How to Open an E-commerce Business in the USA from India

An Indian founder can sell to customers in the United States without moving there. You can sell through a marketplace such as Amazon, through your own online store, or both, and run it through a US company that you form from India. This guide explains the business side of starting an e-commerce business in the USA from India: choosing the model, setting up the company, getting paid, handling sales tax and shipping, and avoiding the mistakes that cost sellers money. For the company itself, see our guide to registering a company in the USA from India.

Key takeaways

• You do not need to live in the US to run an e-commerce business there.
• A US LLC is the usual vehicle for a seller from India, and it can be formed online.
• Decide the model first: marketplace, your own store, dropshipping or holding inventory.
• Sales tax, US business tax and Indian tax rules all matter. Get advice before you scale.
• Money sent from India and money paid back to you follow India's foreign exchange rules.

Step 1: Choose how you will sell

• A marketplace (Amazon, Walmart, eBay, Etsy). You get an audience, and the marketplace handles checkout. You pay fees and follow its rules.
• Your own store (Shopify, WooCommerce). You own the customer and the brand, but you must find the customers yourself.
• Dropshipping. A supplier ships to the customer. You hold no stock, but margins are thin and delivery times are your problem.
• Private label or your own product. You hold stock in the US or ship from India. This takes the most money and the most care over product rules.

Step 2: Pick the product and check the rules

Some products need extra approval in the US: food, cosmetics, supplements, electronics, toys and anything for children. Marketplaces also restrict some categories. Check the rules for your product before you order stock. See the US Small Business Administration at sba.gov for official guidance on starting a business.

Step 3: Form the US company

Most sellers from India choose an LLC. It is simple, can be formed online, and gives a US name that marketplaces, payment platforms and banks understand. The steps are: choose a state, appoint a registered agent, file the formation document and get an EIN. We explain them in how to form a US LLC without visiting the US. You can start with our LLC formation for non-residents.

Step 4: Open a bank or payment account

You need the EIN first. Marketplaces and payment platforms ask for the company's name, EIN and your identity documents, and they check that every detail matches. Some founders also use an online business account. We have a tie-up with Payoneer, see Payoneer for a US LLC, but approval is decided by the provider. Our US business bank account page lists the options.

Step 5: Understand sales tax

US sales tax is set by each state, not by the federal government. On large marketplaces, the marketplace usually collects and pays the tax on your sales in most states. If you sell through your own store, you may have to register and collect tax in a state once your sales there pass that state's threshold. Many states set thresholds by sales value or number of orders. Check each state's rules and ask a US tax adviser when you start selling in more than one state.

Step 6: Understand business tax, in the US and in India

A foreign-owned LLC that only earns income from outside the US generally owes no US income tax, but an LLC that sells goods to US customers or holds US stock can have US-source business income, and may owe US tax and have to file a US return. A foreign-owned single-member LLC also files Form 5472 every year. In India, a resident generally reports the foreign company and may pay tax on the income. These rules are easy to get wrong, so speak to a US tax adviser and a chartered accountant. See US LLC tax filing.

Step 7: Plan shipping and returns

• Shipping from India means customs duties, longer delivery and a returns problem.
• Shipping from the US is faster for customers. You can use a US warehouse, a fulfilment service or the marketplace's own fulfilment.
• Decide who pays duties and how returns are handled before you promise delivery times.

Step 8: Send money to and from India properly

Money sent from India to start or fund the company, and money paid back to you, follow India's foreign exchange rules. Ask a chartered accountant what applies and how to document it, before you transfer anything. See the Reserve Bank of India at rbi.org.in.

Common mistakes

• Forming the company before choosing the selling model.
• Forgetting sales tax outside the marketplace.
• Names or addresses that differ across the LLC, the EIN and the marketplace account.
• Treating the LLC as tax-free without asking an adviser.
• Skipping the yearly filings.

Frequently asked questions

Can I sell on Amazon.com from India?

Yes. Many Indian sellers do. Amazon has its own identity and business checks, so have your company documents, bank account and identity ready. Check Amazon's current requirements.

Do I need a US company to sell to US customers?

Not always, but a US company makes banking, payments and marketplace approval easier, and it gives customers a US business to deal with.

Do I need a US address?

The LLC needs a registered agent with a street address in its state. Your warehouse or shipping address can be elsewhere. See do you need a US address to form an LLC.

Which state should I form the LLC in?

Any state works. Compare the formation and yearly costs on our LLC filing fees by state page.

Do I pay tax in India on sales to the US?

A resident of India generally reports foreign income and assets. How it is taxed depends on the facts, so ask a chartered accountant.

Ready to start?

We form the LLC, arrange the registered agent and EIN and keep up the yearly filings: register a company in the USA from India. See also how to register an e-commerce company in the USA. This is general information, not legal, tax or financial advice.