Thinking about entering the US market from India?
Whether you are a startup founder, consultant, IT company, SaaS entrepreneur, e-commerce seller, manufacturer, exporter, agency owner or an established Indian business, learning how to start a business in the USA is only the beginning.
The real question is: what should you set up, where should you set it up, how will it be taxed, and how will you keep both the US and India sides compliant?
The United States gives Indian entrepreneurs access to a large customer market, investors, payment infrastructure and partners. But forming a US company does not by itself make you tax compliant, get you a visa, open a bank account or authorise you to work in the country. And the entity that is cheapest to form is not the one with the lightest filing obligations.
This page sets out what US federal and state law actually requires, with the provision behind each requirement, so you can check it before you file.
Comply Globally helps Indian entrepreneurs and businesses establish, structure and manage their US presence across LLC and C-Corp formation, EIN, registered-agent coordination, US tax and IRS compliance, banking, FEMA/ODI and cross-border requirements.
Why Start a Business in the USA?
For an Indian entrepreneur, a US business can be about far more than a US-registered company. Common objectives include access to US customers, a local entity for American contracts, better positioning with international clients, access to US investors, a base for North American expansion, a US bank account, payment and merchant-processing options, a local company for e-commerce or SaaS, a subsidiary for an Indian parent, US hiring, or a structure for international trade.
So the right way to start a business in the USA is not: pick a popular state, pay a filing fee, get a certificate. It is,
- Business model
- Entity
- State
- Tax classification
- Banking
- Compliance
- Operations
The order matters, because each choice constrains the next.
Can an Indian Citizen Start a Business in the USA?
Yes. Ownership and immigration are two different questions.
Indian entrepreneurs can establish US businesses without becoming US citizens or residents. No federal law restricts foreign ownership of an ordinary LLC or corporation, and state formation statutes generally do not impose citizenship or residency requirements on members, shareholders, directors or officers. Unlike Canada, which requires resident directors federally, and unlike much of Europe, the United States imposes no director residency requirement in the states Indian founders normally use.
Separate three questions that are routinely collapsed into one:
Forming a US company. A corporate and legal process, generally available to non-residents.
Operating a US company from India. Usually possible without relocating, though it raises tax questions rather than removing them.
Working physically in the USA. An immigration question requiring an appropriate visa or work authorisation.
Owning a US company does not give you the right to live or work in the United States.
Understand this before spending money on formation or immigration services, because the two are sold together far more often than they belong together.
LLC vs C-Corp: Which Is Better for an Indian Entrepreneur?
There is no universally best US entity. The right structure depends on what you are building, and for a foreign owner on which filing regime you are willing to carry.
| Factor | LLC | C Corporation |
|---|---|---|
Common use |
Owner-operated and operating businesses |
Startups seeking institutional investment |
Ownership |
Membership interests |
Shares of stock |
Federal tax treatment |
Depends on classification. A single-member LLC is by default a disregarded entity; a multi-member LLC is by default a partnership. Either can elect corporate treatment on Form 8832. |
Taxed as a corporation. Federal rate 21% under IRC §11(b) |
Foreign-owner reporting |
A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120 under Treas. Reg. §1.6038A-1(c). A multi-member LLC with foreign partners faces partnership withholding on effectively connected income under IRC §1446 |
A US corporation at least 25% foreign-owned files Form 5472 with its Form 1120 under IRC §6038A |
VC fundraising |
Usually not preferred |
Commonly preferred; Delaware C-Corp is the market standard |
Equity plans |
More limited depending on structure |
Highly suitable — options, SAFEs, convertible instruments |
Indian tax analysis |
Can be complex, because India may characterise the entity differently from the US |
More straightforward conceptually |
Suitable for |
Services, consulting, e-commerce, lean operations |
Venture-backed growth |
Do not choose an LLC because it is cheaper to form, and do not choose a Delaware C-Corp because every startup article mentions Delaware. The filing burden, not the formation fee, is where the cost sits.
The cheap entity carries the expensive filing.
