RBI ODI Rules 2022 Compliant
Atlas, Firstbase & Doola
Don't Work for
Indian Founders.
StartEase Does.
Built for Indian Founders
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Everything you need to establish and operate your US business from India
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The Hidden Cost of "Cheap" Platforms
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Why Indian Founders Switch to StartEase
Personal Attention
Unlike ticket-based support, get direct access to compliance experts who understand your unique situation.
Compliance Confidence
Sleep soundly knowing your India-US operations are fully compliant with both jurisdictions.
Ongoing Support
Expert guidance on US & India tax filings, foreign tax credit claims for proper compliance in both countries, RBI/FEMA reporting, transfer pricing, tax treaty provisions, and cross-border compliance - expertise no other US platform possesses.
Why US Platforms Don't Work for Indian Founders Anymore
In 2022, RBI released comprehensive ODI regulations that fundamentally changed how Indian residents can invest in foreign entities. Atlas, Firstbase, Doola, and similar platforms simply weren’t designed with these requirements in mind.
Payment Violations
Under ODI 2022, even paying Atlas/Firstbase/Doola incorporation fees could be considered overseas direct investment requiring prior RBI approval.
US Platforms Reality
US platforms like Atlas, Firstbase, and Doola aren’t designed for Indian residents. They ignore Form ODI, APR/FLA reporting, and FEMA compliance requirements.
Complex Structuring
ODI regulations require specific corporate structures that differ significantly from standard US incorporation approaches used by these platforms.
Legal Counsel Required
RBI strongly recommends working with attorneys familiar with ODI regulations—something US-only platforms cannot provide.
Official RBI Guidance (2022)
"Complying with ODI regulations is complex and often requires a corporate structure that differs from the structure used in Atlas.
It's important to note that under the ODI regulations, even paying the fee to incorporate a US company could be considered an overseas direct investment."
"RBI Recommendation: "If you or one of your co-founders reside in India, we strongly encourage you to work with an attorney familiar with ODI regulations."
Real Founder Story
"We used Firstbase thinking it was the same as Atlas. Got an RBI notice 18 months later for non-compliant ODI structure.
Had to restructure everything, pay penalties, and nearly lost our Series A.
The legal fees alone were ₹25 lakhs. These platforms just don't understand Indian law."
— Seaml Fintech Founder, Mumbai
Avoid Costly Penalties
The IRS and state tax authorities impose significant penalties for failing to file or pay taxes on time. Stay compliant to avoid these unnecessary costs.
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Instant email alerts for all legal documents and notices
Automated Compliance Tracking
We track deadlines and send email reminders to stay compliant
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Specialized service designed for Indian founders expanding to US
What's a registered agent?
Registered agents act as a company's official point of contact. Their job is to receive tax forms, legal notices, and other key documents from the state. All 50 states require businesses to appoint a registered agent.
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Co-founder, TechStart
Get ODI-Compliant US Expansion Strategy
30-minute consultation with our CA-ODI expert to review your situation, explain 2022 regulations, and design your compliant expansion roadmap. Plus get our comprehensive ODI founder report.
CA-ODI Expert Call
Direct consultation with our Chartered Accountant who specializes in ODI Rules 2022, FEMA compliance, and US-India tax structures.
Compliance Clarity
Understand exactly why Atlas/Firstbase/Doola don't work for Indians, what ODI compliance means, and legal ways to pay incorporation fees.
Custom Roadmap
Get a personalized compliance roadmap with timelines, costs, and step-by-step guidance for your specific business model and expansion goals.
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Streamline the process of employee relocation and visa sponsorship.
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Expert contract review and legal compliance guidance for your business operations.
- Employment and contractor agreement review ($200-$500).
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Benefits
Why Choose Our Virtual CFO Services
Partner with us to transform your cross-border financial operations and unlock new levels of efficiency, compliance, and strategic insight.
Reduced Compliance Risk
Minimize the risk of regulatory penalties and reputational damage through proactive compliance management.
Tax Optimization
Strategic planning to minimize tax liabilities while maintaining full compliance with US and Indian tax regulations.
Enhanced Financial Visibility
Gain clear insights into your cross-border financial operations with comprehensive reporting and analysis.
Cost Efficiency
Reduce operational costs through outsourced expertise, eliminating the need for in-house cross-border financial specialists.
Strategic Financial Planning
Expert guidance on cross-border investment, expansion, and financial structuring decisions.
Time Savings
Focus on your core business while our experts handle the complexities of cross-border financial compliance.
