Incorporation · Early Stage Company Development

Do we need approval from RBI- India to setup a wholly owned subsidiary in USA?

Vinod Shintre I help companies with Cloud/DevOps, BigData/Analytics, UX & Mobile technology

April 3rd, 2016

HI, I am exploring incorporating a wholly owned subsidiary in USA for my India registered entity as parent company, do we need any RBI approval in doing so. Setting up a USA entity is straight forward but just wanted to make sure we understand all aspects of it.

normally people do the reverse but we need to expand in USA markets for an existing profitable business in India & hence the question.

Girish Savadatti Co-founder at Instafeez, A Fintech company

April 3rd, 2016

to set up US wholly subsidiary may not necessary require RBI nod of approval however if you want to make Indian entity as parent then certain declarations may needed to RBI. You might want to check with CA firm who has experience in such transactions.

Rafeeq CE Head of Technology

April 3rd, 2016

As far as I know, you do not require RBI approval to setup a subsidiary LLC or corp in USA (We attempted to setup one, did not go ahead as our startup failed in India itself ;-)). I see that yours is a ride sharing platform, is the sole intention of setting up LLC to have a US Bank account? Or are you planning to setup office etc. in US?

Vinod Shintre I help companies with Cloud/DevOps, BigData/Analytics, UX & Mobile technology

April 3rd, 2016

thanks Girish, Rafeeq

Vinod Shintre I help companies with Cloud/DevOps, BigData/Analytics, UX & Mobile technology

April 3rd, 2016

Yes, we are keeping the Indian entity as parent & create a wholly owned sub incorporated in USA for various reasons. Sure let me dig further into this & see how this can be achieved keeping all compliance in check.
Most companies do the other way around given the stage they are at & we feel keeping Indian as parent makes sense for us.