Opening a US subsidiary for an Indian D2C brand
An Indian direct-to-consumer brand wanted to sell in the US. We planned the US company and the Indian approvals as a single project.
An Indian consumer brand wanted to sell directly to customers in the US. Its US advisers could form a company in days. Nobody had checked what the Indian side would need first.
Putting money into an overseas company follows rules under FEMA on how much, in what form and how it is reported.
What we did
- Step 1
Plan the structure and the funding
We decided the US entity type, how much equity and how much loan funding it needed, and how each would be reported in India.
- Step 2
Prepare the Indian approvals and filings
We prepared the outbound investment documents for the authorised bank and the reporting that follows, so money could leave India lawfully.
- Step 3
Match the US set-up to the Indian plan
We worked with US counsel so share issuance, bank accounts and state registrations matched what had been filed in India.
- Step 4
Set up the yearly reporting
We listed the annual reporting the Indian company owes for its overseas subsidiary and put it on a calendar.
One plan, so the money and the paperwork moved together.
The funds went to the US company only after the approvals were in place. The US shares were issued to match the filings made in India.
The brand had a yearly checklist, so overseas reporting did not become a problem two years later.
A lawful route for the money
Funding was sized and reported under the outbound investment rules.
Matching records
The US share records and the Indian filings told the same story.
A yearly checklist
The reporting owed in India for the US company was on a calendar.
Most outbound-investment problems start with a company formed first and reported later. Sequence the two together.
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