How to setup a company in US from India?

Starting a company in the United States as an Indian entrepreneur opens the door to global opportunities and a vast consumer base. The process begins with selecting the right business structure — such as an LLC or Corporation based on your operational goals and liability preferences. You’ll then choose a state for incorporation, like Delaware for its business-friendly laws or a state where you plan to operate.

Key steps include filing incorporation documents, obtaining an EIN for tax purposes, hiring a registered agent, and opening a U.S. business bank account. Compliance with federal and state tax regulations, as well as acquiring any necessary licenses or permits, is crucial for smooth operations.

With careful planning and expert guidance, establishing your U.S. business from India can be a streamlined process, providing a solid foundation for global expansion.

1. Choose the Right Business Structure

Decide on the type of business entity that aligns with your goals and liabilities. The most common types in the U.S. are:

Limited Liability Company (LLC): A flexible structure offering liability protection and pass-through taxation.
Corporation (C-Corp or S-Corp): Preferred by businesses planning to raise capital or go public.
Sole Proprietorship: Suitable for small, one-person businesses (not a separate legal entity).
Partnership: For businesses owned by two or more individuals.

2. Choose the State of Incorporation

Select a state where you want to register your company. Popular choices include:

Delaware: Known for its business-friendly laws and minimal tax requirements for non-residents.
Nevada: Offers no state income tax and privacy for business owners.
Your Target State: If you plan to operate in a specific region, consider incorporating there.

3. Name Your Business

Choose a unique business name that complies with the naming rules of the state. Conduct a name availability search through the Secretary of State’s website in your chosen state.

4. Hire a Registered Agent

A registered agent is required to handle legal and tax documents on behalf of your business.

Who Can Be a Registered Agent?: An individual or service with a physical address in the state of incorporation.

5. File Incorporation Documents

Submit the required documents to the state’s Secretary of State office.

For an LLC: File Articles of Organization.
For a Corporation: File Articles of Incorporation.

You’ll need to pay a filing fee, which varies by state.

6. Obtain an Employer Identification Number (EIN)

The EIN is a unique identification number issued by the IRS for tax purposes.

Apply online through the IRS website.
Non-residents may need to complete and fax Form SS-4 to obtain an EIN.

7. Open a U.S. Business Bank Account

To manage your finances and conduct transactions, open a business bank account in the U.S.

Requirements: EIN, incorporation documents, and possibly a visit to the U.S.
Some banks offer international services allowing you to open an account without being physically present.

8. Comply with Tax Obligations

Understand and comply with federal, state, and local tax requirements.

Corporations may need to pay corporate income tax.
LLCs often have pass-through taxation, where profits are taxed on individual members’ returns.

9. Obtain Necessary Licenses and Permits

Depending on your industry and location, you may need additional licenses or permits.

Check federal, state, and local requirements.

10. Build and Maintain Compliance

After incorporation, adhere to ongoing compliance requirements:

File annual reports.
Maintain proper business records.
Pay state franchise taxes, if applicable.

Key Considerations for Indian Entrepreneurs

Visa and Travel: U.S. law does not require you to have a visa to register a business, but travel may be needed for banking and operational purposes.
Tax Treaties: Understand the tax implications between India and the U.S., as per the Double Taxation Avoidance Agreement (DTAA).
Expert Help: Consult with U.S.-based attorneys, accountants, or business consultants to streamline the process.

With proper planning and compliance, setting up a company in the U.S. from India can open doors to new markets and global opportunities. Would you like more details on any specific step?

For further details, taxpayers can refer to the official notification issued by the CBDT or consult with tax advisors @ hello@karnipuna.com