Establishing a US company in India can be a powerful move for global expansion, offering unparalleled access to one of the world’s fastest-growing economies. At ADY & Co. Chartered Accountants, led by CA Yogesh Kumar, we have been helping entrepreneurs and multinational companies establish a strong footprint in India since 2012. With over a decade of experience, we provide expert legal, financial, and compliance guidance, making us the most admired CA in Delhi.
In this guide, we offer a comprehensive breakdown of how to set up a US company in India, covering legal structures, tax regulations, registrations, repatriation of profits, and more.
Why Set Up a US Company in India?
India offers an unbeatable combination of skilled workforce, cost-efficiency, and a large consumer base. It is an ideal market for American companies looking to expand. The Indian government, through various reforms and FDI (Foreign Direct Investment) policies, is actively encouraging foreign investments.
Key Benefits:
- Access to 1.4 billion consumers
- Low labor costs
- English-speaking professionals
- Strategic geographic location
- Expanding digital infrastructure
- 100% FDI allowed in most sectors under the automatic route
Legal Structures Available for a US Company in India
When looking to establish a presence in India, you can choose from the following business structures:
1. Liaison Office
A liaison office acts as a communication channel between the parent company and Indian entities. It cannot earn income in India.
2. Branch Office
A branch office can conduct business activities but cannot carry out retail trading or manufacturing directly. Income earned is taxable in India.
3. Project Office
Ideal for executing specific projects in India, usually in sectors like infrastructure and construction.
4. Wholly Owned Subsidiary (WOS)
A wholly owned subsidiary is an Indian company owned entirely by the US parent company. This is the most preferred route for long-term operations.
5. Joint Venture
Partnering with an Indian entity to form a new company. Risks and rewards are shared.
Step-by-Step Process to Set Up a US Company in India
Step 1: Choose the Right Business Structure
Evaluate your objectives, industry sector, and compliance requirements with the help of a CA in Delhi like CA Yogesh Kumar to finalize the ideal structure.
Step 2: Name Approval and Digital Signature Certificates (DSC)
- Apply for name reservation via SPICe+ form through the MCA portal
- Obtain Digital Signature Certificates (DSC) for all proposed directors
Step 3: Director Identification Number (DIN)
DIN must be obtained for all foreign and Indian directors. This is done along with company incorporation via SPICe+.
Step 4: Incorporation Filing with ROC
Submit incorporation documents:
- MOA & AOA (Memorandum and Articles of Association)
- Form SPICe+
- Proof of registered office
- Affidavits and declarations from directors and shareholders
Step 5: PAN, TAN & GST Registration
Post-incorporation, obtain a Permanent Account Number (PAN), Tax Deduction Number (TAN), and Goods and Services Tax (GST) registration.
Step 6: Open a Bank Account
Set up a current account in an Indian bank under the company’s name for capital inflow and business transactions.
Step 7: FEMA & RBI Compliance
If you are investing as a foreign entity, you must comply with Foreign Exchange Management Act (FEMA) and notify the Reserve Bank of India (RBI) via Form FC-GPR or FC-TRS.
Taxation Rules for US Companies Operating in India
Corporate Tax Rates
- Domestic companies: 22% (without exemptions)
- Foreign companies: 40% + surcharge + cess
Withholding Tax
Any royalty, interest, or fee for technical services paid to the US parent is subject to withholding tax, typically around 10%-15%.
Double Taxation Avoidance Agreement (DTAA)
The India-USA DTAA helps companies avoid being taxed twice on the same income.
Repatriation of Profits to the US
Profits can be legally transferred to the parent US company through:
- Dividends
- Royalties
- Technical Service Fees
- Interest Payments
These are subject to applicable taxes and RBI compliance. Our expert team at ADY & Co., led by CA Yogesh Kumar, ensures smooth and compliant repatriation.
Documents Required to Set Up a US Company in India
- Passport of directors and shareholders
- Board resolution of the parent company
- Proof of registered office address
- Notarized and apostilled incorporation documents
- KYC of authorized signatory
- Power of Attorney (POA)
Post-Incorporation Compliance in India
After incorporation, a company must fulfill several ongoing obligations:
- Filing of Annual Returns with ROC
- Income Tax Returns (ITR)
- Audit under Companies Act
- Transfer Pricing compliance
- Filing Form 3CEB if applicable
- GST filings (monthly/quarterly)
ADY & Co. Chartered Accountants, with its decade-long legacy of trust, can handle these compliances with precision and professionalism.
Why Choose ADY & Co. for Setting Up a US Company in India?
- Trusted CA in Delhi since 2012
- Led by CA Yogesh Kumar, expert in international tax and FEMA
- End-to-end setup and compliance services
- 100% Transparency & Timely Delivery
- Personalized consultation for US clients
Common Challenges and How We Solve Them
Challenges | Our Solution |
Legal structure confusion | Tailored business advisory |
Complex documentation | Full support with apostille & notary |
Regulatory delays | Proactive follow-ups with government bodies |
Tax compliance and DTAA application | Expert international tax planning |
Repatriation of funds | RBI approval and FEMA guidance |
Frequently Asked Questions (FAQs)
-
Is it permissible for a United States national to assume the role of director within an Indian enterprise?
Indeed, an individual holding U.S. citizenship is eligible to occupy the directorial seat in an Indian corporate entity. However, statutory norms necessitate the presence of at least one director domiciled within the territorial bounds of India.
-
What is the temporal span requisite for instituting an American firm upon Indian soil?
Ordinarily, the procedural orchestration unfolds over a window of approximately 15 to 20 operational days. This duration hinges substantially upon the promptness of documentation procurement and regulatory sanctions.
-
Is a physical voyage to India obligatory for inaugurating the corporate structure?
No terrestrial passage is mandated. The entirety of the establishment process may be navigated from afar, contingent upon the submission of duly notarized and apostilled manuscripts aligning with jurisdictional stipulations.
-
Is absolute foreign dominion within reach?
Affirmative. Within the expanse of most commercial sectors, a full-spectrum foreign direct investment is sanctioned via the automatic conduit, negating the need for prior governmental consent.
-
Where can one obtain perpetual compliance stewardship following incorporation?
ADY & Co., Chartered Accountants extend an all-encompassing suite of post-incorporation fiduciary services—ranging from GST alignment, income tax returns, and TDS orchestration to statutory audits—ensuring your venture remains in harmonious sync with India’s fiscal framework.