Why Indian founders form a US LLC or UK Ltd
Indian founders form a US or UK company to sell to foreign customers in their currency, use payment tools built for those markets, and, for startups, to raise money from foreign investors. Stripe lists India as "Preview" on its global availability page, and its India page asks new businesses to request an invite. For a SaaS founder who wants self-serve Stripe checkout, a US or UK company that applies to Stripe in that country is the common route.
Unlike founders in some other countries, you are not locked out of most US fintech. Mercury's prohibited countries list does not include India. The larger issue for you is at home: Indian foreign exchange law treats your investment in a foreign company as overseas direct investment, and that brings rules most competitor pages skip.
FEMA and the RBI overseas investment rules
If you are resident in India and put money into a foreign company, you are making an overseas investment under the Foreign Exchange Management (Overseas Investment) Regulations, 2022, read with the Overseas Investment Rules, 2022 and the Overseas Investment Directions, 2022. What follows summarizes RBI's published texts. It is not legal advice, and a chartered accountant or FEMA lawyer should review your plan before you remit money.
What the rules cover for a resident individual
- Schedule III of the Rules: the Directions say a resident individual may make overseas investment in accordance with Schedule III of the Overseas Investment Rules, which is aimed at investment in an operating foreign entity.
- Bona fide business activity: the Directions say overseas investment may be made in a foreign entity engaged in a bona fide business activity. A shell company with no real business does not fit.
- LRS limit: the Directions say remittances by individuals for overseas investment count toward the Liberalised Remittance Scheme limit, which RBI's LRS FAQ puts at USD 250,000 per financial year.
- Control and later subsidiaries: the Directions restrict a resident individual who invested without control from acquiring control once the foreign entity sets up a subsidiary or step-down subsidiary. Ask your adviser if you plan a holding structure.
- Financial services: resident individuals face restrictions on overseas investment in entities in some financial services activities.
Reporting through your AD bank
You route the investment through one designated authorized dealer (AD) bank. The Directions say Form FC is submitted to the AD bank to obtain a Unique Identification Number on or before the initial investment. Where two or more Indian residents set up the same foreign entity, all transactions go through one designated AD bank. Each year an Annual Performance Report is due by 31 December for each foreign entity, and a late submission fee applies to late filings for up to three years from the due date.
In practice this means talking to your bank before you pay the state fee, not after. The formation fee and your first capital contribution are both outward remittances for the new entity. The same rules apply whether the foreign company is a US LLC, a Delaware C corp or a UK Ltd.
Stripe Atlas publishes a guide on incorporating with Indian resident founders in compliance with India's ODI rules. It confirms the issue is standard, but your own AD bank's documentation list is what counts.
US LLC or Delaware C corp?
If you plan to raise from venture investors, a Delaware C corporation is usually the expected structure; if you want a small, low-cost trading company, an LLC is usually enough. A C corporation pays the 21% federal corporate rate and files Form 1120 by the 15th day of the fourth month after its year-end. A single-member LLC owned by a non-resident is disregarded for US income tax and files an information return instead. We cover the trade-offs, including how investors view each, on LLC vs C corp, and our Delaware C corp formation page covers the corporate route.
The US LLC route from India
Wyoming, New Mexico or Delaware
Wyoming is the most searched state among Indian founders for good reason: it charges $100 to file Articles of Organization ($102.40 online with the 2.4% card fee) and an annual report of at least $60, due on the first day of your anniversary month. New Mexico charges $50 and its LLC Act lists no annual report fee. Delaware charges $110 to form and an annual LLC tax of $400 from the 2026 tax year. Compare them on Wyoming vs Delaware vs New Mexico LLC or see the Wyoming LLC page.
EIN without an SSN
You cannot use the IRS online EIN form from India because it needs an SSN or ITIN and a US principal place of business. Non-residents apply by fax (304-707-9471 from outside the US), by mail, or on the international line 267-941-1099, per the Form SS-4 instructions. The EIN is free from the IRS. Our EIN application service handles the SS-4.
Do you need an ITIN?
Not to form an LLC or get an EIN. An ITIN is for people with a US federal tax purpose who cannot get an SSN, such as filing a US return. An application needs original or certified documents mailed to the IRS, an IRS Taxpayer Assistance Center appointment, or authentication by a Certifying Acceptance Agent (CAA). We arrange the document route that fits your case; see ITIN application.
Form 5472 every year
A single-member LLC wholly owned by a foreign person files Form 5472 with a pro forma Form 1120 each year, even with no income, by 15 April for a calendar year (15 October with Form 7004). It is filed by fax or mail, not e-filed, and the penalty for failure is $25,000 per form. Your capital contribution sent under the ODI rules is itself a reportable transaction. An LLC with two Indian co-founders is not a disregarded entity, so it has different US filings; ask before you choose that structure. See the Form 5472 guide and our Form 5472 filing service.
