How to Form a US LLC from India (2026): Banks, Payments, Taxes

Yes, you can form a US LLC from India entirely online, and India is one of the easier countries for banking: Mercury accepts Indian residents and Wise does not list India among the places without USD details. The catch is on the Indian side. When an Indian resident owns a foreign company, FEMA treats it as Overseas Direct Investment (ODI), with a filing through your bank and a yearly report. This guide covers how to start a US company from India in 2026 without breaking RBI rules, plus GST, banking and tax.

Why founders form a US LLC from India

Indian founders usually fall into four groups: SaaS and software startups selling to US customers; freelancers and agencies working through Upwork, Toptal and direct contracts; D2C and Amazon sellers going after the US market; and creators and app developers who want US payouts and a company on the App Store or Google Play.

The main pull is payments. Stripe India is invite-only for new businesses and requires an Import Export Code for international payments, and individuals cannot accept international payments on it. A US LLC with a US bank account can apply to Stripe US like any American business. US customers and investors also prefer a US counterparty, and many accelerators expect one.

A US LLC does not change your tax residence. If you live in India, India taxes you and expects the ODI and disclosure filings described below.

FEMA and ODI: the rule most guides skip

Since August 2022, overseas investment is governed by the Foreign Exchange Management (Overseas Investment) Rules and Regulations 2022 and the RBI’s directions. A resident individual taking a controlling stake in a foreign entity, such as a single-member US LLC, is making ODI. Key points:

• Route and limit: individuals invest under the Liberalised Remittance Scheme (LRS), capped at 250,000$ per financial year across all your LRS remittances. TCS may be collected on larger LRS remittances and can be claimed against your income tax.
• What you may invest in: Schedule III lets a resident individual make ODI only in an operating foreign entity that is not in financial services and has no subsidiary or step-down subsidiary. A plain trading, services or software LLC fits; an LLC that holds other companies does not.
• Reporting: the investment is reported in Form OI through your Authorised Dealer (AD) bank, generally within 30 days of the remittance. An Annual Performance Report (APR) is then due every year by 31 December for as long as you hold the stake, even if the LLC is dormant.
• Round-tripping: the rules restrict structures where the foreign entity invests back into India. Keep the LLC as an operating business, not a holding vehicle for Indian assets.

In practice, many founders fund a new LLC with a small amount of capital sent through their bank under the ODI route, then file Form OI. Ask your bank’s forex desk or a FEMA-familiar CA before the first remittance; late filings attract late submission fees.

Receiving money in India from your US LLC

Getting dollars into India is straightforward through banks and regulated platforms. What matters is how the money is characterised.

Two common models

Profit from your investment: the LLC earns, then distributes profits to you. In India this is income from your foreign investment, taxable in your return, and it shows in your APR. Your fee for services: you invoice the LLC as a contractor for the work you do from India. That is an export of services, with GST and export rules. Which model fits depends on your situation; a CA should decide, because mixing them creates mismatches.

Export rules from 1 October 2026

The RBI’s new Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2026 took effect on 1 October 2026, replacing the 2015 export regulations. For services exporters, an export declaration stating the full value must be filed with the AD bank within 30 days from the end of the month in which the invoice is raised, and one declaration can cover several recipients in a month. Banks may ask for invoices and contracts against each inward remittance; keep your FIRA (foreign inward remittance advice) and use the correct purpose code.

GST on exports of services

Exports of services are zero-rated. If you are GST-registered, file a Letter of Undertaking (LUT) in Form RFD-11 at the start of every financial year so you can invoice without paying IGST. Payment must arrive in convertible foreign exchange and the recipient must be outside India.

Payout tools

Money can reach India by SWIFT from Mercury or another US account, through Wise, Payoneer, or Indian cross-border platforms. PayPal India requires a purpose code before withdrawing to your Indian bank, and PayPal stopped domestic India payments in 2021, so it is useful only for international receipts.

Which banks and payment tools work for Indian residents

Provider	Status for an Indian resident owner (October 2026)
Mercury	Available. India is not on the prohibited-countries list. Physical cards are not shipped to India, but virtual cards work.
Wise	India is not on Wise’s list of addresses without USD details, so a US LLC with an Indian owner can usually get them. Confirm during sign-up.
Payoneer	Available, with INR withdrawals to Indian banks.
Stripe	Stripe India is invite-only and needs an IEC. A US LLC with a US bank account applies to Stripe US instead.
PayPal	Works for international payments; purpose code and documents needed to withdraw; no domestic India payments.

