United States / Guides / What it actually takes to open a US company from India
United States · guideWhat it actually takes to open a US company from India
The short answer
An Indian founder opening a US company is choosing between an LLC and a C-Corp, then a state of formation, then working through EIN acquisition without a Social Security Number, opening a bank account, and a first-year compliance calendar that starts the moment the entity is filed — none of these steps are optional extras, and skipping the sequencing on any of them (particularly the EIN and the compliance calendar) is what turns a straightforward formation into a stalled or penalised one. An LLC suits a bootstrapped or services business that wants simple pass-through taxation and light governance; a Delaware C-Corp is close to mandatory if the plan involves venture funding, because investors and their counsel expect it. The EIN — the number that unlocks a US bank account — cannot be obtained through the IRS’s instant online tool without a US Social Security Number or ITIN; it goes by fax (roughly 4–7 business days) or by mail (roughly 4–6 weeks), and choosing fax over mail is the single highest-leverage timing decision in the whole process. Once the entity exists, Delaware’s annual report and franchise tax, a registered agent renewal, and — for a foreign-owned entity — Form 5472 reporting exposure carrying a $25,000 minimum penalty for a missed or incomplete filing, all start running on their own clocks regardless of whether the company has started operating yet.
Key facts — verified dates on each
LLC or C-Corp: the honest version, not the marketing version
A US LLC is a pass-through entity by default — its profits and losses flow to its owner’s tax return rather than being taxed at the entity level, its governance is whatever the operating agreement says (no board, no mandatory annual shareholder meeting), and it is the default choice for a founder billing clients, running a services business, or building something that is not headed toward institutional fundraising in the near term. A US C-Corp is taxed at the entity level, requires a board, bylaws, and formal stock issuance, and is what venture investors and their counsel expect to see before they write a check — not because an LLC cannot legally raise investment, but because the standard instruments (SAFEs, priced equity rounds, option pools) are built around C-Corp stock, and asking an investor to work around that is friction most founders do not want to create.
The honest framing for an India-based founder deciding between the two: if the near-term plan is bootstrapped revenue, freelance/consulting income from US clients, or a small team without outside investors, an LLC is simpler to run and cheaper to maintain. If the plan genuinely involves raising from US or India-based VCs in the next one to two years, incorporate as a C-Corp from the start rather than forming an LLC and converting later — a conversion is its own legal and tax event, not a formality.
Delaware or your state of actual operations: what the choice really changes
Delaware is the default recommendation for a venture-track C-Corp because of its Court of Chancery (a specialised business court with a deep body of corporate case law investors’ counsel already knows) and because most standard fundraising paperwork assumes Delaware law without anyone having to negotiate it. None of that matters much for an LLC with no near-term fundraising plan — incorporating in the state where the business actually operates avoids paying for a second state’s registration.
The cost of choosing Delaware when the business operates somewhere else is foreign qualification: registering the Delaware entity as a "foreign" (out-of-state) entity in whatever state it actually does business in, which means paying and filing in two states rather than one, every year, indefinitely. A founder with no physical US operations and no near-term fundraising plan should weigh that ongoing dual-state cost against Delaware’s benefits honestly rather than defaulting to Delaware because it is the name they have heard most often.
The EIN reality: why fax beats mail by weeks, and why the SSN box matters
Every US entity needs an Employer Identification Number from the IRS before it can open a bank account, and the IRS’s online EIN tool — the instant, same-day option most US-resident founders use — is not available to an applicant whose "responsible party" lacks a US Social Security Number or ITIN. For an India-based founder, that means filing Form SS-4 by fax or by mail instead, and the difference between the two is not marginal: fax typically returns an EIN in roughly 4 to 7 business days, while mail typically takes roughly 4 to 6 weeks. Every downstream step — opening a bank account, receiving customer payments, signing up for a payment processor — waits on the EIN, which makes the fax-over-mail choice the single most consequential timing decision in the whole formation.
On the form itself, the responsible party field cannot be left blank for a foreign applicant without an SSN or ITIN — the IRS’s own instructions direct writing "Foreign" in that field rather than leaving it empty, which some founders (or the people helping them) get wrong on a first attempt and then have to correct through a second submission, adding another fax-or-mail cycle to the timeline.
