Forming a US LLC from India is now the standard way for Indian founders to unlock full USD Stripe access with no US visa, SSN, or travel required. Stripe India moved to invite-only in May 2024, and a US LLC (a Limited Liability Company, the most flexible US business structure) is the cleanest fix. If you want a full overview of how the LLC structure works before diving into the India-specific details, the LLC page covers the fundamentals.
Any Indian resident can form a US LLC remotely. No US visa, SSN (Social Security Number), or travel required. Formation takes 5–15 business days depending on state. According to the IRS, an EIN (Employer Identification Number, the US federal tax ID) arrives by fax in approximately 4 business days for non-resident applicants using Form SS-4.
But Indian founders face two compliance layers that most guides ignore entirely. The US side requires an EIN, and Form 5472 if you have reportable transactions. The India side requires FEMA (Foreign Exchange Management Act) compliance, ODI (Overseas Direct Investment) filings, TCS (Tax Collected at Source) on remittances above INR 10 lakh, and Schedule FA disclosure in your Indian tax return.
Both layers apply simultaneously. This guide covers both.
Stripe India moved to invite-only in May 2024. According to Stripe, eligibility for a USD merchant account is determined by where the business is legally registered not where the founder lives. A US LLC formed in Wyoming, Delaware, or New Mexico is US-registered and therefore fully Stripe-eligible, even if 100% owned by an India-resident founder. India-local Stripe is INR-only and restricted to invited businesses only as of 2026.
Why Indian Founders Form a US LLC
A US LLC gives Indian founders something India-registered businesses cannot easily get: full access to global payment infrastructure, USD banking, and US market credibility without leaving India.
Stripe India Is Invite-Only Since May 2024 A US LLC Fixes This
Stripe moved India-registered businesses to invite-only in May 2024; self-serve signup is no longer available. India-local Stripe is INR-only with restricted features. This is not a niche edge case it affects every India-registered business trying to accept USD online.
According to Stripe, eligibility is determined by where the business is legally registered, not where the founder lives. A US LLC is US-registered. That makes it Stripe-eligible regardless of the founder’s Indian address. Competitors like doola, ZenBusiness, and Firstbase mention Stripe access generically, none name the May 2024 invite-only change or the INR restriction.
Full USD Payments Without an Indian Payment Gateway
Mercury does not list India as a prohibited country (confirmed as of 2026-05-31). Indian founders sit in a different position from founders in Pakistan, Nigeria, or the Philippines, all of whom Mercury explicitly prohibits. Combined with Wise Business US routing numbers, an Indian-owned US LLC can receive USD payments without any Indian payment gateway.
No US Citizenship, Residency, or Travel Required
Any non-US resident can legally own a US LLC. Formation is fully remote. No SSN (Social Security Number) is needed to obtain an EIN (Employer Identification Number US business tax ID). According to the IRS, non-residents apply for an EIN by faxing Form SS-4 to 855-641-6935 the online application requires an SSN and is not available to Indian founders. Indian founders complete the entire process from India.
The Two Compliance Layers Every Indian Founder Must Understand
Forming a US LLC from India triggers two independent regulatory systems. Both apply to you simultaneously. Missing either one carries serious financial consequences.
US Side: EIN, Form 5472, and Federal Filing Obligations
An EIN (Employer Identification Number, the 9-digit federal tax ID issued by the IRS) is required before you can open a US bank account or activate payment processors. For a single-member LLC owned by a non-resident, the IRS also requires Form 5472 plus a pro-forma Form 1120 for any year with reportable transactions. Reportable transactions include capital contributions and distributions between you and the LLC.
According to IRC 6038A, the failure-to-file penalty is $25,000 per form per year. An additional $25,000 applies for every 30-day period after 90 days from an IRS notice with no maximum cap.
Zero US tax owed does not eliminate your US filing obligation. That is the mistake most formation guides miss entirely.