Since tax years beginning on or after 1 January 2017, a foreign-owned US disregarded entity is treated as a domestic corporation solely for the reporting requirements of IRC §6038A. In practice that means a single-member LLC owned by an Indian person or company must file Form 5472 attached to a pro forma Form 1120 by mail or fax, because the package cannot be e-filed — whenever it has a reportable transaction with a related party.
There is no de minimis threshold. The transfer you make to fund the LLC at formation is itself a reportable transaction. So is a loan from you to the company, or the use of company property without full consideration. The penalty under IRC §6038A(d) is USD 25,000 for a failure to file, an incomplete filing or a late filing, per form, per year and with a further USD 25,000 for each 30-day period after the IRS gives notice.
Eighteen criteria across the four US routes, with the provision behind each. Classification, foreign-owner reporting, withholding, state exposure and India-side FEMA treatment side by side.
What “LLC Taxation” Actually Means for a Foreign Owner
An LLC is a state-law entity. It has no federal tax classification of its own, it takes one from the check-the-box regulations, and that classification decides your filings.
| Structure | Default federal treatment | What you file |
|---|---|---|
Single-member LLC, Indian owner |
Disregarded entity |
Pro forma Form 1120 with Form 5472. The income itself may be reportable by the owner depending on whether the LLC is engaged in a US trade or business |
Multi-member LLC with foreign members |
Partnership |
Form 1065 with Schedules K-1 and K-2/K-3. If the partnership has effectively connected income allocable to a foreign partner, IRC §1446 requires the partnership to withhold and remit tax on that income — a real cash-flow cost, not a year-end adjustment |
LLC electing corporate treatment |
Corporation, by election on Form 8832 |
Form 1120, with Form 5472 where 25% foreign-owned |
C Corporation | Corporation |
Form 1120 at the 21% federal rate under IRC §11(b), with Form 5472 where 25% foreign-owned |
So the question is not “should I open an LLC?”. It is: how will my US entity be classified for US tax purposes, what does that classification make me file, and how will India treat the same entity? An entity that India characterises differently from the US can produce a credit mismatch that no amount of careful US filing will fix afterwards.
A decision path through classification, reportable transactions and the filing package, with a transaction log to keep during the year and the exact procedural traps that turn a filed return into an unfiled one.
Which US State Should You Choose?
The United States has no national company register. Entities are created under state law, so the state decides your filing requirements, annual reports, franchise taxes, state income taxes, registered-agent obligations, governance rules and dissolution process.
It does not, however, decide where you are taxed. That is settled by where you actually do business and which is the distinction most Indian founders discover late.
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Delaware
Delaware suits companies that anticipate institutional investors, multiple classes of stock or sophisticated governance. It is the market default for venture-backed C-Corps, and investors expect it.
Its published annual costs are straightforward and worth budgeting from day one. Delaware corporations file an annual report and pay franchise tax by 1 March: the annual report fee is USD 50, and the minimum franchise tax is USD 175 under the authorised shares method or USD 400 under the assumed par value capital method, so a small corporation typically pays USD 225 a year. Delaware LLCs file no annual report but pay a flat USD 300 annual tax by 1 June. Late payment attracts a USD 200 penalty plus interest at 1.5% per month, and eventually loss of good standing.
A note founders routinely miss: the franchise tax is not an income tax and does not depend on trading. A dormant Delaware entity still owes it every year until it is formally dissolved.
Wyoming
Wyoming is often chosen by smaller owner-operated businesses for its low annual cost. The annual report license tax starts at USD 60. It suits consultants, agencies, online businesses and small operating companies.
What Wyoming does not do is remove tax. It removes one state's income tax, which is only relevant if that is the state you would otherwise have been taxed in.
Florida, Texas, California, New York and your actual operating state
These are worth examining when they are your genuine operating location rather than a formation address. California in particular imposes a minimum annual franchise tax of USD 800 on entities doing business there, whatever state they were formed in, which is why a Wyoming LLC operating out of Los Angeles is not a cheap structure.
State of formation and state of operation are not the same thing.
Forming in Wyoming or Delaware does not stop another state from taxing you or requiring you to register there. If you do business in a state through an office, employees, inventory, or in many states, economic activity alone, you generally must foreign qualify in that state, pay its fees and file its returns.
