Doing business with international partners

Asked almost 2 years ago - Spring, TX

Hi,

I'm in USA and I would like to open a firm with my International partners. My other two partners are in India and we are planning to start a IT firm in USA very soon.

I will be a primary person in USA and I will be managing all the legal matters here as needed. But problem is how do I make them partners since they are in India? As we share profits, how do I sent them? and how do I continue doing business with my partners. They have their company in India and we are planning to marge two company. I will take care of US company with different name and they will take care of their company with their existing name. I would like to incorporate both companies and share profit as we earn equally.

I would appreciate any legal guidance I can get from all experts.


Thank you

Attorney answers (6)

  1. Pradnya Pradhan Desh

    Pro

    Contributor Level 10

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    Answered . You would do this through equal ownership of the shares of each company. Your Indian "partners" are permitted to own shares of the US company. Your allowed percentage ownership of the Indian company depends on the foreign ownership rules that India imposes on each sector, and whether you are an NRI. Then you will have to decide the most favorable relationship between the two entities, and decide on operating procedures partly driven by US and Indian tax laws. The initial steps can get complicated, and missteps in US-India business structures can be very costly. I advise that you work with a law firm that is experienced at handling US-India business matters.

    Our firm regularly advises companies on such matters, and maintains an Of Counsel in New Delhi on our staff. If you would like to discuss this further with me, please send me an email.

    Nothing in this post should be construed as legal advice or as creating an attorney-client relationship.  Do not... more
  2. Jose Antonio Moreno

    Contributor Level 15

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    Answered . A good idea would be to consult and hire an immigration attorney after a plan has been mapped out as to your needs.

  3. F. J. Capriotti III

    Contributor Level 20

    7

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    Answered . Although Mr. Moreno gave good advice from an immigration standpoint ... I have a different perspective here ...... you didn't mention anything about your status, nor whether or not your partners have any desire to come to the US.

    Thus, as a purely business matter, you need to look at international banking, taxation and other issues ... meet with an international business attorney.

    PROFESSOR OF IMMIGRATION LAW for over 10 years -- This blog posting is offered for informational purposes only. It... more
  4. Luca Cristiano Maria Melchionna

    Contributor Level 16

    6

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    Answered . All counsels gave you correct advice. I would add he following. You can certainly form a firm here in the US. Firs you need to determine whether a pass through entity of not. Then you need to determine the state of incorporation. This is relevant under many aspects. You need to ask yourself who will be your customers? Where your services will be sold? Legal and tax consequences derive from this determination. Then you say 'I will be managing all the legal matters here as needed': unless you are an attorney trained and licensed here in the US, I do not see how can you do this. Then, if you are, my second question is why then are you posting this question? I understand that probably you need guidance.
    From your second question it seems you lack knowledge of the mechanics. Once you form your US company you need to decide whether you want to participate personally or through your Indian company. The decision is important and has legal and tax consequences. Moreover, remitting income overseas has a special procedure. Sending dividend overseas or taking accounts of losses is another very delicate task. My recommendation is to avoid to engage in self help and work with an attorney and CPA with knowledge in this complex field. Good luck.

    This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given... more
  5. Joanne Reisman

    Contributor Level 16

    5

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    Answered . You are free to do business with whoever you want but you are treading on matters that involve both domestic business law in the state you do your business and possibly international law. Consult with an experienced business law attorney in Texas. I don't know why you want this international partnership but my experience most people do these things because they want the other partners to invest money. Sometimes it is better to forgo the money and keep you business independent. Discuss all aspects of this venture with an attorney. Any time you rely on the money of others for your business you risk a takeover in the future which ousts you completely. http://www.portlandlegalservices.com/

    The comments by this author to questions posted on Avvo are designed to foster a general understanding of what... more
  6. Todd Matthew Heine

    Contributor Level 13

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    Answered . Good answers here. My high-level issues would surround this like:
    - Does a partnership make good business sense?
    - What risk are you willing to take for legal liability (here and in India)?
    - What are your revenue and income projections (here and in India)?
    - What tax advantages are you interested in getting?
    - What is your pricing and payment structure, if any, between you and your partner.

    As the answers above indicate, you have several attorneys that you can chat with for free consultations on your question. This will give you broader knowledge of your options.

    So reach out and get those consultations!

    Total Mobility Law is an international law firm that lets companies do global business with the knowledge and... more

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