India Side: FEMA, ODI, and Outbound Investment Rules
FEMA (Foreign Exchange Management Act — India’s law governing cross-border money flows) classifies your US LLC membership interest as unlisted equity. Acquiring unlisted equity in a foreign entity is ODI (Overseas Direct Investment — India’s regulatory framework for resident individuals investing in foreign entities) under the FEMA (Overseas Investment) Rules 2022.
Before remitting any funds, your AD Category-I bank must obtain a Unique Identification Number (UIN) from the RBI for the foreign entity. You file Form A2 for the outward remittance. After investment, you must file an Annual Performance Report by December 31 each year.
Why Missing Either Layer Creates Real Risk
According to FEMA Section 13, the penalty for contravention is up to 3 times the amount involved, plus INR 5,000 per day for a continuing contravention. The IRS Form 5472 penalty has no cap after an IRS notice.
These penalties operate independently. A FEMA violation does not reduce your IRS exposure, and vice versa. Work with both a US CPA and a qualified Indian CA before remitting funds or filing returns.
Indian residents forming a US LLC face dual compliance obligations as of 2026. On the US side, the IRS requires Form 5472 plus a pro-forma Form 1120 for any year with reportable transactions including capital contributions from India — under IRC 6038A.
The failure-to-file penalty is $25,000 per form per year, with an additional $25,000 per 30-day period after 90 days from IRS notice and no maximum cap. On the India side, FEMA Section 13 penalties for ODI contravention reach up to 3 times the amount involved (or INR 2 lakh where not quantifiable), plus INR 5,000 per day for each day the violation continues.
India-Side Compliance: FEMA, ODI, LRS, TCS, and Schedule FA
Every guide covering US LLC formation ignores what happens on the Indian side. That gap is expensive. Indian founders face FEMA obligations, TCS cash-flow hits, and annual filings that exist entirely outside the US formation process.
Is Forming a US LLC ODI or LRS? Ask a CA First
LRS (Liberalised Remittance Scheme) RBI’s framework, lets a resident individual remit up to USD 250,000 abroad per financial year (April–March) without prior RBI approval. LRS applies only to resident individuals, not corporates, HUFs, partnership firms, or trusts.
A US LLC is unlisted equity. Under the FEMA (Overseas Investment) Rules 2022, acquiring any unlisted foreign equity is generally classified as ODI (Overseas Direct Investment) not a straightforward LRS transaction. Do not assume a route. Confirm ODI vs. LRS-OPI applicability with a qualified Indian CA before remitting a single rupee.
TCS on Outbound Remittances: 20% Above INR 10 Lakh
TCS (Tax Collected at Source) tax your AD bank deducts on outward remittances above the threshold — is the most overlooked cash-flow event for Indian founders.
The threshold is INR 10 lakh per PAN per financial year (raised from INR 7 lakh effective April 1, 2025), combined across all purposes and all authorised dealers. Above that threshold, the TCS rate for investment/other remittances is 20%. According to the Finance Act 2026, the reduced TCS rate of 2% applies only to education, medical treatment, and overseas tour packages the 20% rate for investment and other remittances is unchanged.
TCS is not a final tax. It is refundable via your income-tax return (reflected in Form 26AS/Form 27D). However, it is real money locked until your ITR is processed budget for that delay.
ODI Process: AD Bank, UIN, Form A2, and Annual Performance Report
Your AD Category-I bank must obtain a Unique Identification Number (UIN) from the RBI for the US LLC before any remittance occurs. Form A2 is filed for the outward remittance. PAN is mandatory on Form A2 absence triggers a higher TCS rate under Section 206CC.
Ongoing compliance requires an APR (Annual Performance Report) the mandatory annual filing for Indian residents with overseas investments in Form ODI Part II, due December 31 each year, certified by a CA. Missing the APR is a FEMA contravention. According to FEMA Section 13, the penalty is up to 3 times the amount involved, plus INR 5,000 per day for a continuing contravention.
Schedule FA: Disclosing Your US LLC in Your Indian ITR
Indian tax residents must disclose US LLC ownership and foreign bank accounts in Schedule FA of their Indian ITR. Non-disclosure attracts scrutiny under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015. This disclosure is mandatory every year, not a one-time step.
