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India's startup ecosystem has grown to 32,000–35,000 tech startups as of 2024, and a growing number of those founders are looking beyond domestic markets. Setting up a US entity has become a strategic move — for accessing American customers, attracting institutional investors, and building international credibility.
The good news: US law places no restrictions on foreign ownership of American companies. An Indian national living in India can legally form and operate a US business without ever boarding a flight to New York.
The complexity lies elsewhere — in choosing the right structure, understanding visa boundaries, moving money across borders legally, and keeping up with US compliance obligations that don't pause just because the company has no revenue yet.
This guide walks through every stage of that process, specifically for Indian founders.
Yes — straightforwardly and legally. Delaware's General Corporation Law explicitly permits incorporation by any person "without regard to such person's or entity's residence, domicile or state of incorporation." The same principle applies to LLCs. Foreign ownership of US entities is unrestricted.
This distinction is the one most Indian founders get wrong:
Many Indian founders run their US entities entirely from India. They handle sales, operations, and strategy without ever needing to relocate. The visa question only becomes relevant when a founder wants to physically work on US soil.
To get the company operational, every Indian founder needs:
The bank account is the one step that requires the most effort for non-residents — everything else clears without a US visa.
Two structures are available to Indian founders: the LLC and the C-Corporation. S-Corps are off the table entirely — the IRS explicitly bars nonresident alien shareholders from S-Corp ownership.
An LLC works well when:
Wyoming is the popular LLC state for Indian founders — a $100 filing fee, $60 annual license tax (or 0.02% of Wyoming assets, whichever is greater), and minimal ongoing requirements.
One tax note: a foreign-owned single-member LLC is treated as a disregarded entity for US tax purposes, but it carries IRS reporting obligations covered in the compliance section below.
A C-Corp is the right choice when:
Delaware dominates here — 66.7% of Fortune 500 companies and 81.4% of US-based IPOs in 2024 chose Delaware as their corporate home. The minimum filing fee is $109, with an annual franchise tax starting at $175.
C-Corps pay a flat 21% federal corporate tax rate on taxable income. The US-India Double Taxation Avoidance Agreement (DTAA) provides some relief through its Article 7 provisions, which address business profits and permanent establishment rules. The actual tax outcome for any founder depends on their individual circumstances and requires a CPA or tax advisor review.
FactorLLC (Wyoming)C-Corp (Delaware)Filing fee$100$109+Annual cost$60+$175+ franchise taxVC fundingNot preferredRequired by most investorsTax treatmentPass-through21% flat corporate rateCompliance loadLowModerate–High
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One detail most generic guides overlook: India is not an E-2 Treaty Investor country. The E-2 visa — frequently cited as the go-to path for entrepreneur-immigrants — is simply not available to Indian nationals, which makes it irrelevant for most founders reading this.
If you want to physically work in the US for your business, these are the realistic options:
Best for founders who already run an Indian company and want to set up a US subsidiary.
For founders with demonstrable national or international recognition in their field.
A permanent residency pathway, not a temporary visa.
Most Indian founders don't start with a visa at all. They incorporate the US entity, operate it remotely from India, and revisit relocation only once the business justifies it. This is a legitimate, widely-used path:
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For visa-specific guidance, consult a qualified US immigration attorney. Visa eligibility depends on individual circumstances.
Most steps in this process are completed entirely online. Two areas require extra attention: the EIN application for non-residents and cross-border fund transfer compliance under FEMA.
Make this decision before filing anything. Switching structures after incorporation involves legal costs and paperwork. Use the LLC vs. C-Corp comparison above as your starting framework, then confirm with a tax advisor.
Make this decision before filing anything — switching structures after incorporation involves legal costs and paperwork. Use the LLC vs. C-Corp comparison above as your starting framework, then confirm with a tax advisor.
Key factors that shape this decision:
Every US state requires a registered agent — a US-based person or service that receives legal documents on behalf of your company. For Indian founders without a US address, this is non-negotiable.
Registered agent services typically cost $50–$436 per year, depending on the provider:
Both can be filed online or through a formation service. Filing fees: $100 in Wyoming, $109 minimum in Delaware.