Founder's Guide
Going Global? Here's What You Need to Know
Simple explanations of ODI and FDI for Indian founders expanding to US, UK, UAE, or Singapore
ODI (Outward Direct Investment)
What it means:
When you (Indian resident) invest money to start or buy a company abroad
Example:
You invest ₹50 lakhs to start a Delaware C-Corp in the US
Can't Invest Directly as Individual
You must invest through an Indian LLP or Company structure - direct personal investment is not allowed
LLP Required for Reinvestment
If your foreign company will reinvest back into India, you MUST use LLP structure (not Pvt Ltd) for ODI
Investment Limits
Automatic route: Up to $1M per year. Above $1M needs RBI approval
Minimum Indian Holding
Your Indian entity must hold minimum 10% in the foreign company to qualify as ODI
FDI (Foreign Direct Investment)
What it means:
When your foreign company invests money back into India
Example:
Your US company invests $100K into your Indian subsidiary
30-Day Reporting Rule
Must file FC-GPR/FC-TRS within 30 days of investment - no exceptions
Automatic vs Approval Route
Most sectors allow 100% FDI on automatic route. Some need government approval
Sectoral Caps Apply
E-commerce (marketplace): 100%, Banking: 74%, Insurance: 74%, Defense: 74%
Round-tripping Rules
Your foreign company investing back is considered "round-tripping" - special compliance needed
Frequently Asked Questions
Common Founder Misconceptions, Myth
"My US Friend Paid. I Didn't Violate FEMA."
Even if a friend or US-based co-founder made the payment, if you own the company, the RBI considers you the beneficiary.
📌 Rule 6(1), ODI Rules, 2022: The resident individual making or holding an investment abroad must comply with RBI procedures.
Therefore, even if you did not personally swipe the card, if you own the LLC or C-Corp, you are held responsible under FEMA.
Using Credit Cards to Form Foreign Entities is a Violation?
Regulation 3(1), FEMA ODI Regulations, 2022:
All investments must be routed through an Authorised Dealer (AD) Bank in India.
If you used a personal credit card, Wise, PayPal, or direct USD payment to pay for incorporation services (e.g., to a US lawyer or incorporation platform), you violated RBI’s rules. Even if it’s just $100.
Will I pay taxes in India on income earned through my US LLC?
Yes – you may have to, depending on how you receive the money.
💡 The US LLC (if taxed as a pass-through entity) will not pay corporate tax in the US. Its profits pass to you directly as the member.
📌 So, as a resident Indian, your global income is taxable in India under the Income Tax Act, 1961
- If you draw salary/dividends or leave profits unremitted, it may still be taxable
- If you repatriate profits to India, it must be declared in your Indian income tax return (ITR)
📌 Note: Non-disclosure of foreign income and assets may attract action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
ODI Is Not Just About "Investment" – It's About Ownership, Intention, and Control
RBI looks at:
📌 Who owns/controls the foreign entity?
📌 Was the investment routed properly?
📌 Did you report the investment (Form ODI)?
If the answer is no, then even $1 of ownership is a violation.
"I paid my US company incorporation fees via credit card. What's the issue?"
🔍 The Problem: That’s a violation under FEMA because overseas investment by an Indian resident must be routed through an Authorised Dealer (AD) bank, not via personal credit card, Wise, or PayPal.
Legal Reference:
- Regulation 3(1), FEMA (Overseas Investment) Regulations, 2022
- Rule 3(3), OI Rules, 2022
- Para 2(vi), Schedule III of OI Rules, 2022 — All financial commitments must be routed through AD Bank
- RBI Notification: RBI/2022-2023/98 A.P. (DIR Series) Circular No. 10 dated August 22, 2022
"My friend paid for me. I didn't directly remit funds abroad."
❌ Still a violation. FEMA does not allow third-party payments for capital account transactions like ODI. Even if someone else paid on your behalf, you’re considered the beneficial owner and responsible for regulatory compliance.
📌 Rule 3(5), OI Rules, 2022: Resident must make investment from own funds under LRS or ODI—not third-party funds.
"But I didn't invest money in the US LLC. It's just a structure, not an actual investment."
Still considered ODI.
If you own the LLC, hold control, and have created the entity to operate or hold assets, it is classified as ODI under FEMA—even if you didn’t contribute money immediately.
📌 [Rule 2(h), OI Rules, 2022](https://www.taxmann.com/post/blog/overseas-direct-investment-odi-under-fema#:~:text=– – The restriction of limited liability,%2C limited liability partnership%2C etc.) – “Overseas Investment” includes even initial subscription or control over a foreign entity. Holding control or ownership is enough to trigger ODI compliance. Para 2(i), Schedule III – Investment can be in capital or other forms including membership interest (LLC).
Resources to Verify Rule 2(h), OI Rules, 2022 and Para 2(i), Schedule III
❌ Incorrect. FEMA recognizes **any form of ownership**—not just shares. **Membership interests** in an LLC are considered "equity capital" for ODI.
📌 **Clarified under Rule 2(h), Rule 6, and Schedule III of the OI Rules, 2022** RBI circular and notifications accept **membership certificates in place of share certificates** for LLCs.
"LLC doesn't issue shares, so FEMA shouldn't apply."
❌ Incorrect. FEMA recognizes any form of ownership—not just shares. Membership interests in an LLC are considered “equity capital” for ODI.
📌 Clarified under Rule 2(h), Rule 6, and Schedule III of the OI Rules, 2022 RBI circular and notifications accept membership certificates in place of share certificates for LLCs.
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