How an Indian Can Set Up a US LLC: Step-by-Step Guide for 2026

More Indian founders, freelancers and SaaS builders are opening US LLCs to sell to American customers, collect payments in dollars and look credible to US clients. The registration itself takes only a few days. The obligations afterwards, in both the US and India, are where people get caught out. Here is the complete picture for 2026.

Can an Indian resident own a US LLC?

Yes. A US LLC can be 100% owned by a non-US person. You do not need a US visa, a US address or a Social Security Number. Everything can be done from India.

What you do need is to follow India's foreign-exchange rules. A US LLC owned by an Indian resident counts as an Overseas Direct Investment (ODI) under FEMA, so it must be set up and reported correctly through your bank. We cover this in Step 6 below, because it is the step most online guides skip.

Step 1: Choose your state, Delaware or Wyoming

You do not have to form your LLC in the state where your customers are. Most non-resident founders choose one of these two:

Our view: for most Indian freelancers, consultants and small online businesses, Wyoming is the cheaper and simpler choice. If you plan to raise venture capital, investors will usually want a Delaware C-Corporation rather than an LLC, so decide this before you file.

Step 2: Appoint a registered agent

Every US LLC must have a registered agent, a person or company with a physical address in the state who receives legal and government mail for you. As a non-resident you will use a professional agent service, typically $50 to $300 a year.

Step 3: File the formation document

In Wyoming this is the Articles of Organization; in Delaware, the Certificate of Formation. It is filed online with the state and is usually approved within a few business days. You will need:

• Your LLC name (check it is available on the state's website)
• Your registered agent's details
• Your name and address as the organiser and member

Alongside this, sign an Operating Agreement. It is not filed with the state, but banks ask for it, and it records who owns the LLC and how it is run.

Step 4: Get an EIN from the IRS

The EIN (Employer Identification Number) is your LLC's US tax ID. You need it to open a bank account and file returns. It is free from the IRS.

Without a Social Security Number you cannot use the IRS online form. Instead, you submit Form SS-4 by:

• Phone: the IRS international line, +1 267-941-1099 (Monday to Friday, 6 a.m. to 11 p.m. US Eastern time). The EIN is usually issued during the call.
• Fax: +1 304-707-9471 from outside the US. Usually about 4 business days.
• Post: about 4 weeks or more.

On the form, write "Foreign" where it asks for your SSN or ITIN. For a single foreign owner it is good practice to describe the entity as a "Foreign-owned U.S. disregarded entity – Form 5472", which flags your annual filing from day one.

Step 5: Open a US business bank account

With your formation document, EIN, Operating Agreement and passport, you can apply to US banks and fintech business accounts that accept non-resident owners. Requirements change often, so check each provider's current eligibility for Indian residents before applying. The bank will also ask you to certify who owns and controls the LLC.

Step 6: Report the investment in India (FEMA / ODI)

This is the step that protects you in India. Under the Foreign Exchange Management (Overseas Investment) Rules, 2022:

• Taking ownership of a foreign entity, even at initial subscription and even if little or no money is sent, is treated as ODI and must be reported through your bank (Authorised Dealer) in Form FC.
• A resident individual can make ODI only in a foreign entity carrying on a genuine business activity, and not in one engaged in financial services.
• If you, as an individual, control the LLC, it cannot have its own subsidiaries ("step-down subsidiaries").
• Money you send counts towards your Liberalised Remittance Scheme limit of USD 250,000 per financial year, and Tax Collected at Source (TCS) may apply on the remittance.
• Ongoing filings follow, such as the Annual Performance Report.

Skipping this step is a FEMA contravention, and it often only surfaces years later, when you try to bring money back or sell the business.

Step 7: Stay compliant every year

In the US

• Form 5472 with a pro forma Form 1120, due 15 April each year for a single-member LLC owned by a foreign person. It is required even if the LLC earned nothing; simply putting capital in is a reportable transaction. The penalty for missing it is USD 25,000 per form, per year.
• State fees: the Wyoming annual report or the Delaware annual tax, plus your registered agent's renewal.
• Federal income tax depends on whether your LLC has income connected with a US trade or business. Many Indian service providers working from India have no US income tax to pay, but this needs to be checked case by case.

Good news on BOI: FinCEN has now permanently exempted US-formed companies, including LLCs, from beneficial ownership (BOI) reporting under the Corporate Transparency Act. Your US LLC no longer needs to file a BOI report.

In India

• As an Indian tax resident you are taxed on your worldwide income, including what you earn through the LLC.
• Declare the LLC under Schedule FA (Foreign Assets) in your income tax return. Non-disclosure can attract heavy penalties under the Black Money Act.
• Because the US and India may treat an LLC differently for tax purposes, claiming credit for any US tax needs careful planning under the India–US tax treaty.
• If the LLC is effectively run from India, consider the "place of effective management" (POEM) rules.

How much does it cost in total?

For a Wyoming LLC, budget roughly USD 100 in state fees plus USD 50 to 300 for a registered agent in year one, then about USD 60 plus the agent fee each year after. Delaware costs more each year because of its $400 annual tax. On top of this come professional fees for the EIN, ODI reporting and annual filings in both countries.

Common mistakes we see

• Forming the LLC first and thinking about FEMA later, or never
• Not knowing that Form 5472 exists until a USD 25,000 penalty notice arrives
• Choosing Delaware without needing it, and paying more every year
• Forgetting to disclose the LLC in Schedule FA of the Indian return
• Mixing personal and business money in the LLC's account

Need help setting up your US LLC?

Finzglobe handles the full process for Indian founders: choosing the state, formation, registered agent, EIN, ODI reporting through your bank, and the yearly US and Indian filings, so nothing is missed on either side.

See our Business Setup services Talk to our experts

This article is general information as of October 2026, not legal or tax advice for your situation. Fees and rules change; please confirm the current position before acting.