Indian Business Entity Owner? Register or Expand Your Company in the US
As per RBI & FEMA guidelines, it is mandatory for you to transfer your share capital value amount to the US entity that you register through ODI (Overseas Direct Investment) transfer. And this is mandatory, for Indian governing bodies to recognise your Indian person / entity as a shareholder in the US entity. But this is something Indian companies miss out on, in most cases.
Skipping the official ODI transfer can create a legal and financial minefield.
𝐇𝐞𝐫𝐞'𝐬 𝐰𝐡𝐲 𝐢𝐠𝐧𝐨𝐫𝐢𝐧𝐠 𝐎𝐃𝐈 𝐢𝐬 𝐚 𝐛𝐚𝐝 𝐢𝐝𝐞𝐚:
𝐍𝐨𝐧 𝐫𝐞𝐜𝐨𝐠𝐧𝐢𝐭𝐢𝐨𝐧: India regulatory bodies doesnt recognize your US entity leading to troubles when you go for funding / exit.
𝐏𝐞𝐧𝐚𝐥𝐭𝐢𝐞𝐬: Non-compliance with RBI rules triggers fines, penalties, or even business shutdown.
𝐅𝐮𝐧𝐝𝐢𝐧𝐠 𝐥𝐢𝐦𝐢𝐭𝐚𝐭𝐢𝐨𝐧𝐬: No proper ODI docs? No access to loans or credit to fuel your growth.
𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐝𝐮𝐞 𝐝𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞: Red flag during due diligence process of investment or M&A.