How to Register a Delaware C Corporation

A structured approach to registering a Delaware C Corporation for founders with different financial arrangements, including options with foreign sourced funds and alternatives for those without.

Optimal Route for Founders with Foreign Sourced Funds

For founders with funds outside India (e.g., in the UAE), this is the most streamlined method.

Steps:

1. Use foreign funds to purchase shares in the Delaware C Corporation.

2. Avoid ties to any Indian financial or regulatory system.

Advantages: Simple compliance with no need for Indian entity registration.

Timeline: Approximately 1 month.

Cost: Around $5,000, depending on the law firm.

Recommendation: Avoid using services like Stripe Atlas; consult a law firm for efficient handling.

Flip Structure

Suitable for founders without foreign funds, widely used by Indian founders.

Steps:

1. Establish an Indian company.

2. Create a US entity.

3. Flip ownership so that the US entity holds 99.99% of the Indian company.

Requirements:

1. Draft a service agreement between the Indian and US entities.

2. Transfer intellectual property to the US entity.

3. Comply with both Indian and US regulations.

Timeline: Approximately 3-4 months.

Cost: Around $20,000, depending on legal fees.

RFCA Route

Similar to the foreign funds route but involves setting up a Resident Foreign Currency Account (RFCA). Ideal for Indian residents investing in a US entity.

Direct Ownership through ODI

Direct purchase of shares in the US entity by founders through Overseas Direct Investment (ODI). US entity can only hold less than 10% of the Indian entity, limiting control.

Registered Partnership (RP) Structure

Form an RP in India, which then buys shares in the US entity, allowing the US entity to own 99.99% of the Indian company. While setup is quick, this option has complex tax implications upon exit.

LLP Structure

Similar to RP but uses a Limited Liability Partnership (LLP) in India. Highest setup cost and time requirement, with intricate tax liabilities during exit.