The sanction is worth knowing before you rely on ignoring it. In many states, an entity transacting business without authority cannot maintain an action in that state’s courts until it registers. You discover that at the moment you try to sue a customer who has not paid.
When a second state becomes mandatory, what P.L. 86-272 does and does not protect, how economic nexus works after Wayfair, and a state-by-state tracker to keep with your records.
Business Search USA and Free Business Name Search
Business records in the US are maintained by individual states rather than one national database, so a name search means searching the relevant Secretary of State or equivalent registry. Depending on the state you can check existing names, entity status, registration numbers, formation dates and registered-agent information where published.
The correct sequence is: decide the state, search that state’s registry, search similar names as well as exact matches (spelling variants, singular and plural, abbreviations, phonetic near-misses), search the USPTO trademark database, then check domains and social handles.
A registry search is not trademark clearance. A name can be available for formation in a state and still infringe a federal trademark, and formation gives you no trademark rights. Trademark rights come from use and from registration under the Lanham Act, not from a certificate of formation.
Starting a Service Business in the USA From India
You do not need a store, warehouse or factory. IT consulting, software development, digital marketing, management consulting, design, recruitment, SaaS, education and other B2B services are all commonly run through a US entity while delivery stays in India.
A typical structure has the Indian company providing technology and delivery, the US company holding the customer contracts and relationships, and US customers contracting only with the US entity. That is commercially useful and it needs documentation, because the intercompany relationship is what the IRS and the Indian tax authority will both look at.
Four questions decide the tax outcome, and none of them is answered by the certificate of formation: where the services are physically performed, who performs them, which entity contracts with the customer, and how the Indian company is compensated. Transfer pricing between the two entities is governed on the US side by IRC §482, which allows the IRS to reallocate income between commonly controlled entities to reflect arm’s-length terms, and on the Indian side by ss.92–92F of the Income-tax Act, 1961.
Forming a US LLC does not mean every dollar from US customers is taxed the same way. It means you now have two tax systems looking at the same profit and asking which of them it belongs to.
How to Start a Business in the USA From India: Step by Step
Define the objective
“I want to sell services to US clients.” “I want a US entity for my SaaS startup.” “I want a US subsidiary of my Indian company.” “I want to sell it on Amazon US.” “I want to raise from American investors.” These lead to different entities, different states and different filings.
Evaluate LLC against C-Corp against a foreign registration of the Indian company, considering ownership, funding, profit distribution, tax classification, investor expectations, liability, expansion and, critically, the foreign-owner reporting each route triggers.
Compare the total annual cost rather than the filing fee: formation fee, registered agent, annual report, franchise tax, foreign qualification in your operating state, and that state's own minimum tax.
State registry, then USPTO, then domain and handles. Doing this before formation avoids restructuring later
Every state requires an entity to maintain a registered agent with a physical address in the state for service of process. For a founder in India, this is not optional and it is not the same thing as a business address.
Articles of Organization for an LLC, or Articles or a Certificate of Incorporation for a corporation. Fees and processing vary by state.
The Employer Identification Number is the entity's federal tax identification number, applied for on Form SS-4. The online application generally requires the responsible party to hold an SSN or ITIN, so a founder without one usually applies by fax or mail, or by telephone where the international procedure applies. Expect this to take longer than the formation itself, and start it early because banking depends on it.
A separate process with a separate decision-maker. Formation does not guarantee an account.
Federal, then state income tax, franchise tax, sales tax, payroll and any local requirements, driven by where you operate, not where you formed.
This is the stage first-time founders skip, and the one that produces the penalties. A US entity can have filing obligations in a year with no revenue, no employees, no US customers and no profit.
US Tax Compliance for Indian-Owned Businesses
The US system is not simply “21% corporate tax”.
A C-Corporation pays federal corporate income tax at 21% under IRC §11(b). An LLC’s federal treatment depends on its classification, as set out above. On top of federal tax sit state income tax, franchise taxes, sales tax, payroll taxes and sometimes local taxes — and the result depends on where you are incorporated, where you operate and what you sell.
