<aside> 💡 Handbook for US - Indian founders

https://app.inkle.io/handbook

</aside>

• Why should you incorporate in India?
  • Access to global VCs
  • Increased valuations
  • US presence, if required (to collect payments or to do business)
  • And more…but it depends on your use case.
• Is an Indian subsidiary necessary?
  • If you are doing business or operating in India, you might be applicable for service permanent establishment.
  • The Indian subsidiary shields the US parent from being applicable for service PE.
  • ESOPs from the US entity cannot be issued to the Indian entity’s employees.
• How do you link the Indian entity with the US entity?
  • The US entity will need to buy the Indian entity at a very low value.
  • If the Indian entity has a lot of business, then it is suggested to shut down the Indian entity and begin an LLP.
• Intellectual Property
  • Transferring the IP to the US entity will offer more protection as compared to IP in the Indian entity, given that your product/service is global and not India-specific.
  • The subsidiary must also pay royalty for use of IP and draft intercompany agreements.
• Board meetings in the US
  • Twice in a year
• US bookkeeping
  • No legal requirement to do it monthly per se.
  • However it is suggested to do monthly bookkeeping to keep a good record of expenses and stay up-to-date.
  • It is required to file your annual federal taxes and compliances.
  • Investors may sometimes demand too see books.
• 409A Valuation
  • It is only recognized by the US government, not by the Indian government.
  • Hence it is required only if you have a US employee, advisor or director with equity.
  • Sometimes an investor might demand one.
  • It is not required if an Indian employee has vested their ESOPs.
• Why Delaware C-Corps?
  • Delaware courts protect entities with IP protection law, corporate law etc.
  • Also, Delaware has no sales tax.
• Renaming the company type
  • You can change to Inc or something else easily.
  • However it is not suggested as every database would have stored the previous company type.

<aside> 💡 About Inkle

</aside>