Indian Founders Who Have Registered a US Company: What Comes Next
You Have Your Delaware Entity. Now What, Immediate Actions (First 30 Days), and Annual Compliance Calendar
Forming the entity is the part that gets attention. What happens in the months and years afterwards is where founders based abroad most often come unstuck.
The first year usually has somebody watching. The second does not, and by then there is a state filing, an agent renewal, a federal return whether or not the company traded, and reporting the founder owes personally at home.
This covers what to do in the first weeks, the annual calendar on both sides, the mistakes that follow formation, and how it all interacts with an Indian entity you may still be running.
You Have Your Delaware Entity. Now What?
Formation is the easy part. The 30 days after formation are when most Indian founders make expensive mistakes, skipping the 83(b) election, not filing ODI, and forgetting annual compliance that starts from year one.
The second year is where this goes wrong, not the first. The first has somebody paying attention. The state filing, the agent renewal, the federal return and the founder's own reporting at home all fall due on dates nobody diarised, and losing good standing is slower to fix than to avoid.
Abhinav Gupta, CPA, CA, MBA · LinkedInImmediate Actions (First 30 Days)
1. File the 83(b) Election, 30-Day Hard Deadline
If your founder shares are subject to vesting, you must file an 83(b) election with the IRS within 30 days of the stock grant date. Not 31 days. No exceptions.
- File by mail to the IRS service center for your area (use the US entity address)
- Keep a copy and proof of mailing (certified mail with return receipt)
- Send a copy to the company's records and to each co-founder
- Cost: $0. The IRS does not charge for 83(b) elections.
2. File Form ODI with Your AD Bank in India
Before or within 30 days of your initial capital remittance to the US entity, file Form ODI Part I with your bank's Authorized Dealer. This registers your overseas investment with the RBI.
- Required for any direct investment in a foreign entity by an Indian resident
- LRS remittances for the investment go through your AD bank
- Keep a certified copy of the ODI filing for your records
3. Set Up Your Operating Infrastructure
- Get your EIN (if not already done) and add it to your bank account
- Open Mercury or Relay bank account
- Set up Stripe or appropriate payment processor
- Get basic accounting software (QuickBooks, Wave, or Xero)
- Draft and sign the Operating Agreement (LLC) or Bylaws + Shareholder Agreement (C-corp)
Annual Compliance Calendar
Delaware C-Corp Annual Requirements
| Deadline | Requirement |
|---|---|
| January 1 | Delaware franchise tax statement available for prior year |
| March 1 | Delaware franchise tax due (minimum $175, up to much more based on shares) |
| April 15 | Federal corporate tax return (Form 1120) due, can extend to October 15 |
| April 15 | Estimated tax payment (if applicable) |
| Ongoing | Annual board meeting + minutes |
| Ongoing | Annual report to Delaware (filed with franchise tax) |
Delaware LLC Annual Requirements
| Deadline | Requirement |
|---|---|
| June 1 | Delaware LLC franchise tax due ($300 flat) |
| May 15 | Form 5472 + Form 1120 (foreign-owned LLC), extend to November 15 |
| Ongoing | Keep registered agent active and paid |
India-Side Annual Requirements
| Deadline | Requirement |
|---|---|
| December 31 | Annual Performance Report (APR), file within 6 months of US fiscal year end |
| July 31 | Indian income tax return, include foreign income, claim DTAA credit if applicable |
| Ongoing | Keep Schedule FA (foreign assets) updated in Indian return |
Common Mistakes After Formation
Mistake 1: Not Filing Form 5472
Foreign-owned US LLCs must file Form 5472 + Form 1120 even if they have zero revenue and zero transactions. The IRS penalty for failure: $25,000 per form per year. This is the single most common and most expensive mistake.
Mistake 2: Delaware Franchise Tax Computed Wrong
If you authorized a large number of shares (typical for startups: 10,000,000), the Authorized Shares Method of computing franchise tax can result in bills of $50,000 or more. Always use the Assumed Par Value Capital Method, which for most early-stage startups results in the $175-$400 minimum.
Pro Tip: Tell your accountant or Delaware's online portal to compute franchise tax using the Assumed Par Value Capital Method. The state will not remind you.
Mistake 3: Operating Without Registered Agent
If your registered agent lapses (you forget to pay their annual fee), your entity can be declared void or delinquent by Delaware. Set a calendar reminder and pay your registered agent every year.
Mistake 4: Paying Yourself Without Payroll Setup
If your C-corp pays you a salary, you need US payroll setup even as a non-US-resident founder. Using services like Gusto or Rippling simplifies this. Random transfers from the company account to your personal account are not salary, they are distributions and have different tax treatment.
Mistake 5: Missing the Annual Performance Report in India
The APR must be filed with your AD bank within 6 months of the end of the US entity's financial year. Missing it is a FEMA violation.
If You Are Also Running an Indian Entity
If you have both an Indian company and a US company that transact with each other:
- Transfer pricing rules apply, document intercompany pricing
- India: File Form 3CEB (chartered accountant report) if international transactions exceed INR 1 crore
- US: IRC 482 arm's length standard for intercompany transactions
- Avoid having the US entity pay the Indian entity inflated service fees to shift profit, this is a common audit trigger
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Frequently Asked Questions
How much does ongoing annual compliance cost for a US entity from India?
Delaware LLC: ~$300 franchise tax + $50-200 registered agent + $500-2,000 CPA for Form 5472. Delaware C-corp: $400-$5,000 franchise tax + $200 registered agent + $1,500-$5,000 CPA for Form 1120. Budget $2,000-$7,000/year total depending on complexity.
When do I need to register in a state other than Delaware?
When you have employees, offices, or significant sales activity in another state. This triggers foreign qualification requirements and potentially state tax obligations in that state.
Can I be the director/officer of my Delaware C-corp from India?
Yes. Non-US residents can serve as officers and directors of US corporations. There is no residency or citizenship requirement.
Which records should we keep from day one, and where?
The formation documents, the agreement between the founders, the share or membership register, board and shareholder consents, and every filing acknowledgement from both countries. Keep them in one place that is not a personal inbox, because the first time anyone asks for them as a bundle will be a due diligence exercise under time pressure. A missing early consent is far harder to recreate two years later than to file properly now.
What usually goes wrong in the second year rather than the first?
The annual obligations, because the first year has somebody paying attention and the second does not. The state filing and its fee, the registered agent renewal, the federal return whether or not the company traded, and the reporting the founder owes at home all fall due on dates nobody diarised. None of them is difficult. All of them are easy to miss, and losing good standing is much slower to fix than to avoid.
Written by
Abhinav Gupta, CPA, CA, MBA
Abhinav works with business owners across the US on industry-specific bookkeeping, from dental practices and restaurants to construction and e-commerce. He writes about what each trade's books actually need. Connect on LinkedIn
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