A US company can solve a real payment problem for some Indians earning in dollars. For many others, it is an expensive answer to a question they do not have.

The invoice says $2,000. The figure that lands in the bank account reads closer to ₹1.6 lakh - after a conversion rate nobody explained and a fee nobody itemised.

For a growing number of Indians - software developers, designers, writers, consultants, small exporters - that gap is the monthly arithmetic of working for clients abroad. The work is global. The banking, often, is not. And somewhere in the search for a cleaner way to get paid in dollars, one idea keeps surfacing: open a company in the United States.

Before the company, the bank transfer

Most people meet the problem long before they meet any solution. A foreign client wants to pay, and the choices come down to a direct wire into an Indian bank account, a platform such as PayPal, or one of the newer services - Wise, Payoneer and their rivals - that hand you account details in dollars, pounds or euros and convert to rupees afterwards.

Each route takes its cut. Old-style bank wires carry SWIFT charges and an exchange-rate margin that can quietly cost more than any fee printed on the statement. PayPal is widely accepted, and rarely the cheapest. The newer platforms are usually cheaper and faster, and most are set up to operate within the Reserve Bank of India’s framework, which generally treats money earned from overseas clients as the export of a service and expects the documentation to line up.

For a large share of freelancers, that is the entire story. Money arrives, the rate is bearable, an accountant files it as business income, and nothing more needs building. The complications begin only when a client, a platform, or a payment processor asks for something an Indian individual cannot easily produce: a registered US business.

Why a US entity enters the picture

Start with what the sales pitch leads with: how little it costs to begin. Forming the company is cheap - the state filing fee is as little as $35 in Montana and as much as $500 in Massachusetts, with the per-state figures collected by LLCBuddy and current as of 2026. That part is true. It is also the least interesting reason to form one; the reasons that matter have nothing to do with the filing fee.

Stripe is the clearest of them. It is an American payments company, and its smoothest path runs through US entities; founders building software, subscription products, or anything that bills customers automatically often find the going far easier with one. Some marketplaces and app stores work the same way, as do the kind of US clients who would rather pay a domestic vendor than wire money overseas. A US business bank account - frequently through a provider such as Mercury - tends to follow the company rather than the individual.

Content creators meet a milder version of the same thing. Income from advertising networks, app revenue, or sponsorships can land more cleanly when there’s a business to receive it, and a US entity sometimes simplifies the forms those platforms ask for. Sometimes - not always, and rarely as dramatically as a half-watched tutorial suggests.

None of this is exotic. An Indian resident can own a US limited liability company without a visa, without a US address of their own, and without ever boarding a flight - though, as the next section explains, doing so as a resident comes with rules of its own. The entity is real and, for the right business, it can remove friction that was there before.

What the company really costs

What it does not remove is cost - the part most first-time owners get wrong, because they look up a single number and stop reading.

The one-time filing fee is that single number. Per the same state-by-state data, most states sit between $50 and $200, with a national average near $130. Add a registered agent - required, since the company needs a US address to receive legal notices - and the door tends to open for somewhere between $200 and $400.

It is the second number that catches people out. A company has to be kept alive, and that depends entirely on where it was formed. Wyoming and New Mexico are popular with non-residents precisely because they ask for so little; New Mexico long asked for no recurring report at all, though under a revised LLC law that took effect in July 2024 it now requires one only once every three years. Delaware looks inexpensive to start, then comes with an annual tax that is currently $300. California is the cautionary tale - a business tied to the state can owe a minimum franchise tax, currently $800, every year, due whether it earned a rupee or not.

This is why someone bothers to compile the figures at all. Steve Goldstein, who runs LLCBuddy and verifies its state-by-state fee data against the Secretary of State filings themselves, publishes those numbers in one place - the kind of reference you can check against the state’s own records rather than a formation service’s marketing.

The part the tutorials skip - you are still in India

Those breezy how-to videos stop at the satisfying part. Two facts they skip can matter more than any filing fee.

The first is regulatory. Since 2022, the Reserve Bank of India’s rules on overseas investment have made it more involved for a resident to simply own a foreign company; on one reading, even paying to set one up can count as an overseas investment, with its own structuring and reporting requirements. Stripe itself tells Indian residents to get advice before using its incorporation product, for exactly this reason. The rules are not a wall. They are a reason to understand the route before money leaves the country.

There is also the Liberalised Remittance Scheme, which currently lets a resident send up to $250,000 abroad in a financial year - comfortably more than most will need, but a real ceiling worth keeping in view once funds begin moving in both directions.

Tax is the second fact, and the one that deflates the fantasy. Owning a US company does not move your tax home. Live in India, and India still expects to tax your income; a single-member US LLC is, by default, a pass-through under current US tax rules, which means the profit is yours - declared by you - no matter where the company’s bank account sits. Relief may be available when the same income is taxed in two places, through the credit provisions written into India’s tax treaties - but that turns on filing correctly, not on slipping the net. Anyone going down this road may want to run the numbers past a qualified chartered accountant or tax adviser before assuming a structure saves money; it may save none, and simply add a second set of returns to file.

So who is it for?

Strip away the excitement and the answer changes with the person.

For a founder building a software product that needs Stripe, sells to American customers, or hopes to raise money or be bought one day, a US entity is rarely a real choice - it is the cost of doing that particular kind of business, and the annual fees barely register against what is at stake.

For the freelancer with three overseas clients and a dependable run of dollar invoices, a US company is often more structure than the situation calls for. A reliable payment platform, a clean record of what came in, and an honest return cover the getting-paid problem on their own - though they do not, by themselves, create the liability separation a formal company can. A US LLC is not a badge. It is plumbing, and plumbing is only worth laying where there is water to carry.

The dollars are the easy part. The structure you build to catch them is the choice that costs you - and far more often than the internet admits, the honest answer is less than the tutorials are selling.

This article is for general information only and is not legal, tax, or financial advice. Fees, rules, and tax treatment vary by situation and change over time; verify current requirements with the relevant authority and consult a qualified professional before acting. LLCBuddy publishes LLC formation data and is not a law firm or a licensed tax or financial-advice service.

“This is a company press release that is not part of editorial content. No journalist of The Hindu was involved in the publication of this release.”