You don't always need to file an Operating Agreement (LLC) or Bylaws and shareholder resolutions (C-Corp), but banks and investors will ask for them. Draft these before you open a bank account.
An EIN is required for banking, hiring, and tax filing. It's free from the IRS — but non-residents face a specific obstacle.
The problem: Indian founders without a US SSN or ITIN cannot use the IRS online EIN application. That portal requires a US-based responsible party with a valid US taxpayer identification number.
The solution:
Phone is fastest — you typically receive the EIN on the same call.
Traditional banks like Chase generally require in-person branch visits for business account opening. That's a real barrier for founders based in India.
The practical alternatives:
Some founders make a short US trip specifically to open a bank account at a traditional bank, which also allows them to meet potential partners or customers in the process.
This is where many Indian founders make a costly mistake. Sending money from India to fund your US company isn't as simple as a wire transfer.
Under India's Foreign Exchange Management Act (FEMA), Indian residents can remit up to USD 250,000 per financial year under the Liberalized Remittance Scheme (LRS).
Permitted uses include opening foreign currency accounts, purchasing property abroad, and making investments in overseas entities.
The compliance process:
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Amounts above the USD 250,000 limit, or transfers that don't fall within permitted categories, require RBI approval. Sending funds informally — without proper documentation — creates tax and compliance exposure in both India and the US.
Forming the company is the easy part. Keeping it compliant is where Indian founders often get surprised.
Even if your US company has zero revenue, filing obligations may still apply:
The penalty for failing to file Form 5472: $25,000. An additional $25,000 applies for each 30-day period after 90 days from IRS notice. This is one of the most common and expensive surprises for first-time foreign founders.
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RequirementDelaware C-CorpWyoming LLCAnnual report deadlineMarch 1Anniversary monthAnnual fee$50 report + $175+ franchise tax$60 license taxLate penalty$200 + 1.5% monthly interestAdministrative dissolution
Non-compliance doesn't just mean fines — states can administratively dissolve your company without prior warning.
Between Form 5472 penalties, state dissolution risks, and Indian tax reporting obligations, the compliance load across two jurisdictions adds up fast. VJM Global, with offices in New York and Noida, works with Indian founders on US federal filings, state annual reports, IRS documentation, and FEMA advisory — so nothing falls through the cracks on either side of the equation.
Starting a US business from India is entirely achievable, and the registration process itself is straightforward. Most of the real work happens in the decisions you make before filing: which structure, which state, how you'll fund the company, and whether you eventually plan to relocate.
Most compliance failures trace back to the same mistakes: moving money informally, missing Form 5472, or assuming an inactive company has no filing obligations. These aren't obscure rules — they're the issues that turn an otherwise clean setup into a costly problem.
Before you file, make sure you've thought through:
Getting this right from the start is what keeps a US entity an asset rather than a liability. If you're navigating the cross-border tax and compliance side — especially Form 5472, FEMA considerations, or structuring for eventual relocation — working with advisors experienced in both Indian and US regulations is worth the investment.
Yes. Foreign nationals, including Indian citizens, can own 100% of a US LLC or C-Corp with no residency or citizenship requirement. Delaware law allows anyone to incorporate regardless of where they live or hold citizenship.
The entire formation process — filing, registered agent appointment, and EIN application — can be completed remotely from India. Opening a US business bank account may require a brief visit at traditional banks. Fintech options like Mercury and Relay, however, accept non-resident founders without in-person requirements.
It depends on your goals. A Delaware C-Corp is the standard for startups seeking VC funding or accelerator participation. A Wyoming LLC works better for service businesses, consultants, or founders who want lower compliance costs and aren't planning to raise institutional capital.
No visa is needed to form a US company or manage it from India. A valid US work visa is only required if the founder intends to physically work inside the US. The E-2 investor visa is also off the table for Indian nationals — India does not have an E-2 treaty with the US.
Transfers must go through an Authorized Dealer bank under India's LRS (FEMA), using Form A2 and your PAN. The annual limit is USD 250,000 per financial year. Anything above this threshold or sent through informal channels carries serious legal and tax consequences in both countries.
