How to Register a US Business from India

Overview

India produces more US-facing founders than almost any other country outside the United States itself. Agencies serving American clients, SaaS products with US pricing pages, ecommerce brands shipping into US warehouses, and service exporters who have outgrown invoicing from a proprietorship — all of them eventually arrive at the same question: can I own a US company from India, and how do I do it without falling foul of FEMA?

The short answer is yes, it is entirely legal, and thousands of Indian residents do it. The longer answer involves knowing which Indian rules apply to investing abroad versus earning abroad, and that distinction is where most online guidance goes quiet. This Doc covers both the US mechanics and the Indian side.

Step 1: The Indian Regulatory Picture, Stated Plainly

An Indian resident individual can hold shares in a foreign company. The framework is the Overseas Investment regime under FEMA, read together with the Liberalised Remittance Scheme (LRS), which permits remittances up to USD 250,000 per financial year per person for permitted current and capital account transactions.

Two concepts matter and are routinely confused:

Overseas Direct Investment (ODI) applies when your foreign entity is engaged in a bona fide business activity and you take a controlling or strategic stake. ODI carries reporting obligations through your authorised dealer bank, including the filing of Form FC and an Annual Performance Report.

Overseas Portfolio Investment (OPI) covers smaller, non-controlling stakes in foreign entities within the LRS limit, with lighter reporting.

Additional points that catch founders:

• Investment into a foreign entity that then invests back into India ("round tripping") is restricted and structured layers must be disclosed.
• A resident individual generally cannot make ODI into a foreign entity engaged in financial services activity.
• Money you earn in the US company and leave there is not the same event as money you remit from India to capitalise it. Many Indian founders capitalise the US entity with a few hundred dollars and let it fund itself from revenue thereafter.
• Every remittance you do make should be routed through your bank with the correct purpose code and documented.

None of this makes owning a US company hard. It makes doing it undocumented risky. Work with a chartered accountant who has handled ODI filings, and keep the paperwork from day one.

Step 2: LLC or C-Corporation

LLC — pass-through in the US, low maintenance, no board formalities, ideal for agencies, consultancies, freelancers scaling up and ecommerce brands. Single-member LLCs owned by a non-resident have one non-negotiable annual filing: Form 5472 with a pro-forma 1120, penalty $25,000 if missed.

C-Corporation — a taxable entity at 21% federal. Required in practice for US venture funding, US employee stock options, and any structure a US acquirer would want to buy. Delaware is the standard.

For Indian founders there is one more consideration: an LLC's pass-through income may be taxed in your hands personally in India as foreign income, while a C-Corp's retained profits generally are not taxed in India until distributed. If your plan is to accumulate profit inside the US company and reinvest, the corporation is often the cleaner story. If your plan is to draw everything out annually as a service business, the LLC usually wins on simplicity. Get this reviewed against your personal tax position before filing.

Step 3: Choose the State

Wyoming — the most popular choice for Indian-owned LLCs. Cheap annual report, no state income tax, strong asset protection, minimal public ownership disclosure.

Delaware — the default if investors are in the picture, or if you want the most widely understood corporate law in the world. Slightly higher annual costs.

New Mexico — occasionally used for its low cost and privacy, though banking partners are marginally less comfortable with it.

A state where you have real operations — inventory, staff or an office creates nexus and usually means registering there.

Compare real annual costs in our US state filing and renewal fee explorer before committing.

Step 4: File the Entity

You will need, in order:

1. A name available in the state, avoiding restricted words.
2. A registered agent with an in-state street address — a legal requirement, not an optional service. Bizvee provides this at $49/year.
3. A US business address for banking, Stripe, Amazon and correspondence, separate from the agent address. $149/year through Bizvee, with mail scanned to your dashboard.
4. An operating agreement or bylaws. Banks ask for them. So do payment processors. Generate one free with our operating agreement tool.

State processing is typically one to five business days.

Step 5: EIN Without an SSN

The EIN is the company's federal tax number, issued free by the IRS. Because you do not hold an SSN or ITIN, the instant online route is closed to you; you file Form SS-4 by fax or post and wait two to six weeks, sometimes longer.

Practical guidance built from a lot of rejected applications:

• Copy the entity name character for character from the state certificate.
• Write "Foreign" in the SSN/ITIN field of the responsible party section. You do not need an ITIN first.
• Use a real signature, and a phone number that can be reached from a US call.
• Do not apply before the state issues the certificate; a mismatched formation date sends the form back.
• Indian addresses need careful formatting — state and PIN in the correct fields.

Bizvee's EIN application service files and follows up with the IRS, which matters because the IRS will not proactively tell you an application failed.

Step 6: US Banking from India

Indian founders can and do open US business accounts remotely. Fintech business banking platforms designed for startups are the practical route; traditional branch banks will usually want a signatory in person.

Prepare a clean pack:

• Certificate of Formation / Incorporation
• EIN letter (CP 575 or 147C)
• Operating agreement or bylaws plus banking resolution
• Passport for each beneficial owner
• Proof of Indian residential address in English
• A precise description of the business, customers, and expected monthly volume
• Your US business address

The rejections we see almost always come down to one of three things: a vague business description, an address mismatch between documents, or applying before the EIN letter is in hand. Our banking guide walks through which platforms are currently most receptive to India-resident owners.

Step 7: Payments, Platforms and Getting Paid

With entity, EIN, address and bank in place, the rest unlocks quickly:

• Stripe — a US entity plus US bank plus EIN gives you full US-account capability.
• PayPal Business — straightforward once the entity is verified.
• Shopify Payments — available to US entities with a US bank account.
• Amazon Seller Central — a US entity simplifies onboarding significantly; inventory in US warehouses then triggers state sales tax obligations.

Step 8: Tax on Both Sides

US federal. C-Corp: Form 1120, 21%. Single-member foreign-owned LLC: Form 5472 plus pro-forma 1120, every year, no exceptions. Multi-member LLC: Form 1065 and K-1s. If the LLC has no US office, no US employees and no dependent agent in the US, the income may not be "effectively connected" — but that determination is factual and should be advised, not assumed.

US withholding. Payments to foreign owners can attract withholding. Correct W-8BEN / W-8BEN-E forms matter.

US state. Franchise taxes and annual reports are due regardless of profit.

Sales tax. Economic nexus thresholds create obligations without any physical presence. See our sales tax registration service.

India. Residents are taxed on worldwide income. Foreign assets and foreign entity interests must be disclosed in Schedule FA of your ITR — non-disclosure carries serious consequences under the Black Money Act. Dividends from the US company are taxable in India, and the India–US DTAA provides credit for US tax suffered, claimed via Form 67.

Repatriation. Bring money home through documented channels: dividends, salary, or arm's-length service fees from the US entity to an Indian entity you own. Informal transfers are the single fastest way to turn a legitimate structure into a problem.

Step 9: Compliance Calendar

Mistakes Indian Founders Make Most Often

Ignoring Schedule FA. Disclosure of the foreign entity is not optional and the penalties are severe.

Forgetting Form 5472. $25,000, applied automatically.

Sending money out without purpose codes. Undocumented remittances are the hardest thing to fix retrospectively.

Using a residential Indian address on US platforms. It will trigger manual review at the bank and at Stripe.

Expecting the EIN in a week. Plan for six.

Where Bizvee Fits

Bizvee forms the entity, acts as registered agent, provides the US business address with mail scanning, files and chases the EIN, prepares the operating agreement, introduces banking partners that accept India-resident owners, and keeps the US compliance calendar running. Start with US company formation or book a founder consultation to align the structure with your Indian tax position before anything is filed.