Three procedural points decide whether a filed return counts as filed:
•The package is Form 5472 attached to a pro forma Form 1120 with the correct notation, sent to the dedicated IRS address by mail or fax. It cannot be e-filed, and a misrouted return is treated for penalty purposes as if it were never filed.
•The due date follows the Form 1120 due date — generally 15 April for a calendar-year filer — and an extension on Form 7004 extends it.
•A separate Form 5472 is required for each qualifying foreign related party, and records supporting the reported transactions must be maintained.
My LLC had no revenue, so there is nothing to file is the single most expensive sentence in this market. The obligation is triggered by a reportable transaction, not by income.
Payments of US-source dividends, interest, royalties and similar income to a non-US person are subject to withholding at 30% under IRC §§871 and 881, collected by the payer under §§1441 and 1442, unless a treaty reduces it.
The India–United States income tax treaty, signed on 12 September 1989, reduces those rates for a qualifying Indian resident. Under Article 10, dividends are capped at 15% where the beneficial owner is a company holding at least 10% of the voting stock of the payer, and 25% in other cases. Under Article 11, interest is generally capped at 15%, and at 10% where paid to a bank or similar financial institution. Under Article 12, royalties and fees for included services are capped at 10% or 15% depending on the category.
The reduced rate is not automatic. The payer applies it only on the strength of valid documentation — in practice a Form W-8BEN-E from the Indian entity, held before payment and the payer, not the recipient, is liable for under-withholding. Payments are reported on Forms 1042 and 1042-S. Get the documentation in place before the first distribution, not at the year-end.
Payments of US-source dividends, interest, royalties and similar income to a non-US person are subject to withholding at 30% under IRC §§871 and 881, collected by the payer under §§1441 and 1442, unless a treaty reduces it.
The India–United States income tax treaty, signed on 12 September 1989, reduces those rates for a qualifying Indian resident. Under Article 10, dividends are capped at 15% where the beneficial owner is a company holding at least 10% of the voting stock of the payer, and 25% in other cases. Under Article 11, interest is generally capped at 15%, and at 10% where paid to a bank or similar financial institution. Under Article 12, royalties and fees for included services are capped at 10% or 15% depending on the category.
The reduced rate is not automatic. The payer applies it only on the strength of valid documentation — in practice a Form W-8BEN-E from the Indian entity, held before payment and the payer, not the recipient, is liable for under-withholding. Payments are reported on Forms 1042 and 1042-S. Get the documentation in place before the first distribution, not at the year-end.
Where the Indian company itself carries on business in the US through a branch rather than a subsidiary, the branch profits tax under IRC §884 applies at 30% on the dividend equivalent amount, reduced under the treaty. This is one of several reasons the branch route is rarely the cheaper one it appears to be.
Sales tax is imposed at state and local level, not through a national VAT. Since the Supreme Court's decision in South Dakota v. Wayfair, Inc. (2018), a state may require an out-of-state seller to collect its sales tax based on economic activity alone, without any physical presence. States set their own thresholds, commonly expressed in annual sales into the state and sometimes transaction counts.
So a company formed in Wyoming or Delaware can have collection obligations in a dozen states it has never visited. This matters most for Amazon sellers, Shopify stores, SaaS companies, subscription businesses, marketplaces, and anyone holding inventory in a US warehouse — because inventory in a third-party fulfillment centre generally creates physical presence in that state on its own.
Beneficial Ownership Reporting: What Changed in August 2026
FinCEN issued an interim final rule on 26 March 2025 exempting domestic reporting companies, and a final rule on 11 August 2026, effective 14 August 2026, making that permanent. Entities formed in the United States, and their beneficial owners, are exempt from BOI reporting. The final rule also relieved foreign reporting companies from reporting US persons as beneficial owners.
What remains is the part that matters to an Indian group. An entity formed under the law of a foreign country that registers to do business in a US state by filing with a secretary of state or similar office is still a reporting company, and must report the beneficial ownership information of its non-US individuals unless an exemption applies.
In plain terms: form a US subsidiary and there is no federal BOI filing. Register your Indian company directly in a US state and there is. That is the reverse of the position most content still describes, and it is a live factor in choosing between a subsidiary and a foreign registration.
