Can Indians Own a Company in the USA? What Most Guides Get Wrong
Most articles answer one question, then stop. Yes, an Indian citizen can own a US LLC. Done. But owning a company and running it compliantly are two different things.
The legal foundation is solid. According to IRS Publication 1635 (2024), Indian citizens and non-resident Indians can legally own a US-based company. No US citizenship required. No residency required.
The legal foundation is solid. According to IRS Publication 1635 (2024), Indian citizens and non-resident Indians can legally own a US LLC. There is no citizenship requirement, no minimum investment, and no mandatory US presence.
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This guide does. Whether you're an Indian citizen in Mumbai or an NRI in Dubai, you'll learn the complete compliant path: legal formation, tax filings, banking access, and real examples of forms and fees.
Key Takeaways
An ITIN (Form W-7) is required before you can open a US bank account — plan for 9-12 weeks via an IRS-certified acceptance agent.
How to Form a US LLC as an Indian Citizen: Step-by-Step
Forming a US LLC requires no US presence, no citizenship, and no lawyer — but the order of steps matters. Skipping the ITIN before the EIN, or opening a bank account before getting an EIN, will cost you weeks. Here is the sequence most non-residents follow successfully.
Step 1 — Choose Your State of Formation
Most Indian citizens choose Delaware or Wyoming. Delaware charges $90 to file and a $50 annual franchise tax, but its business court system is well-developed. Wyoming charges $100 to file and has no franchise tax — meaning your annual cost can be as low as $50 if you handle compliance yourself.
Neither state imposes a state income tax. Wyoming is cheaper and simpler for a first LLC. Delaware is preferred if you plan to raise investor equity later. Choose before you file anything — your state determines which forms and fees apply.
Step 2 — Apply for Your ITIN (Form W-7)
Before you can do almost anything else — open a US bank account, file a tax return, receive distributions — you need an ITIN (Individual Taxpayer Identification Number), assigned via Form W-7.
Standard processing takes 9–12 weeks from the date your application reaches the IRS. Rejections are common and add another 4–8 weeks. Common reasons for rejection: missing certified translations, unsigned forms, or applications sent directly to the IRS without an acceptance agent.
Before you can do almost anything else — open a bank account, file a tax return, receive distributions — you need an ITIN (Individual Taxpayer Identification Number). Apply using Form W-7 through an IRS-certified acceptance agent.
Step 3 — Get Your EIN (Form SS-4)
An EIN (Employer Identification Number) is separate from your ITIN. It identifies your LLC as a tax entity. Foreign owners can obtain an EIN directly through IRS.gov using Form SS-4 — no SSN required. You can apply online (preferred) or by fax. Online applications are typically processed immediately.
You need the EIN before a US bank will open an account in your LLC's name. Without an EIN, most banks will decline your application regardless of how complete your other documents are.
Step 4 — Open a US Bank Account
This is where most non-residents hit a wall. Chase, Bank of America, and Wells Fargo require in-person account opening — nearly impossible if you are in India. Neo-banks and fintechs have solved this gap for LLC owners.
Mercury, Relay, and BlueVine accept non-resident Indian owners. Required documents typically include: your ITIN, EIN, passport, and a US business address (many formation services provide a registered agent address that works for this purpose). Processing time is usually 3-7 business days once your documents are submitted.
Step 5 — FEMA Compliance for Indian Residents
If you are an Indian tax resident wiring money to your newly formed US LLC — for example, contributing initial capital — you are subject to RBI's Liberalized Remittance Scheme (LRS).
Every wire transfer to your US LLC requires LRS documentation. Your bank in India will need to report the transaction under LRS guidelines. Failing to document means your RBI compliance is incomplete — even if the transfer cleared.
Once these five steps are complete, your US LLC exists legally, has a tax ID, a functioning bank account, and a compliant funding path from India. The next challenge is ongoing compliance: annual reports, federal tax filings, and state renewals.
Formation and First-Year Costs
The legal right to own a US LLC is settled. The cost to run one compliantly is where most people get surprised. Here is what you actually pay — and where the numbers come from.
30% Withholding on Foreign-Owned US LLCs: The Topic Most Guides Skip
This is the part that catches Indian founders off guard. When your US LLC earns income and distributes profits to you as a foreign owner, the IRS treats those distributions as FDAP income (Fixed, Determinable, Annual, Periodical) — and applies a flat 30% withholding tax under IRS Publication 519.