See Mercury vs Wise for non-resident LLCs and how to open Stripe as a non-resident.

Taxes for a US LLC from India: at home and in the US

This is general information, not tax advice. India taxes resident and ordinarily resident individuals on worldwide income. Your stake in the LLC and any US bank account it holds where you have signing authority must be reported in Schedule FA of ITR-2 or ITR-3 on a calendar-year basis; penalties for non-disclosure under the Black Money Act are heavy. India also does not treat a US LLC as transparent the way the US does, and a foreign company whose place of effective management (POEM) is in India can be taxed as Indian-resident, although small companies under a turnover threshold are carved out. These mismatches are why an Indian CA should review your structure.

In the US, a single-member LLC owned by a non-resident is usually disregarded and often owes no US income tax if it has no US trade or business. It still files Form 5472 and a pro forma 1120 every year; the penalty starts at 25,000$. The US–India treaty (signed 1989) exists, but because India and the US classify an LLC differently, treaty relief is not automatic.

Step by step: form a US LLC from India

1. Talk to your bank’s forex desk about the ODI route and Form OI before sending any capital.
2. Prepare documents: a valid Indian passport (Aadhaar and PAN are useful at home but not accepted as ID by most US providers) and proof of address such as a recent bank statement or utility bill in English.
3. File the LLC. State approval usually takes 5–7 business days.
4. Get the EIN without an SSN; see EIN without SSN. Timing depends on the IRS.
5. Open Mercury or Wise, then apply to Stripe US.
6. Remit capital and file Form OI within the deadline, then the APR every 31 December.
7. Each year: Form 5472 + 1120, Schedule FA in your ITR, LUT renewal if GST-registered, and LLC renewal (129$/yr in New Mexico).

Mistakes and scams to avoid

• Skipping the ODI filing because the capital was small or paid by card. The obligation comes from owning the entity.
• Filing ITR-1 while holding a foreign company: Schedule FA is not in ITR-1, so you have effectively failed to disclose.
• Making the LLC a holding company for Indian startups or other entities; individuals cannot use ODI that way.
• Services promising “no tax anywhere”. India taxes residents on worldwide income.
• Forgetting Form 5472 in a zero-income year.

New Mexico or Wyoming for Indian founders

New Mexico suits most service businesses and freelancers: no annual report, no yearly state fee, 129$/yr renewal from year 2. Wyoming (229$/yr from year 2, including the annual report) suits founders who want its asset-protection reputation. If you plan to raise from US venture funds, they usually require a Delaware C-Corp, which is a different structure. Compare in New Mexico vs Wyoming. Founders working with Pakistani or Bangladeshi teams can also read US LLC from Bangladesh.

Start your US LLC from India

LLC Station forms New Mexico LLCs from 249$ (Starter), 349$ (Builder, adds EIN and bank-application help) or 499$ (Diamond, adds Stripe setup with you, Operating Agreement, US phone number and first-year Form 5472 + 1120). Wyoming starts at 299$. State fee and first-year registered agent are included. Start your New Mexico LLC or read the complete non-resident guide.

Frequently asked questions

Is it legal for an Indian resident to open an LLC in the USA?

Yes, under the ODI framework. A resident individual can invest in an operating foreign entity that is not in financial services and has no subsidiaries, report it in Form OI through an AD bank, and file an APR every year.

Can I open Mercury from India?

Yes. India is not on Mercury’s prohibited list. Physical cards are not shipped to India, but virtual cards work for online spending.

Do I need an IEC to receive payments from my US LLC?

The DGFT does not generally require an IEC for services exports unless you claim Foreign Trade Policy benefits, but Stripe India and some platforms ask for one. Check with your bank under the 2026 export regulations.

Do I charge GST on invoices to my US LLC?

Exports of services are zero-rated. If you are GST-registered, file an LUT each financial year and invoice without IGST, provided the conditions for export are met.

Does the US–India tax treaty mean I pay tax only once?

The treaty helps avoid double tax, but India and the US classify LLCs differently, so relief is not automatic. A CA familiar with cross-border structures should review it.

Why should I use Stripe US instead of Stripe India?

Stripe India is invite-only and limits international payments. A US LLC with a US bank account can apply to Stripe US, though Stripe still verifies the owner.