HindiDoing Business in the United States A Complete Guide for Indian Entrepreneurs and Businesses
Updated November, 2025 including 05 November updates by USCIS policy manual - Author: Sukanya Raman, Esq, Country Head, India, Davies and Associates, Bangalore, IndiaA Complete Guide for Indian Entrepreneurs
The United States remains one of the strongest and most reliable destinations for Indian entrepreneurs looking to expand globally. With powerful government support, world-class infrastructure, deep capital markets, and a business-friendly ecosystem, the US offers unparalleled opportunities.
This guide provides a comprehensive overview of how Indian founders can enter, finance, operate, and scale a business in the US while understanding the regulatory, tax, and legal landscape. It explains the legal rules for transferring money from India, the process of acquiring or setting up a US business, the availability of government grants, the real tax burden in the United States, and the role of professional advisors — all written with the standard of detail and accuracy expected of a professional law firm.
Table of Contents 📑
Funding Your US Business
Understanding FEMA, LRS and Permitted Transfers
Indian entrepreneurs must ensure that transferring money from India to a US business complies with both Indian and US laws. Both countries have clear and structured rules that govern international investment. When followed correctly, these frameworks make it fully lawful and straightforward for an Indian entrepreneur to invest in, fund, or capitalize a US entity. The key is understanding FEMA, LRS, and ODI rules and how US banking systems receive business-related funds.FEMA the governing law for foreign investments
Under the Foreign Exchange Management Act (FEMA), Indian companies and individuals may legally establish or invest in overseas business ventures.The RBI’s ODI (Overseas Direct Investment) framework permits Indian corporations to create wholly owned subsidiaries (WOS) or joint ventures abroad, inject capital, provide loans, acquire assets for business use, and fund overseas operations, subject to disclosure and reporting requirements.
Indian companies are permitted to:
- set up wholly owned subsidiaries or joint ventures abroad
- provide equity or debt to foreign business entities
- acquire business assets or real estate for commercial use
- fund operations, expansions and acquisitions under the ODI regime
Official FEMA / ODI Sources:
- RBI ODI Guidelines https://rbi.org.in/scripts/FAQView.aspx?Id=26
- FEMA Regulations https://rbi.org.in/scripts/Fema.aspx
- Master Direction https://rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=10204
LRS individuals may remit up to USD 250,000 per year
The Liberalized Remittance Scheme (LRS) is the RBI mechanism that allows Indian residents to legally remit up to USD 250,000 per financial year for permitted capital and current transactions.This includes the ability to invest in equity of foreign companies, fund operations, pay incorporation fees, purchase equipment, engage professional services, or cover legitimate business-related expenses.
LRS supports:
- equity investment into a US corporation or LLC
- subscription to shares of a foreign entity
- business start-up expenses
- legal and professional fees
- travel for business purposes
- software, cloud services and digital tools
- vendor payments and professional consulting
- R&D or technical services delivered outside India
Official LRS Sources:
- RBI LRS Circular https://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=9847
- RBI LRS FAQ https://rbi.org.in/scripts/FAQView.aspx?Id=13
Other Permitted Transfers
Beyond ODI and LRS, India’s foreign exchange framework allows a wide range of outward remittances for legitimate business purposes under the automatic route. This includes payments for software, consulting, technical services, training, equipment leasing, cross-border licensing, and a broad set of B2B transactions.These transfers must be routed through an authorised dealer bank, with supporting documentation confirming business purpose. Most major banks — including SBI, HDFC, ICICI, Kotak and Axis — have dedicated international desks to assist business owners with ODI/LRS compliance.
Correct Receiving Structure
Once money is transferred, it should arrive into the US business’s bank account (not a personal account). This includes the business account of a:- US corporation
- US LLC
- US branch office
Additional Guidance on Setting Up a US Business
For more detailed professional guidance on setting up a business in the United United States — including structuring, immigration strategy, and compliance — please visit: https://www.usimmigrationadvisor.com/corporate-services.htmlHow to Choose a US Business
Understanding the Process, the Risks and the Role of Professional Advisors
Many Indian entrepreneurs enter the United States by purchasing an existing business rather than starting a new entity. This approach can be attractive because it may provide an existing customer base, immediate revenue, operational infrastructure, and in some cases, potential visa eligibility when structured correctly.However, acquiring a business in the United States is a highly regulated process that requires thorough due diligence, legal review, and financial verification.