This applies to consulting fees, royalties, dividends, and rent — collectively called FDAP income under IRS Publication 519. If your LLC earns US-source income, the payer withholds 30% before funds reach you.
Worked example: Your Wyoming LLC earns $60,000 in consulting revenue. You take a $40,000 distribution. The IRS withholds 30% of the distribution — that's $12,000 sent directly to the IRS. You receive $28,000. The $40,000 represents a US-source FDAP payment, so no treaty applies to reduce the rate. If the $40,000 had instead been classified as Effectively Connected Income (ECI) — possible if you perform services directly in the US — the withholding rate could drop to 0–37% depending on your filing status. But for most Indian non-resident founders operating remotely, the IRS treats consulting income as FDAP, and the default 30% stands.
Bottom line on withholding: Budget for 30% to be withheld on every US-source distribution. If your income is effectively connected with a US trade or business, you may file a Form 1040-NR to claim a refund or lower rate — but only after the withholding has already been taken. The 30% withholding foreign owner US LLC rule applies unless you have an applicable tax treaty, and India has no bilateral tax treaty with the US that covers FDAP income. India does not appear on the current IRS treaty countries list for this purpose.
C-Corporation Election: An Alternative for High-Earning Indian Founders
If your US LLC earns over $100,000 annually and most of that income is service or consulting revenue, the 30% FDAP withholding stings. Here is the option most guides skip: elect S-corp or C-corp status.
Under Treasury Regulations §301.7701-3, a single-member LLC can elect to be taxed as a corporation by filing Form 8832. From there, an eligible entity can elect S-corp status. An S-corp lets you pay yourself a reasonable salary (subject to FICA/Medicare withholding) and take the remainder as a distribution — which is not subject to the 30% FDAP withholding.
There is no India-US tax treaty to reduce this rate. India is not on the IRS treaty countries list for FDAP income purposes. The standard 30% rate applies in full. Some foreign owners structure as partnerships or corporations to manage this — but each structure carries its own filing complexity and cost. Consult a US international tax attorney before choosing a structure solely to reduce withholding.
Annual Compliance Costs for Indian-Owned US LLCs
Once your LLC is formed and operating, the IRS requires annual filings regardless of whether your LLC made money. A single-member LLC owned by a foreign non-resident files Form 5471 if treated as a corporation, or Form 8865 if treated as a partnership. Most Indian-owned single-member LLCs file as disregarded entities — which means the owner files Form 5470 and Form 8840 annually.
State compliance adds cost. Wyoming requires a $10 annual report. Delaware requires a $50 annual franchise tax. Other states vary. If you use a registered agent and a compliance service, budget $150-$300 per year for state filings alone. Full-service accountants for a non-resident LLC typically charge $800-$1,500 annually for US federal filings.
Your total first-year costs — formation fees ($100-$140), registered agent ($100-$200), ITIN application ($100-$300 via acceptance agent), EIN (free), and compliance services ($0-$800) — typically range from $300 to $1,500. After year one, annual costs range from $150 to $1,200 depending on your state and whether you hire an accountant.
Can Indians own a company in the USA? Yes — fully, legally, and without US citizenship or residency. The process is straightforward if you follow the steps in order: form in Wyoming or Delaware, apply for your ITIN via Form W-7, get your EIN, open a US bank account, and fund through LRS-compliant channels. The compliance pieces — the ITIN timeline, FEMA documentation, and the 30% withholding reality — deserve real attention. Most people who run into problems skipped the ITIN or ignored LRS requirements. Don't be that person. The first step is choosing your state; the second is starting your ITIN application today.
Frequently Asked Questions
Formation fees are straightforward. Wyoming charges $100 to file your Articles of Organization. Delaware charges $90 to file plus a $50 annual franchise tax [Source: Wyoming SOS; Delaware Division of Corporations]. Wyoming has no franchise tax after formation, so your second year costs less.
A registered agent is required in both states. These services charge $50–$200 per year depending on the provider. Some formation services bundle it for year one at a discount.
An EIN (Form SS-4) is free from the IRS — apply online at IRS.gov and receive it immediately. An ITIN (Form W-7) routed through an IRS-certified acceptance agent typically costs $100–$200 in agent fees [Source: IRS Form W-7 Instructions]. Factor in 9-12 weeks of processing time.
Add these together and your first year costs between $200 and $500 depending on your state and agent choice. That range is manageable — the compliance costs that follow are where you need to plan ahead.