Repatriation: Where Profits Must Go
Dividends and distributions from your US LLC must be repatriated within 60 days of becoming due into a normal resident bank account. NRE and NRO accounts are for NRIs only routing profits there as an Indian resident is a common and costly mistake.
How to Form a US LLC From India: Step-by-Step (US Side)
Step 1: Choose Your State Wyoming, Delaware, or New Mexico
Three states dominate for non-resident founders. Wyoming charges a $100 filing fee and $60 per year minimum. Delaware charges $90 to file and a flat $300 annual franchise tax. New Mexico costs $50 to file with no annual report and no annual fee the lowest ongoing cost of the three. Avoid California: its $800 annual minimum franchise tax applies regardless of revenue.
Step 2: Appoint a Registered Agent
Every US LLC must have a Registered Agent (RA) a person or service with a physical street address in the state of formation. PO boxes are not accepted in any US state. Your RA receives legal and tax documents on the LLC’s behalf. For Indian founders operating remotely, a professional RA service handles this role.
Step 3: Get Your EIN Without an SSN
An EIN (Employer Identification Number the 9-digit federal tax ID) is free directly from the IRS. Indian founders have no SSN, so the IRS online application is unavailable. Fax is the reliable path.
Fax Form SS-4 to 855-641-6935 the domestic routing number for LLCs with a registered-agent address in their formation state. Include a return fax number. According to the IRS, you receive a cover sheet with your EIN in approximately 4 business days.
The CP-575 paper confirmation arrives separately by mail 2–6 weeks later that is not EIN issuance. Your EIN is valid from the moment the fax confirmation arrives.
Note: a new EIN takes up to approximately 2 weeks to enter IRS permanent records. Until then, it cannot be used to e-file returns or pass IRS TIN matching. If you later need to verify your tax identification status with US clients or platforms, understanding What is an ITIN Number can clarify how ITINs differ from EINs and when each applies to non-resident owners.
If the CP-575 is lost, request a 147C letter via the IRS Business & Specialty Tax Line at 800-829-4933.
Non-resident Indian founders cannot use the IRS online EIN application — it requires an SSN (Social Security Number). As of 2026, the IRS-recommended method for non-residents is to fax Form SS-4 to 855-641-6935 with a return fax number included.
According to the IRS, the EIN arrives by fax in approximately 4 business days. The CP-575 paper confirmation letter arrives by mail 2–6 weeks later but is not EIN issuance the EIN is valid from the moment fax confirmation is received. Obtaining an EIN directly from the IRS is free.
Step 4: File Form 5472 Even With Zero US Income
A single-member foreign-owned LLC must file Form 5472 with a pro-forma Form 1120 for any year with reportable transactions. Here is the critical point for Indian founders: transferring money from India to capitalise the LLC is itself a reportable transaction. Funding the LLC triggers this obligation from day one.
According to the IRS, the failure-to-file penalty is $25,000 per form per year. An additional $25,000 applies per 30-day period after 90 days from IRS notice, with no maximum cap. Zero US tax does not eliminate this filing requirement.
One compliance note: BOI (Beneficial Ownership Information a federal reporting requirement) is currently not required for US-formed LLCs. According to FinCEN, US-formed LLCs are exempt per the interim final rule effective March 26, 2025.
Banking Reality for Indian Founders: Mercury, Wise, and Stripe
Mercury: Available to Indian Founders (Unlike Pakistan, Nigeria, Philippines)
India is not on Mercury’s prohibited-countries list confirmed as of 2026-05-31. This matters: founders from Pakistan, Nigeria, Philippines, Nepal, and Bangladesh are all prohibited. Mercury accepts applications from Indian-resident owners of US LLCs with formation documents and an EIN (Employer Identification Number US business tax ID). No SSN or US presence is required.
Mercury is a fintech, not a bank. Deposits are FDIC-insured protected up to $250,000 per depositor by the US Federal Deposit Insurance Corporation, via partner banks Choice Financial Group and Column N.A.
Approvals tightened in 2025. Declines are often permanent. A clear business description and an active digital footprint improve your odds before you apply.
