Setting up a company in the USA as a Non-Resident (IT Industry)

1. Foreign Company to be Setup in USA Webinar Series: Episode3 PRESENTEDBY: VivekShah US Tax Expert Managing Partner @SmartAccountants MansiShah US Expat Tax Expert Sr. Tax Manager @SmartAccountants

2. WebinarOverview: Procedure to incorporate the company in USA Purpose Capital Transfer from India to USA KEY Entities Compliances at Federal Level Company incorporated in USA by Non resident Compliances at State Level

3. What is Purpose to Set Up A Company in USA: • The main purpose of setting up a company in the USA is to Create Global market and Global Brand. • Due to the favourable economic environment i.e. Non resident can purchase U.S. assets at lower prices than their home country. • Incentives offered by federal, state and local governments. • Access to new markets. • Stable Political environment.As say USA is “most attractive market for ventures capital and private equity funding. And World Bank ranked U.S fifth for its overall “ ease of doing business”. • Technological advancement: USA is known for its advanced technological innovations which will enhanced business’ Production and World Wide Communication. • Protection of Intellectual Property: The USA leads the world in the way it protects intellectual Property Rights (IPR).

4. Key Entities can setup in USA for doing a business: • When beginning a business, you must decide what form of business entity to establish ? • The most common forms of business are :

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6. QUESTION 1. Which of the following type of entity Owners report business profit and loss on personal tax returns?  General Partnership C Corporation

7. Company Incorporated in USA by Non-Resident • Here, We are are understanding that how to incorporate company in the USA as a foreigner, non-citizen or US citizen that lives outside the country. • Incorporating in the United States can increase your company’s credibility, gain access to the US market and investors (the world’s largest source of each). • If you are located outside the United States and wish to form a company in the US, then there are TWO types of Business Entity to form:

8. Procedure to Incorporate the Company in USA

9. QUESTION 2. The Registered Agent may or may not have a physical address in the state of formation.  TRUE FALSE

10. Explanation Of Procedure : • Choose Which type of Business Entity to Form • If any of the owners of the company are not US Citizens, then you have the option of either forming a Corporation or an LLC. There’s another entity type called an “S-Corporation” but that entity requires all shareholders to be US Citizens.” • Which State to Form Your Corporation or LLC • In the United States, there are 50 States or Washington DC. Which state you choose will depend on why you are forming the company. • Some US states are more “business-friendly” or “international-friendly” than others. • In USA there are 10 best States to form an LLC or Corporation.

11. QUESTION 3. Foreign person cannot be shareholder/member of? C Corporation S Corporation LLC None of the above

12. Explanation Of Procedure : • Now, we understand that which state given how much benefit to the company and Owners

13. Explanation Of Procedure : • There are Some States Where Tax Rate is High for LLC Or Corporation: • Maryland • Connecticut • New York • California • New Jersey • Now, we compare that which state is more beneficial for Corporating Company or LLC

14. Explanation Of Procedure :

15. QUESTION 4. The LLC formation can be done at state level by applying for?  Article of Organization EIN Certificate of good standing Apostille AOI

16. Funds Transfer From India To USA • Overseas Direct Investment (ODI): • Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange, signifying a long-term interest in the foreign entity. • As per the FEMA Regulations, any investment under the overseas direct investment may be in either of the followings: • Overseas Joint Ventures • Wholly Owned Subsidiaries • Here, Wholly Owned Subsidiary means a foreign entity formed, registered or incorporated in accordance with the laws and regulations of the host country, whose entire capital is held by the Indian Party. • General Prohibition on making of Overseas Direct Investment (ODI) • As per the FEMA Regulations, any Indian entity may, subject to the approval of Reserve Bank make investment in the foreign entities engaged in the below mentioned sectors; • Real Estate • Banking Businesses • An Indian Party may create charge, by way of pledge, on the shares of Joint Venture (JV) or Wholly Owned Subsidiary or Step Down Subsidiary outside India as a security in favor of an Authorized Dealer or a public financial institution in India or an overseas lender, for availing of fund based or non-fund based facility for itself.

17. QUESTION 5. Fund from foreign country is allowed under FEMA for which entity type: LLC C Corporation

18. Compliances In USA • The need for compliance with government requirements only gets more important after forming a corporation or LLC. • Very often the corporation or LLC was set up in the first place to help protect personal assets and provide tax-deductible benefits for owners and employees. • Corporations and LLCs have both internal and external ongoing requirements. Compliances at the Federal Level

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