Does Starting a US Business Give You a Visa?
No.
Forming or owning a US company gives you no work visa, business visa, green card or permanent residence. Immigration eligibility depends on your circumstances and the visa category. An Indian founder with an existing qualifying business may explore an L-1 intracompany transfer structure; others have entirely different options or none.
Treat business formation and immigration planning as two workstreams with two sets of advice. Providers who bundle them tend to be selling the second on the strength of the first.
India FEMA and ODI Compliance When Starting a US Business
For an Indian resident or Indian company investing in a US entity, the US formation is one side of the transaction. India’s outbound regime is the other, and it is dated and enforceable.
It rests on three instruments issued on 22 August 2022, the Foreign Exchange Management (Overseas Investment) Rules, 2022, the Foreign Exchange Management (Overseas Investment) Regulations, 2022, and the Overseas Investment Directions, 2022 consolidated for authorised dealer banks in RBI Master Direction No. 15/2024-25 dated 24 July 2024. Acquiring 10% or more of the equity of the US entity, or any stake carrying control, is Overseas Direct Investment.
| Obligation | When | Why it bites |
|---|---|---|
Form FC through the AD bank, and allotment of a UIN |
At the financial commitment or the first remittance, whichever is earlier |
The first ODI cannot be made before Form FC is filed and the UIN allotted. Filing after the wire has gone is already late. |
Evidence of investment to the AD bank |
Within six months of remittance, under regulation 9(1) of the OI Regulations, 2022 |
If it is not filed, the funds remitted must be repatriated within the same six months. |
Annual Performance Report for the US entity |
By 31 December each year, on the audited or certified accounts |
Not required only where the holding is under 10% without control and there is no other financial commitment. |
Annual Return on Foreign Liabilities and Assets | By 15 July each year on the RBI FLAIR portal |
A separate obligation from the APR, commonly missed. |
Schedule FA disclosure in the return of income |
Annually, by the investor |
Non-disclosure of a foreign asset engages the Black Money Act — a materially worse exposure than the FEMA breach. |
An Indian entity’s total financial commitment to foreign entities is capped by reference to 400% of its net worth as per the last audited balance sheet. A resident individual investing directly does so within the Liberalised Remittance Scheme limit of USD 250,000 per financial year, which is normally the binding constraint on a founder-owned structure and often the reason to invest through the Indian company instead.
Delayed filings can be regularised on payment of a Late Submission Fee, but no further financial commitment to that entity is permitted until the delay is regularised. An unreported first tranche blocks the second one.
The LLC question India asks that America does not
The overseas investment framework contemplates investment in a foreign entity with limited liability, and the treatment of a US LLC under it is not always as straightforward as the state-law label suggests. Where an Indian resident or company is funding a US LLC rather than a corporation, confirm the position with your AD bank before remitting, not after. This is a documentation question that is easy to resolve in advance and awkward to fix afterwards.
Board resolution, AD bank covering letter, Form FC data sheet and a dated filing tracker running from the resolution through to the second-year APR.
Starting a US Business Through an Indian Company
If your Indian company already has revenue, employees, customers, IP, technology or brand, a US subsidiary can hold American contracts, sales, partnerships, hiring, customer support, business development, fundraising and distribution, while the Indian entity continues product development, engineering and shared services.
Three things must be documented from the start rather than reconstructed later:
• Intercompany agreements — what the Indian company actually provides to the US company, in writing, before the invoices start.
• Transfer pricing — how the Indian company is compensated, tested against IRC §482 on the US side and ss.92–92F of the Income-tax Act, 1961 on the Indian side. Both authorities can adjust the same transaction in opposite directions.
• Intellectual property — which entity owns the software, brand and patents, decided before value accrues to the wrong one.
A US subsidiary that is 25% or more foreign-owned files Form 5472 with its Form 1120 reporting these related-party transactions. The intercompany arrangement you never wrote down is the one you will be reporting to the IRS.
US Business Bank Account for Indian Founders
Formation and banking are separate processes with separate decision-makers. A company can be validly formed and still be declined, because US financial institutions apply their own customer identification and beneficial ownership procedures under the Bank Secrecy Act and its implementing regulations, and are not obliged to explain a refusal.