Wise Business: US Account Numbers Without a US Address
Wise Business accepts India-resident owners of US LLCs with an EIN. Activating US routing and account numbers costs a one-time fee of approximately $31 USD. According to Wise’s pricing as of 2026, receiving USD via ACH is free; receiving USD via domestic or international wire costs $6.11 per transaction.
One friction point competitors including doola, ZenBusiness, and Northwest Registered Agent consistently omit: Wise may require an official IRS EIN confirmation document CP575, 147C, or an IRS-stamped SS-4. The EIN number alone may not satisfy Wise’s KYC review.
CP575 arrives by post weeks after EIN issuance; request a 147C if you need faster written confirmation. US clients or platforms that ask you to certify your tax status may also require you to complete Form W-9 Explained in Detail understanding when and how to use it avoids unnecessary payment holds.
Wise standard balances are NOT FDIC-insured by default. Wise is a licensed Money Services Business balances are safeguarded in segregated accounts, which is not the same as FDIC deposit insurance.
Stripe: Use Your US LLC, Not Stripe India
Stripe India has been invite-only since May 2024 and is INR-only. Your US LLC is US-registered and fully Stripe-eligible for a USD merchant account. Use your Mercury or Wise US routing and account numbers for USD payouts. A verified EIN is required to fully activate Stripe payment processing on a US LLC account.
Brex: Why Most Indian Sole Founders Don’t Qualify
Brex requires at least one US-based founder or investor. Most India-resident sole owners do not meet this requirement and will be declined at the application stage.
Full Cost Breakdown: What Indian Founders Actually Pay
One-Time US Formation Costs (USD)
Your state filing fee is the unavoidable baseline. Wyoming costs $100 to file; add Bizstartz Basic at $199 and your minimum one-time cost is $299. Delaware files at $90, making the Bizstartz Basic bundle $289. New Mexico is the cheapest at $50 filing, so $249 total.
An EIN is free from the IRS Bizstartz charges only for the labor of obtaining it on your behalf. Activating US routing and account numbers on Wise costs a one-time fee of approximately $31 USD.
Annual Ongoing US Costs (USD)
Wyoming charges a minimum $60 annual report fee. Delaware charges a flat $300 franchise tax per year no exceptions. New Mexico charges nothing annually: no annual report, no fee. Mercury has no monthly fee for US LLC accounts.
India-Side Cash-Flow Impact: TCS and Compliance Costs
This is where competitors go silent and where Indian founders get surprised.
When you remit funds to capitalise your US LLC, TCS (Tax Collected at Source) applies at 20% on the amount exceeding INR 10 lakh per PAN per financial year for investment/other remittances. That threshold was raised from INR 7 lakh effective April 1, 2025.
According to the Finance Act 2026, Budget 2026 reduced TCS to 2% only for education, medical treatment, and overseas tour packages the 20% rate for investment remittances is unchanged. TCS is not a final tax it is refundable via your ITR. But the cash is locked until your refund is processed, which is a real working-capital constraint.
AD bank outward remittance charges vary by institution confirm the exact fee with your specific AD Category-I bank before remitting. Annual CA fees for ODI compliance (APR filing, Form ODI, ITR Schedule FA) also vary budget for an annual CA engagement.
All costs above are in USD. The INR equivalent fluctuates daily with the USD/INR exchange rate check the current rate with your bank before remitting; do not rely on a fixed figure.
As of 2026, Indian founders remitting funds to capitalise a US LLC face TCS (Tax Collected at Source) of 20% on the amount above INR 10 lakh per PAN per financial year a threshold raised from INR 7 lakh effective April 1, 2025.
According to the Finance Act 2026, Budget 2026 reduced TCS to 2% only for education, medical treatment, and overseas tour packages; the 20% rate for investment and other remittances remains unchanged. TCS is refundable via the Indian income-tax return (Form 26AS / Form 27D) but represents a real cash-flow lock-up until the ITR refund is processed.
The India-Side Obstacle No Formation Service Warns You About
Most formation guides stop at the US side. For Indian residents, the bigger risk sits with your AD Category-I bank in India.