Banking expectations for a foreign founder
A foreign-owned US entity opening a bank account at a traditional US bank commonly runs into a practical wall: many branches expect an in-person visit by a signatory, or at minimum a live video KYC session, before they will open a business account for a company with no US-resident owner on file. This is a bank-by-bank policy question rather than a fixed legal rule, so it is worth confirming directly with a specific bank rather than assuming every branch handles it the same way.
Neobanks and fintech providers built specifically for foreign-founder accounts (rather than adapted from a traditional retail banking product) have become the more common practical path for exactly this reason — they are generally built around remote KYC from day one. Whichever route is chosen, banking should be sequenced after the EIN arrives, not attempted before it, since most providers will not open the account without the EIN in hand.
The first-year compliance calendar starts the day the entity is filed, not the day it starts trading
A Delaware entity owes its recurring obligations regardless of revenue, activity, or whether the founder has even opened the bank account yet — inactivity does not reduce or pause any of it. A registered agent (a US-based party authorised to receive legal and state correspondence on the entity’s behalf) is mandatory from day one and renews annually. A Delaware C-Corp owes an Annual Report and Franchise Tax by 1 March each year: the Annual Report itself, and a Franchise Tax computed under one of two methods with a set minimum for each — the actual bill depends on the entity’s specific authorized-share structure, so a founder should model both methods before finalising a share count rather than after. A Delaware LLC instead pays a single flat annual tax by 1 June, with no separate annual report requirement.
On top of the state-level calendar, a foreign-owned US entity carries Form 5472 exposure with the IRS — an annual informational return (filed alongside a pro forma Form 1120 for a foreign-owned disregarded-entity LLC, or as part of the regular corporate return for a C-Corp) disclosing transactions between the US entity and its foreign owner. The penalty for a missed or incomplete Form 5472 is steep and immediate: a minimum of $25,000 for a single late or incomplete filing, with an additional $25,000 for every further 30-day period the failure continues once the IRS has given notice. This is not a fee that scales gently with how minor the oversight was — it is a flat floor, which is why it belongs on the compliance calendar from the entity’s first day rather than discovered at year-end.
- Registered agent — mandatory from filing, renews annually, must be a US-based party (a founder in India cannot serve as their own entity’s registered agent)
- Delaware C-Corp: Annual Report + Franchise Tax due 1 March, franchise tax minimum $175/yr (Authorized Shares Method) or $400/yr (Assumed Par Value Capital Method) — the lower of the two applies once both are computed
- Delaware LLC: flat annual tax of $300/yr, due 1 June, no separate annual report requirement
- Form 5472 (foreign-owned entities): annual IRS informational filing, $25,000 minimum penalty for a missed or incomplete filing, escalating $25,000 per further 30-day period of continued non-compliance after IRS notice
The India-side step this guide does not cover
Everything above is the US-side mechanics of getting the entity formed, banked, and compliant. None of it addresses the separate obligation that exists back in India the moment an Indian resident or Indian company actually holds shares or a membership interest in that US entity — the Overseas Direct Investment (ODI) framework under FEMA, executed through an Authorised Dealer Category-1 bank, with its own UIN, its own annual filings, and its own deadlines that run independently of anything on the US side. A founder who treats US incorporation as the finish line, rather than as one half of a two-country compliance picture, is the founder who discovers the India-side gap only when a bank or auditor asks for paperwork that was never filed. The companion guide on the ODI route covers that half in the same level of detail as this one covers the US half.
The figures, and when we checked them
These numbers change by year or by notification. Each one shows the date we last verified it against the source — if that date looks old, check the source before relying on it.
Questions on this
Should an Indian founder pick an LLC or a C-Corp?
An LLC fits a bootstrapped, services, or freelance business with no near-term fundraising plan — simpler governance, pass-through taxation. A C-Corp, almost always in Delaware, is the standard choice if venture funding is genuinely on the near-term roadmap, since investors’ standard paperwork is built around C-Corp stock. Converting an LLC to a C-Corp later is a real legal and tax event, so it is worth deciding this honestly upfront rather than defaulting to whichever is easier to file first.
