Guide to Transfer Paid-Up Capital from India to US via ODI

Step-by-Step Process

Step 1: Decide Investment Structure

Determine whether the Indian entity or individual is setting up a Wholly Owned Subsidiary (WOS) or entering into a Joint Venture (JV) in the US. Confirm that the US LLC is engaged in a bonafide business activity, not prohibited by Indian regulations.

Step 2: Check Eligibility Under FEMA & ODI Rules

For Individuals (Under Liberalised Remittance Scheme – LRS):

• Can invest up to USD 250,000 per financial year per person.
• Must be an Indian resident under FEMA.

For Indian Companies:

• Can invest up to 400% of their Net Worth as per their latest audited balance sheet.
• Need to comply with ODI norms under FEMA, 1999 and RBI guidelines.

Step 3: Open a Bank Account with Authorized Dealer (AD Bank)

An Authorized Dealer Category-I Bank (e.g., HDFC, ICICI, SBI) will facilitate the ODI process. Choose a bank where the Indian party has an account.

Step 4: Prepare Required Documents

For Indian Individual Investor:

• PAN Card & Aadhaar
• Passport
• Form A2 (declaration under FEMA)
• LRS Declaration form
• Purpose Code (Investment purpose)
• Copy of US LLC Certificate of Incorporation
• Operating Agreement of the LLC
• Valuation report (if required)

For Indian Company Investor:

• Board Resolution authorizing investment
• Latest Audited Financials
• Valuation certificate (if acquiring an existing entity)
• ODI Forms (Form FC, Form ODI Part I and II)
• Letter of Intent or incorporation documents of US LLC
• KYC of the Authorized Signatory

Step 5: File Form FC and Form ODI with AD Bank

From October 2022, under new ODI rules:
– File Form FC (Foreign Currency) – for the mode of investment and financial commitment.
– File Form ODI Part I – initial investment details.
– Bank will perform KYC and submit to RBI via FIRMS Portal (Foreign Investment Reporting and Management System).

Step 6: Remit Funds Through Authorized Dealer Bank

Once documents are verified, the bank will process the foreign remittance. Funds will be transferred to the US bank account of the Wyoming LLC as paid-up capital.

Step 7: Post-Investment Compliance

• File Annual Performance Report (APR) every year by December 31.
• Update changes in shareholding, address, capital, etc., via FIRMS portal.
• If disinvestment occurs, file Form ODI Part II.

Summary Checklist