Expect to be asked for formation documents, the EIN confirmation, passports, ownership details, a business description, source of funds, expected transaction activity, a website, contracts or invoices, and the Indian parent’s documents. Some providers support remote onboarding; others require in-person verification.
Almost every avoidable rejection comes down to the same three things: an ownership chain the bank cannot follow to an individual, a source-of-funds explanation with no documents behind it, and an expected transaction profile that the first three months contradict.
What US banks and fintechs ask for, in the order they ask, with the source-of-funds narrative template and transaction profile that decide most applications.
How Much Does It Cost to Start a Business in the USA?
There is no universal figure, because the state filing fee is the smallest recurring number in the project. Budget in four layers: formation, first-year set-up, annual maintenance, and the cost of operating in states other than your formation state.
Published annual costs worth knowing before you choose: a Delaware corporation typically pays USD 225 a year (USD 175 minimum franchise tax plus the USD 50 annual report fee) by 1 March; a Delaware LLC pays a flat USD 300 by 1 June; a Wyoming entity’s annual report license tax starts at USD 60; and California imposes a minimum franchise tax of USD 800 on entities doing business there regardless of where they were formed.
A provider quoting a low formation price may not include the registered agent, EIN support, annual report, franchise tax, foreign qualification, tax registration, bookkeeping, the Form 5472 package, or any India-side work. The cheapest formation becomes the most expensive structure when the annual filings were never priced.
Four separate blocks — formation, first-year set-up, annual maintenance and multi-state cost — with published state figures pre-filled and a column telling you who to ask for each quote.
Ongoing US Compliance
A US entity has obligations in years when it earns nothing. The core annual cycle for an Indian-owned company looks like this:
| Obligation | When | Basis |
|---|---|---|
Form 5472 with pro forma Form 1120 (foreign-owned disregarded entity) |
With the Form 1120 due date, generally 15 April; extendable on Form 7004 |
IRC §6038A; Treas. Reg. §1.6038A-1(c) |
Form 1120 with Form 5472 (25% foreign-owned corporation) |
Generally 15 April for a calendar-year corporation; extendable |
IRC §6038A; §11(b) |
Form 1065 with K-1s and K-2/K-3 (multi-member LLC) |
Generally 15 March; extendable |
Partnership filing requirements |
Section 1446 withholding on effectively connected income allocable to foreign partners |
Quarterly instalments plus annual filing |
IRC §1446 |
Forms 1042 and 1042-S for withholdable payments to India |
Generally 15 March |
IRC §§1441, 1442 |
State annual report and franchise tax |
Delaware: 1 March for corporations, 1 June for LLCs. Other states vary |
State law |
Foreign qualification renewals and registered agent |
Per State |
State law |
Sales tax returns where registered |
Monthly, quarterly or annually per state |
State law |
BOI report — only if the Indian entity itself is registered in a US state |
Per FinCEN deadlines |
31 CFR 1010.380 as amended by the final rule effective 14 August 2026 |
Annual Performance Report to the AD bank |
By 31 December |
OI Regulations and Directions, 2022 |
FLA return |
By 15 July |
RBI reporting requirements |
Every recurring obligation on both sides, with the legal basis, the penalty for default and the due dates computed from your own tax year end and state of formation.
Common Mistakes Indian Founders Make
01
“Delaware is always the best.” Excellent for a venture-backed corporation; often the wrong shape and the wrong annual cost for an owner-operated service business.
02
Wyoming has no taxes.” It has no state income tax. Your federal obligations, your operating state's obligations and your sales tax obligations are unaffected.
03
An LLC means no tax.” An LLC is a state-law entity whose federal treatment depends on classification and election.
04
No revenue means no filing.” The Form 5472 obligation is triggered by a reportable transaction — including the transfer that funded the company.
05
“A US company means a US visa.” It does not.
06
"I can form in one state and ignore where I operate.” Foreign qualification, state income tax and the courthouse-door consequence say otherwise“.
07
“P.L. 86-272 protects me.” Not if you sell services or software.
