What is us subsidiary of an indian company?
The US entity half done properly: C-Corp or LLC with the Indian parent as owner, registered agent, and the EIN by the fax path that actually works without an SSN.
An Indian company setting up a US subsidiary isn't choosing a special entity type — US law has no separate "foreign subsidiary" category. The subsidiary is a standard Delaware (or home-state) C-Corp or LLC, formed the same way any US founder forms one, with the Indian parent company listed as the sole shareholder or member instead of an individual. The complexity that actually exists lives entirely downstream of formation: who signs as the responsible party on the tax paperwork, how the EIN gets obtained without an SSN, and what the IRS expects to see every year once a foreign parent owns a US entity.
The first fork is C-Corp versus LLC, and it usually tracks what the subsidiary is for. A US C-Corp is the standard choice when the subsidiary will raise its own US capital, hold US IP, or sign US enterprise contracts that expect a corporate counterparty — it also puts a straightforward Form 1120 corporate return in front of the Indian parent's tax advisors. A single-member LLC owned by the Indian parent is a disregarded entity for US tax purposes by default, which changes the filing shape (Form 5472 attached to a pro forma 1120, not a full corporate return) without changing the underlying reporting obligation. Neither choice is made here — it follows from what the parent company needs the US presence to do, and a CPA or international-tax attorney should weigh in before the filing goes in, since the tax posture is set at formation, not fixed later without cost.
Who does what
CapEasy prepares and files the entity and EIN; Form 5472/1120, transfer pricing and treaty positions run through partner CPA firms and international-tax counsel.
Who does what
| Your CapEasy team | US subsidiary of an Indian company, the reconciliations and reporting behind it, and the questions list that keeps it honest. |
| Your CPA or enrolled agent | Everything that carries a licence in United States — rendered exactly as written: issue compilation, review or audit reports — those are restricted to licensed cpa firms. |
| You | One conversation with one named person, and the decisions that are genuinely yours. |
US subsidiary of an Indian company in United States
There is no 'foreign subsidiary' entity type — it's a standard C-Corp or LLC with the parent as owner
US state corporate law does not distinguish a foreign-owned entity from a domestically-owned one at the point of formation. A Delaware Certificate of Incorporation or Certificate of Formation for an Indian-parent-owned subsidiary is the identical document, filed the identical way, as one for a US founder — the only difference is whose name sits in the ownership field. Anyone selling a distinct "foreign subsidiary formation" product as though it were a different filing is describing paperwork sequencing, not a different legal entity.
Form SS-4 needs "Foreign" written in the SSN/ITIN box, and the online EIN tool is unavailable
The IRS online EIN application requires the responsible party to enter a US SSN or ITIN and will not proceed without one, which rules it out for a subsidiary whose authorized signatory is based in India. Form SS-4 must be submitted by fax or international mail instead, with the word "Foreign" entered in the SSN/ITIN field per the IRS's own SS-4 instructions rather than left blank — a blank field is a common cause of an SS-4 bouncing back unprocessed. We complete and route the SS-4 correctly on the fax path so the application is not rejected for a formatting error on the first attempt.
Form 5472 applies even at zero US revenue, and the penalty for missing it is $25,000 minimum
A US entity that is 25%-or-more foreign owned — which describes every wholly-owned subsidiary of an Indian parent — has to file Form 5472 annually if it had any reportable transaction with that foreign owner, and a disregarded-entity LLC attaches it to a pro forma Form 1120 specifically for this purpose even when the LLC otherwise files nothing. Per the IRS Instructions for Form 5472, a reporting corporation that fails to file when due is assessed a $25,000 penalty, with an additional $25,000 for each 30-day period the failure continues once the IRS has given notice. This obligation exists independent of whether the subsidiary turned a profit, took a loss, or did nothing at all in a given year — inactivity is not an exemption.
S-Corp election is categorically unavailable while the owner is an Indian company
IRS eligibility rules for an S-Corp election (Form 2553) bar nonresident-alien shareholders outright, and a foreign corporation as owner fails the same test — S-Corp status requires shareholders to be individuals, estates, or certain trusts, not a company incorporated in India. This is a hard eligibility gate under the IRS's own Form 2553 instructions, not a preference to be negotiated around, and it matters specifically because a client sometimes asks about S-Corp treatment expecting it to be a routine tax-savings option the way it can be for a US-resident founder.
What your CPA or enrolled agent receives from us
- A completed Certificate of Incorporation (C-Corp) or Certificate/Articles of Organization (LLC) naming the Indian parent as sole shareholder or member, ready for state filing.
- A US registered-agent appointment on file, satisfying the requirement that the foreign parent cannot act as its own agent.
- A completed Form SS-4 with the responsible party identified and "Foreign" entered correctly in the SSN/ITIN field, per IRS instructions, routed by fax.
- A fax transmission confirmation and elapsed-time tracker against the ~4–7 business day IRS turnaround, so a stalled application is caught rather than assumed to be processing.
- A one-page entity-structure summary — parent company, US entity, ownership percentage, responsible party — formatted for the bank account application and for the CPA who will scope the 5472/1120 engagement.
- A log of intercompany transactions between the US entity and the Indian parent (funding transfers, invoiced services, IP licensing, cost-sharing) organized and dated, ready for the partner CPA or international-tax counsel to build the Form 5472 filing and any transfer-pricing documentation from.