Investing in a US LLC is Overseas Direct Investment (ODI) under the FEMA (Overseas Investment) Rules 2022. Before your bank sends a single dollar abroad, it must obtain a Unique Identification Number (UIN) from the Reserve Bank of India for your US LLC. Remitting funds before the UIN is issued is a FEMA contravention even if the amount is small.
According to FEMA Section 13, the penalty reaches up to 3 times the amount involved (or INR 2 lakh where the amount is not quantifiable), plus INR 5,000 per day for each day the contravention continues.
The sequence is non-negotiable: UIN first, remittance second. Reversing that order even by accident is a violation.
Here is the operational friction no competitor including doola, ZenBusiness, Bizee, Northwest Registered Agent, or Firstbase mentions: many branch-level bank staff have never processed ODI for US LLC membership interests. They may tell you the procedure does not apply, or simply not know the steps. Do not accept that answer.
Founders from Nepal face a structurally similar banking friction when remitting abroad the How to Form a US Company from Nepal guide covers how that process works for Nepali residents, which may be useful context if you are advising clients or partners across the region.
Bring a CA’s written guidance to the branch. Ask to speak with the senior forex or trade-finance officer. That person handles cross-border capital transactions and will recognise the ODI process.
Getting the sequence right at the bank protects you from a penalty that can exceed the investment itself.
Common Mistakes Indian Founders Make
The TCS Rate Confusion
Budget 2026 is circulating in founder communities as proof that TCS dropped across the board. That is wrong. According to the Finance Act 2026, the reduced 2% TCS rate applies only to education, medical treatment, and overseas tour packages. The 20% rate for investment and other remittances which includes funding a US LLC is completely unchanged. Budget for 20% TCS on the amount above INR 10 lakh per PAN per financial year, then recover it via your ITR.
The NRE/NRO Account Error
Many Indian founders assume they can receive US LLC distributions into an NRE or NRO account. NRE and NRO accounts are for non-resident Indians only. An Indian resident receiving repatriated LLC profits must use a normal resident savings or current account. Routing funds through NRE/NRO as a resident is not permitted under FEMA 1999.
The Zero-Income Filing Assumption
If your LLC has no US clients, you may believe no US forms are needed. That assumption is costly. According to the IRS, Form 5472 plus a pro-forma Form 1120 are required whenever reportable transactions exist capital contributions from India count. Failure-to-file carries a $25,000 penalty per form per year, with no cap on repeat penalties. Zero US tax does not mean zero filing.
Waiting for the CP-575
The CP-575 is a paper confirmation letter mailed 2–6 weeks after EIN issuance it is not EIN issuance itself. Your EIN is valid from the moment you receive fax confirmation. If Wise requires official confirmation, request a 147C letter from the IRS Business & Specialty Tax Line at 800-829-4933 rather than stalling operations waiting for postal mail. Indian founders who also need to establish individual US tax identity for example, to receive certain US-sourced payments should review How to Apply for an ITIN Number to understand when an ITIN is required alongside an EIN.
Frequently Asked Questions
Is forming a US LLC from India legal under FEMA?
Yes. Indian residents can legally own a US LLC. Because a US LLC is unlisted equity, the investment is generally classified as ODI (Overseas Direct Investment) under the FEMA (Overseas Investment) Rules 2022. You must route the remittance through an AD Category-I bank, obtain a UIN from the RBI before sending money, file Form A2, and submit an Annual Performance Report by December 31 each year. Confirm the correct route with a qualified Indian CA before you remit.
Do I need to pay 20% TCS when I fund my US LLC?
Possibly yes. The TCS threshold is INR 10 lakh per PAN per financial year (raised from INR 7 lakh effective April 1, 2025). According to the Finance Act 2026, Budget 2026 reduced TCS to 2% only for education, medical, and overseas tour packages the 20% rate for investment and other purposes is unchanged. TCS is refundable via your ITR; it is not a final tax, but it is a real cash-flow event that you must plan for.
Can I use Stripe with a US LLC if I live in India?