08
"A business search is a trademark search.” Different registers, different rights.
09
“BOI does not apply to me because I am foreign.” It is the other way round after August 2026: US-formed entities are exempt and foreign entities registered in a state are not.
10
“The US side is all that matters.” Form FC, the six-month evidence filing and the APR are not optional.
Frequently Asked Questions
Yes. No federal law restricts foreign ownership of an ordinary LLC or corporation, and the states Indian founders normally impose no citizenship or residency requirement on owners, directors or officers.
Generally yes. Since tax years beginning on or after 1 January 2017, a foreign-owned US disregarded entity is treated as a corporation for the reporting requirements of IRC §6038A and must file Form 5472 with a pro forma Form 1120 where it has a reportable transaction with a related party. The penalty under §6038A(d) is USD 25,000 per form per year, with a further USD 25,000 for every 30 days after IRS notice.
Probably. The trigger is a reportable transaction with a related party, not income. The capital contribution that funded the LLC is itself reportable, and there is no de minimis threshold.
No. For a foreign-owned disregarded entity the package must be mailed or faxed to a dedicated IRS address with the correct notation. A misrouted return is treated for penalty purposes as if it had never been filed.
No. FinCEN's final rule of 11 August 2026, effective 14 August 2026, permanently exempts entities formed in the United States and their beneficial owners. Entities formed under foreign law that register to do business in a US state remain reporting companies and must report their non-US beneficial owners unless exempt.
An LLC suits many closely held operating businesses; a C-Corp suits startups raising institutional capital, where a Delaware C-Corp is the market standard. Decide on the funding plan and the filing burden together, not on the formation fee.
There is no universal answer. Delaware for investor-facing corporations, Wyoming for low-cost owner-operated entities, and your actual operating state when that is where the business really is. Compare total annual cost including foreign qualification, not the filing fee.
No. If you do business in California you generally must register there and pay its minimum franchise tax of USD 800 a year, on top of your formation state's costs.
It prevents a state from imposing a net income tax where the only in-state activity is soliciting orders for tangible personal property shipped from outside the state. It does not protect services or software, so for most Indian-owned US businesses it offers no shelter.
Possibly, in states where you have nexus. Since South Dakota v. Wayfair (2018) a state can require collection based on economic activity alone. Inventory held in a fulfilment centre generally creates physical presence in that state.
US-source dividends, interest and royalties paid to a non-US person are subject to 30% withholding under IRC §§871 and 881 unless reduced by treaty. Under the India–US treaty, dividends are capped at 15% where an Indian company holds at least 10% of the voting stock, and 25% otherwise. The reduced rate depends on valid documentation held by the payer before payment.
Most US entities need an EIN. The online application generally requires the responsible party to have an SSN or ITIN, so founders without one usually apply by fax or mail. Start early — banking depends on it.
You need a registered agent with a physical address in your formation state. That is not the same as an operating office or a business mailing address, and whether you need those depends on your business, bank and licensing.
Some institutions support remote onboarding and others require in-person verification. Approval depends on the provider's own KYC and risk policies, and formation does not guarantee it.
No. Formation confers no work authorisation or immigration status.
Yes, subject to US corporate requirements and India's overseas investment framework. The parent-subsidiary relationship needs intercompany agreements and transfer pricing support under IRC §482 and ss.92–92F of the Income-tax Act, 1961.
Yes, where it is Overseas Direct Investment. Form FC must be filed and a UIN allotted before the first remittance, evidence of investment must reach the AD bank within six months under regulation 9(1) of the OI Regulations, 2022, and an Annual Performance Report is due by 31 December each year.
Ready to Start Your Business in the USA?
Starting a business in America from India is straightforward when the structure is designed properly at the beginning, and expensive when it is not. Do not start with “which state is cheapest?”
Start with: what am I building, who owns it, where will I operate, how will the entity be classified for tax, what will it have to file in a year with no revenue, and how will money move between India and the USA?
Tell us your business activity, whether you already have an Indian company, your target US customers, your preferred state if any, whether you need banking, whether you will fund the company from India, and whether you plan to relocate. We will tell you the appropriate next step.