Forming a US LLC from India

The question to settle first, before you form anything

India regulates outward remittance by residents. The relevant question for you is not whether you may own a foreign company — you may — but under which route your particular remittance falls, and what reporting follows.

Put these to a chartered accountant who handles FEMA matters, before you form:

• Under which route does my investment in, or funding of, a US LLC fall, given what the company will actually do?
• What are the current limits and reporting obligations on that route for someone in my position?
• Does it change if I am simply receiving service income into a US company I own, rather than remitting capital out to it?

That last distinction is the one that catches people, and it is genuinely fact-specific. We will not guess at it, and we would be suspicious of a formation provider who did.

The US side, which is the straightforward part

• No residency or citizenship requirement. No visit, no SSN, no US partner.
• An EIN with no SSN, by fax or post rather than the instant online route.
• Service income delivered remotely from India, with no US office, staff or dependent agent, is generally not US-source and generally not subject to US federal income tax.
• An annual federal filing regardless — the pro-forma Form 1120 with Form 5472 for a single foreign owner, even at zero revenue.

India’s treaty with the US can reduce withholding on particular categories of US-source income, and matters most for royalties and for anyone taking dividends from a US corporation. For a services business with no US presence it usually never comes up.

What an Indian founder actually gains

Different from the Pakistani case in one respect: Indian founders more often already have working payment rails. What the US entity adds is usually one of:

• Contracting as a US entity, which removes a procurement objection at large US customers.
• A cleaner path to US investment later, if the plan is to raise — in which case read LLC vs C-corp first, because an LLC is the wrong shape for that and converting costs money.
• Holding US-facing IP or contracts in a US entity because a customer requires it.

If none of those apply and your existing arrangements work, a US LLC may be a cost without a benefit. We would rather say so than sell you one.

What is the same wherever you live

None of this changes with your passport. A US LLC owned by one non-resident files a pro-forma Form 1120 with Form 5472 attached every year, at a penalty starting from $25,000, even in a year it earned nothing. A multi-member LLC files Form 1065 instead. Every reporting company files a BOI report with FinCEN. And an EIN is available to you with no SSN, by fax or post rather than the instant online application.