Indian founders usually form a Delaware C-corporation if they plan to raise US venture capital, or an LLC for simpler operations. You appoint a registered agent, file the certificate of incorporation or formation, obtain an EIN from the IRS, and open a US bank account. Indian residents must invest through an AD bank under FEMA Overseas Investment Rules.
C-corp vs LLC
| Factor | C-corp | LLC |
|---|---|---|
| VC funding | Preferred | Rarely |
| US tax | Corporate income tax | Pass-through by default |
| Compliance | Higher | Lighter |
Setup steps
- Choose state and entity type.
- Appoint registered agent.
- File formation documents.
- Adopt bylaws or operating agreement and issue stock or units.
- Obtain EIN and open a bank account.
Ongoing US compliance
- Delaware franchise tax and annual report
- Federal and state tax returns
- Beneficial ownership reporting where applicable
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Resident founders report the investment through an AD bank, file annual performance reports, and disclose foreign assets in their Indian tax returns.
Frequently asked questions
Can I form a US company without visiting the US?
Yes. Formation, EIN and some bank accounts can be done remotely.
Is an Indian subsidiary needed?
Many startups create a US parent with an Indian subsidiary for the team, but this structure needs careful FEMA and tax planning.
What is a flip?
A flip moves ownership of an Indian company under a new foreign holding company, often before US fundraising. It has tax and FEMA implications.
Do I pay tax in both countries?
Possibly. The India-US tax treaty and foreign tax credits help avoid double taxation.
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