Annual Compliance Costs
Every US LLC must file an annual report with its formation state. Wyoming charges approximately $50–$60 per year [Source: Wyoming SOS]. Delaware charges $50–$200 depending on authorized shares [Source: Delaware Division of Corporations]. Your registered agent renewal runs another $50–$200 annually.
Total annual compliance: budget $150–$400 per year. If you hire a US accountant to prepare your LLC's tax return, add $300–$800 more. Your LLC is a disregarded entity, but you still need a filing.
Tax Withholding: The 30% Problem
This is the part most guides skip. Under IRS Section 1441, foreign owners of US entities face a standard 30% withholding on US-source Fixed or Determinable Annual or Periodical (FDAP) income. This applies to consulting fees, royalties, dividends, and similar income flows that originate from US sources.
India and the US do not have a bilateral tax treaty in force [Source: IRS Publication 519]. For FDAP income — consulting fees, royalties, rent, dividends — the standard rate applies with no reduction. India US tax treaty withholding rates are therefore not available; expect the full 30% on all qualifying US-source payments.
If your US LLC earns income from US clients, the paying party may withhold 30% before remitting funds to you. Structuring client payments carefully and understanding FDAP classification can reduce surprises at tax time. Opening a US bank account for a non-resident Indian founder early — before revenue starts — makes it easier to receive wire transfers and manage documentation.
FEMA and RBI Compliance for Indian Residents
If you are an Indian resident wiring funds to capitalize your US LLC, the Reserve Bank of India's Liberalized Remittance Scheme (LRS) applies. Indian residents can remit up to $250,000 per person per year for permissible current account transactions abroad [Source: RBI Liberalized Remittance Scheme].
Every wire transfer you send to your LLC needs LRS documentation. Your chartered accountant must provide FEMA-compliant CA certification for each transfer. Remittances above $250,000 require additional RBI reporting. Keep every wire transfer record — these documents matter during FEMA audits.
Real Example: A Bangalore Freelancer's First Year
An Indian freelancer based in Bangalore wanted to open a US consulting LLC. She paid $100 to form a Wyoming LLC, $150 for a registered agent, $100 for ITIN agent fees, and $60 for her first annual report. Total first year: approximately $410.
Her Indian CA handled FEMA compliance for the initial $15,000 wire transfer. She used an acceptance agent for the Form W-7 application and received her ITIN in 11 weeks. Banking followed within three weeks of receiving her EIN.
Her lesson: plan the ITIN first. Everything else — banking, compliance, client payments — depends on having it.
Frequently Asked Questions
Your Next Steps: Build Your US Business the Compliant Way
So the path is clear. Form your LLC in Wyoming or Delaware, apply for your ITIN via Form W-7, get your EIN through Form SS-4, open a US bank account with a fintech that works with non-residents, and keep your FEMA documentation current for every rupee transfer.
All of it is legal and well-documented. The compliance pieces deserve attention — the ITIN application, FEMA filings, and 30% withholding on US-source income are manageable, but they do require proper handling.
You do not need a lawyer. But you do need someone who has done this before — someone who knows which fintech accepts non-resident Indians, which acceptance agent processes Form W-7 fastest, and exactly what your LRS documentation needs to say.
NexFyla specializes in non-resident Indian US LLC formation. We handle the paperwork, the IRS filings, and the compliance checklist — so you can focus on building your business.
Want a full breakdown of the ITIN process from India? See our Complete ITIN Guide for NRIs — covers acceptance agent selection, common rejection reasons, and what to do if your application is returned.
Still deciding between Wyoming and Delaware? Our Wyoming vs Delaware LLC Comparison covers registered agent costs, annual report fees, and which state works better for specific business types.
Need help choosing a bank that actually accepts non-residents? See our Best US Banks for Non-Resident LLCs — Mercury, Relay, BlueVine, and others compared on requirements, processing time, and account types.
The 30% withholding foreign owner US LLC rule catches most Indian founders off-guard because they have never encountered it in India. Unlike India's domestic tax structure, the US imposes withholding at source on FDAP payments — meaning the payer (not you) remits the tax to the IRS before you ever see the funds. For a non-resident Indian earning consulting fees from US clients, this means every invoice payment may already be reduced by 30% before it hits your US bank account for a non-resident Indian founder's Mercury or Relay account. Plan your cash flow accordingly — the withholding is not optional, and there is no treaty to absorb it.