Do I have to incorporate in Delaware?
No. Delaware is the standard recommendation for a fundraising-track C-Corp because of its established corporate case law and because investors’ counsel already knows it. A business with no near-term fundraising plan and no physical Delaware presence often does better incorporating in its actual state of operation, since a Delaware entity operating elsewhere has to additionally register (and pay) as a foreign entity in that operating state every year.
Can I open a US company without a Social Security Number?
Yes — a Social Security Number is not required to form a US entity or to obtain an EIN. What changes without an SSN or ITIN is the EIN application method: the IRS’s instant online tool is unavailable, so the application goes by fax or mail instead, with fax being dramatically faster.
How long does it actually take to get an EIN as an Indian founder?
Filing Form SS-4 by fax typically returns an EIN in roughly 4 to 7 business days. Filing by mail typically takes roughly 4 to 6 weeks. There is no online instant-EIN option available to an applicant whose responsible party lacks a US SSN or ITIN, so the fax-versus-mail choice is the main lever a founder has over this timeline.
What do I write on Form SS-4 where it asks for the responsible party’s SSN?
The field should not be left blank for a foreign applicant without an SSN or ITIN — write "Foreign," per the IRS’s own instructions for this scenario. Leaving it blank is a common cause of a rejected first submission, which then costs another full fax-or-mail cycle to correct.
Why is it hard to open a US bank account as a foreign founder?
Many traditional US banks expect an in-person visit or a live video KYC session before opening an account for an entity with no US-resident owner, and policy varies by bank rather than following one fixed rule. Fintech and neobank providers built specifically for foreign-founder accounts are the more common practical path, and either way, banking should wait until the EIN is in hand, since most providers require it before opening an account.
What does my US company owe every year even if it has no revenue yet?
A Delaware C-Corp owes an Annual Report and Franchise Tax by 1 March each year (franchise tax minimum $175 or $400 depending on the calculation method) plus a registered agent renewal. A Delaware LLC owes a flat $300 annual tax by 1 June instead, with no separate annual report. None of this is reduced or waived for an inactive entity — Delaware’s franchise tax is a flat charge for existing, not a tax on activity.
What is Form 5472 and why does it carry a $25,000 penalty?
Form 5472 is an annual IRS informational return required of a US entity with significant foreign ownership, disclosing transactions between the entity and its foreign owner. The IRS penalty for a missed or incomplete filing is a flat $25,000 minimum — not scaled to how small the oversight was — with an additional $25,000 for every further 30-day period the failure continues after the IRS gives notice. This is one of the highest-stakes deadlines a foreign-owned US entity carries and belongs on the compliance calendar from day one.
Once my US company is formed, is the compliance part over?
No — US-side compliance (registered agent, annual report/franchise tax, Form 5472) is one half of the picture. The other half is the India-side obligation that begins the moment an Indian resident or company actually holds shares in the US entity: RBI’s Overseas Direct Investment framework, with its own UIN, annual filings, and deadlines. See the companion guide on the ODI route for that half.
Do I need a US CPA or attorney for any of this?
Entity filing itself (Articles of Organization, Certificate of Incorporation, the EIN application) does not require a licensed US professional and can be prepared and submitted directly. Substantive drafting — bylaws with real legal effect, a negotiated multi-member operating agreement, an S-corp election’s eligibility screening, or actually preparing and signing Form 5472/1120 — sits with a US attorney or CPA/EA. A founder should expect the formation itself to be straightforward and the ongoing tax-return and legal-drafting work to route through a licensed professional.
Primary sources
- Delaware Division of Corporations — Official Fee Schedule
- Delaware Division of Corporations — Pay Taxes / Annual Report (corporations)
- Delaware Division of Corporations — Franchise Tax (LLC/LP)
- IRS — Apply for an Employer Identification Number (EIN) Online
- IRS — Instructions for Form 5472
Last reviewed 2026-08-16. Statutes and schedules change — the sources above are authoritative, this page is orientation.
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