Yes. According to Stripe, eligibility is determined by where the business is registered, not where the founder lives. Stripe India moved to invite-only in May 2024 and is INR-only. Your US LLC is US-registered and fully Stripe-eligible for a USD merchant account use your EIN and Mercury or Wise US account details for payouts.
Can I open a Mercury account as an Indian resident?
Yes. According to Mercury’s prohibited-countries list (confirmed as of 2026-05-31), India is not prohibited. Apply with your US LLC formation documents and EIN, no SSN or US presence required. Mercury tightened KYC in 2025 and declines can be permanent, so prepare a clear, specific business description before applying.
How do I get an EIN without a US Social Security Number?
File Form SS-4 by fax to 855-641-6935 (for a US LLC with a registered-agent address in its formation state) with a return fax number. According to the IRS, you receive the EIN back in approximately 4 business days. The CP-575 paper letter arrives by mail 2–6 weeks later that is not EIN issuance; your EIN is valid from the fax confirmation. An EIN obtained directly from the IRS is free.
What is Form 5472 and do I have to file it?
Form 5472 is a US information return required for single-member LLCs owned by a foreign person when there are reportable transactions including capital contributions from India. According to the IRS, the failure-to-file penalty is $25,000 per form per year, with an additional $25,000 per 30-day period after 90 days from IRS notice, with no maximum cap. Zero US income does not eliminate this obligation.
Do I need to disclose my US LLC in my Indian income-tax return?
Yes. Indian tax residents must disclose foreign assets including US LLC ownership and foreign bank accounts in Schedule FA of their ITR. Non-disclosure can attract scrutiny under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015. This obligation is separate from your US-side Form 5472 filing; both apply independently.
Can I receive US LLC profits into my NRE or NRO account?
No. NRE and NRO accounts are for non-resident Indians only. As an Indian resident, repatriated dues from your US LLC must go into a normal resident bank account. Using NRE or NRO as a resident is not permitted under FEMA this is a common mistake. These account types become relevant only if you later change your status to NRI.
Which US state should an Indian founder choose?
New Mexico ($50 filing, no annual report, no annual fee) has the lowest ongoing cost best for testing. Wyoming ($100 filing, $60/yr minimum) offers low ongoing costs and privacy. Delaware ($90 filing, $300/yr franchise tax) suits founders planning to raise US venture capital. Avoid California the $800/yr minimum franchise tax applies regardless of revenue.
Will I be taxed in both the US and India?
India and the US have a Double Taxation Avoidance Agreement (DTAA). Indian residents can claim a foreign tax credit for US taxes paid against their Indian liability via Form 67. However, a US LLC’s disregarded-entity treatment can create characterisation mismatches between the two systems confirm the treaty position with a qualified Indian CA before structuring income flows.
How does forming a US LLC from India compare to using a service like doola or Firstbase?
doola and Firstbase handle US formation steps Articles of Organization, EIN, and Registered Agent. Neither service addresses India-side obligations: the ODI/LRS classification question under FEMA (Overseas Investment) Rules 2022, the UIN requirement before remittance, TCS at 20% on amounts above INR 10 lakh, or Schedule FA disclosure in your ITR. Those India-side obligations apply regardless of which US formation service you use and require a qualified Indian CA.
Conclusion
Forming a US LLC from India gives founders full USD Stripe access and Mercury banking Stripe India has been invite-only since May 2024, according to Stripe’s global eligibility page.
Formation is 100% remote. Wyoming costs $299 minimum through Bizstartz. According to the IRS, your EIN arrives by fax in approximately 4 business days no SSN required.
Two compliance layers apply simultaneously. The US side requires Form 5472 (a $25,000 penalty for failure to file, per the IRS). The India side requires FEMA/ODI registration, TCS at 20% on remittances above INR 10 lakh, Schedule FA disclosure, and an APR filed by December 31.
Bizstartz handles the US formation side. Your Indian CA handles ODI, LRS classification, TCS, and Schedule FA. Do not remit funds before confirming your ODI route with a qualified CA, the classification has real FEMA consequences.
We handle the US side. You handle the India side with your CA. Both sides covered.
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