Why Many Indians Prefer Buying an Existing US Business
Indian entrepreneurs often choose an existing business because it can reduce uncertainty: They may step into a company with an established market presence, ongoing revenue, employees already in place, and functioning operational systems. It allows faster market entry, avoids the typical start-up ramp, and can help establish credibility with customers, lenders, and local partners. In addition, some buyers prefer the operational familiarity of franchises or stable cash-flow businesses.The Role of the Business Broker
What a Business Broker Does
In the United States, business brokers are licensed professionals who facilitate the sale of privately held businesses. Business brokers act similarly to real-estate brokers, serving as intermediaries between buyers and sellers. Their responsibilities may include preparing summaries of seller-provided financials, coordinating meetings, maintaining confidentiality, managing negotiations, and ensuring that both parties follow the transaction timeline.What a Broker Does NOT Do
It is important for Indian entrepreneurs to understand that a broker does NOT verify the accuracy of financial statements, tax filings, or legal compliance. A broker is not an advisor to the buyer; their primary goal is to close the transaction, and they typically represent the seller’s interests. Therefore, buyers must rely on independent professionals — not the broker — to evaluate the business.The Critical Role of a CPA in Buying a US Business
What the CPA Reviews
A Certified Public Accountant (CPA) performs rigorous due diligence, which is fundamental in the United States. The CPA will examine the seller’s tax returns, payroll records, financial statements, liabilities, depreciation schedules, sales tax exposure, and multiple years of revenue. A CPA will reconcile bank statements with reported income to ensure accuracy. This is significantly more detailed than typical due diligence performed in India.Why This Differs from India
In India, Chartered Accountants (CAs) often perform a broad mix of compliance and tax functions. In the US, these functions are separated; compliance, financial verification, and tax analysis are the domain of CPAs, whose role is far more specialized. For acquisitions, CPA due diligence is indispensable.The Essential Role of an Attorney (Lawyer)
What the Attorney Handles
US attorneys play a central role in business transactions. Attorneys draft and negotiate Letters of Intent (LOIs), purchase agreements, assignment of leases, asset transfers, employment documents, indemnities, and closing documentation. Lawyers perform thorough legal due diligence, reviewing licensing status, regulatory compliance, past litigation, liens, debts, and contractual liabilities. Unlike in India, most good attorneys specialize in a specific area of practice. For example, employment lawyers are rarely involved in lease negotiations.Why a Lawyer Is Mandatory
The US legal system is highly documentation-driven and litigation-prone. Without legal review, buyers may unknowingly inherit significant liabilities, unpaid taxes, employee disputes, licensing problems, or pending lawsuits. A US attorney ensures the transaction is structured correctly and protects the buyer’s interests.Due Diligence the Most Important Step
Due diligence in the United States is multi-layered and should never be rushed. It includes analysis of:- financial records
- tax compliance
- payroll and HR systems
- commercial leases
- customer and supplier relationships
- equipment condition
- regulatory compliance
- market environment
- cash-flow stability
Types of Businesses Indians Commonly Buy
Indian entrepreneurs often pursue businesses that provide predictable revenue. These include food service companies, gas stations, hotels, convenience stores, logistics fleets, transportation services, IT consulting firms, retail operations, franchises, medical support services, e-commerce brands, and light manufacturing units. Every business type involves a different regulatory and licensing landscape, which must be reviewed carefully.Summary Choosing a Business Requires a Team
A safe acquisition in the United States requires multiple professionals:- a CPA to verify financials
- an attorney to manage legal risk
- a broker to locate opportunities
- an insurance advisor to mitigate operational risk
- a payroll provider to ensure compliance with US employment rules
Government Grants, Financing and Support
Yes US Government Support Is Available to Indian-Owned Companies
The United States provides extensive funding, support programs, grants, and incentives for businesses that invest, expand, or create jobs. Foreign-owned businesses, including Indian-owned companies, are eligible for many of these benefits if the US entity meets federal, state, or local program criteria. These programs exist because the US actively encourages international investment.Federal Government Support
United States Small Business Administration (SBA)
The SBA supports small businesses nationwide with loan guarantees, direct loans, and grants. Indian-owned US entities may qualify for:- SBA 7(a) loans for working capital
- SBA 504 loans for equipment and real estate
- SBA Microloans for early-stage funding
- SBIR and STTR grants for research and innovation
US Department of Agriculture (USDA)
USDA offers programs for businesses that operate in eligible rural areas. Foreign-owned companies are eligible.Programs include:
- Business and Industry (B&I) Guarantees
- Rural Business Development Grants
- Value-Added Producer Grants
SelectUSA Support Through US Consulates
SelectUSA, part of the US Department of Commerce, provides personal assistance through US embassies and consulates in India and other countries.SelectUSA help Indian entrepreneurs:
