it cost?
Three to six weeks from formation to a working company with a bank account and payments is typical; the EIN (about 4 business days by fax) and the bank decision (1 to 5 business days after the EIN) are the critical path. Third-party costs run in ranges: the state filing fee and a registered agent in the low hundreds of USD per year, the Delaware annual report fee of USD 50 plus franchise tax with a USD 400 minimum under the Assumed Par Value method, bank and payment-platform fees per provider, plus the India-side AD bank charges. Professional fees are quoted after the scoping call as a fixed range for the formation and a separate range for the annual US-plus-India compliance calendar.
Will my US company also be taxed in India?
It can be, if it is effectively managed from India: the place-of-effective-management test applies once turnover crosses Rs 50 crore, so board decisions must genuinely be taken where the company says they are. Dividends paid to an Indian shareholder are withheld in the US at the India-US treaty rate (15% for a corporate shareholder holding at least 10%, 25% otherwise) and the Indian shareholder claims credit through Form 67. Once the Indian and US entities transact - development services, IP licences, intercompany loans - Indian transfer pricing applies at arm's length with Form 3CEB and a transfer-pricing study.
- Delaware C-Corp vs Wyoming LLC for Indian Founders
- ODI vs LRS: Owning a US Company from India Under FEMA
- US Bank Account from India: The Founder's Payment Stack
- US Tax Calendar for Indian-Owned LLCs and C-Corps (5472, 1120)
- UAE Free Zone Company from India: Setup and Compliance
- Singapore Pte Ltd from India: Setup and Annual Compliance
- UK Limited Company from India: Setup, Tax and Compliance
- Vraj Changani - CA, Startup Advisor & IPO Consultant
Tell me what you sell and to whom.
Three lines on WhatsApp is enough: the business, whether US investors are in the picture, and whether the Indian company or the founders will own the US entity. I will come back with the structure, the route out of India and a fixed-range quote.
WhatsApp +91 88664 48967 - CA Vraj Changani, DRSPV & Associates, Mumbai.