US LLCs do not file BOI reports, whoever owns them; see BOI report 2026.
The UK Ltd route from India
An Indian resident can be the sole director and shareholder of a UK private limited company, because directors do not need to live in the UK. The company needs a UK registered office and at least one director who is a natural person. Online incorporation costs £100 at Companies House and the yearly confirmation statement £50.
Before incorporation, each director verifies their identity through GOV.UK One Login, which accepts a biometric passport from any country. The check is free and you do it yourself; we do not verify on your behalf. Details are in our identity verification guide.
For banking, Revolut Business lists India among eligible countries of residence for UK companies, and Tide accepts directors with a home address overseas but asks for a UK mobile number and a UK app store device. Wise says Indian residents can hold money only when traveling overseas. None of these providers guarantees approval.
After formation, the company files annual accounts and a Company Tax Return within 12 months of each period end, and the ODI rules above apply to the UK company as they would to a US one. See UK company formation for non-residents.
Indian tax residence and reporting foreign assets
If you are resident in India for tax, owning a foreign company changes how you file your return. The Income Tax Department's e-filing help says ITR-1 cannot be used by a person who has any asset (including financial interest in any entity) located outside India, signing authority in an account outside India, or income from a source outside India. So once you own a US LLC or UK Ltd, or sign on its bank account, you need a different ITR form that captures foreign assets and income.
Whether you are resident depends mainly on your days in India, and the exact tests, the schedule to use and the penalties for non-disclosure should be confirmed with a chartered accountant. The department's portal now carries the Income-tax Act, 2025 and Income-tax Rules, 2026 alongside the older Act, so section numbers in older articles may not match current law. The US side does not remove Indian tax: profits of a disregarded LLC may be taxable in India in your hands, which is a question for your CA.
Common mistakes Indian founders make
- Remitting the formation fee or capital before the AD bank has issued a UIN on Form FC.
- Forming a company with no real business just to hold money abroad, which does not meet the bona fide business test.
- Missing the Annual Performance Report due each 31 December.
- Forming an LLC when the plan is to raise venture money, then converting later.
- Skipping Form 5472 in a year with no sales. The $25,000 penalty still applies.
- Filing ITR-1 after acquiring a foreign company or bank account.
Official costs at a glance
Government fees only; our service fees are on the pricing page.
| Item | Official fee | Source |
|---|---|---|
| Wyoming LLC formation | $100 ($102.40 online) | Wyoming Secretary of State |
| Wyoming annual report | $60 minimum | Wyoming Secretary of State |
| New Mexico LLC formation | $50 | NMSA 53-19-63 |
| Delaware LLC formation | $110 | Delaware Division of Corporations |
| Delaware annual LLC tax | $400 (from the 2026 tax year) | Delaware Division of Corporations |
| EIN | $0 | IRS |
| Form 5472 filing | $0 (penalty $25,000 if missed) | IRS |
| UK Ltd incorporation (online) | £100 | Companies House |
| Confirmation statement (online) | £50 a year | Companies House |
| Identity verification (GOV.UK One Login) | £0 | GOV.UK |
Your AD bank may charge its own fees for ODI reporting. Use the compliance deadline calendar to track 5472, annual report and APR dates, and read how it works and our security page before you upload documents.
Sources
- Stripe: Global availability
- Stripe: India
- Stripe Docs: Stripe Atlas
- Mercury: Prohibited countries
- Reserve Bank of India: Foreign Exchange Management (Overseas Investment) Regulations, 2022
- Reserve Bank of India: Master Direction, Foreign Exchange Management (Overseas Investment) Directions, 2022
- Reserve Bank of India: Liberalised Remittance Scheme FAQs
- IRS: Instructions for Form 1120
- Wyoming Secretary of State: Business fees
- New Mexico Statutes: Section 53-19-63, fees
- Delaware Division of Corporations: Fee schedule (August 2026)
- Delaware Division of Corporations: LLC, LP and GP tax instructions
- IRS: Get an employer identification number
- IRS: Instructions for Form SS-4
- IRS: Instructions for Form 5472
- GOV.UK: Appoint directors and a company secretary
- GOV.UK: Companies House fees
- GOV.UK: Verify your identity for Companies House
- GOV.UK: Company Tax Returns
- Revolut Business: Eligible countries of residence
- Tide: Can I apply from abroad?
- Wise Help: Where do I need to live to hold money with Wise?
- Income Tax Department (India): ITR-1 help
Fees, deadlines and rules on this page were last checked on 27 September 2026.