- identify grants and incentives
- understand regulatory requirements
- access state and city economic development agencies
- connect with professional advisors
State Government Support
Example Texas Enterprise Fund
States compete heavily for foreign investment. Texas offers performance-based grants to businesses that commit to job creation and capital investment. Other states — including Florida, Georgia, North Carolina, Ohio, and Virginia — offer similar incentives.Directory: https://www.usa.gov/state-business
Local Government Support
New York City Small Business Services
NYC provides:- grants
- loan guarantees
- free entrepreneurship training
- legal lease assistance
- hiring and workforce programs
- sector-specific incubators
Advantages of Operating in the United States
The United States offers powerful advantages that attract Indian entrepreneurs:Access to a Large and High-Value Market
The US has high consumer purchasing power, a large population, and strong enterprise demand, particularly in technology, healthcare, logistics, education, finance, clean energy, and professional services.Strong Investment Ecosystem
The US venture capital ecosystem is the largest in the world, offering early-stage funding, angel investment, accelerators, incubators, and private equity support.Advanced Infrastructure
The US offers stable legal systems, efficient logistics, advanced banking, digital infrastructure, and enterprise-grade platforms that accelerate business growth.Global Credibility
A US presence enhances brand recognition and significantly boosts international credibility in many industries.Access to Skilled Talent
The US offers deep talent pools in AI, biotech, engineering, data science, finance, manufacturing, and professional services.Flexible Corporate Structures
US corporate frameworks — particularly in Delaware — are highly regarded for their legal clarity and investor-friendly governance.Register a business: https://www.usa.gov/register-business
Disadvantages and Challenges
Regulatory Complexity
The US has federal, state, and local rules across taxation, employment, licensing, privacy, environmental compliance, and sector-specific requirements.https://www.regulations.gov
High Operational and Labor Costs
Wages are higher than in India, and employers often provide healthcare insurance, retirement benefits, and paid leave.https://www.dol.gov
Cultural Differences
US business culture is direct, documentation-heavy, and timeline-driven.https://www.trade.gov
Visa and Immigration Challenges
US visa categories involve extensive documentation and unpredictable processing times.https://www.uscis.gov
Highly Competitive Market
The US market is mature and competitive, requiring clear differentiation and strong execution.https://www.census.gov/econ
Complex Tax Environment
US businesses may face federal, state, and local taxes, which vary widely.https://www.irs.gov/businesses
Greater Legal Exposure
The US is more litigation-prone than India.https://www.uscourts.gov
Taxes in the United States
Why Actual Taxes Paid Are Often Lower Than Expected
Tax Rates Are Not the Full Picture
Headline corporate tax rates in the United States do not reflect the actual taxes businesses pay. In practice, taxable income is substantially reduced by the wide range of deductions and credits available.https://www.irs.gov/businesses/small-businesses-self-employed/business-taxes
US Deductions Are Extensive
The United States allows businesses to deduct:- salaries and benefits
- rent and utilities
- marketing and advertising
- travel and client engagement
- software and cloud services
- legal and professional fees
- interest payments
- research and development
- depreciation and amortisation
https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses
Tax Credits Reduce Liability Directly
Tax credits — unlike deductions — directly reduce the amount of tax owed.- R&D Credit https://www.irs.gov/businesses/corporations/research-credit
- Energy Credits https://www.irs.gov/credits-deductions
- Hiring Credits https://www.irs.gov/businesses/small-businesses-self-employed/business-tax-credits
Depreciation Benefits
The US allows accelerated depreciation, bonus depreciation, and Section 179 immediate expensing. This enables major equipment and asset deductions in the first year.Depreciation: https://www.irs.gov/businesses/small-businesses-self-employed/depreciation
Publication 946: https://www.irs.gov/publications/p946
Understanding Non-Compete Agreements in the United States
What They Are
Non-compete agreements restrict an employee from joining or creating a competing business for a defined time and geographic area. While non-compete agreements are generally unenforceable in India, they are typically enforceable in the US.Legal Landscape
The United States has a complex and evolving legal landscape. Some states — such as California, Colorado, Oklahoma, and Minnesota — heavily restrict or prohibit non-competes. The Federal Trade Commission (FTC) has proposed nationwide changes.Enforceability
Enforceability depends on the state where the employee works. Some states allow non-competes for senior roles only; others restrict them based on compensation or industry.Alternatives
Where non-competes are restricted, companies rely on:- confidentiality agreements
- non-solicitation agreements
- invention assignment agreements
- trade-secret protections
How US Advisors Differ From Those in India
Doing business in the United States requires the support of licensed and specialised professionals whose roles differ significantly from their Indian counterparts.Certified Public Accountant (CPA)
CPAs handle:- federal and state tax filings
- payroll compliance
- entity-level reporting
- foreign-owned business filings
- multi-state compliance
- financial due diligence
