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How can a India based private equity company incorporate a private equity fund in USA?

Indio, CA |

Are there any legal hurdles. Forming LLC is the best solution? Please advise.

Attorney Answers 2

Posted

Forming a company (either an LLC or a Corp) seems a simple solution. However, behind this answer there are several issues that a private equity firm should carefully evaluate in advance. In your case, it seems that not only asset protection is the key but also a careful analysis of the cross border tax repercussions. I would strongly suggest to work with an international tax firm. Feel free to contact us. Best,

This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than an educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the undisclosed individual asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of New York. Responses are based solely on New York Law unless stated otherwise. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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Posted

You've asked a good question. Many India-sourced funds are setting up in the US. Depending on your investment sources, a US company can provide an attractive investment vehicle.

Generally, we prefer corporations for several reasons. That said, the LLC is appropriate for many investing activities. The LP works well for some cross-border investments.

Some questions I would ask a potential client would include:

- How do you plan to invest the funds?
- How will you distribute profits?
- Where are your investors? How many?
- What kind of returns are you projecting?
- Where are your prospective investments?
- What personnel do you have in the US?
- How involved will your investment company be in the investment activities?

Te answers to these questions would make for a useful consultation. In most cross-border situations, US-India investors will want to use a third jurisdiction to hold profits and reduce overall tax burdens.

Portage Bay Law PLL is an international law firm that give companies doing global business the knowledge and confidence they need to comply in any country. Our answers on this site do not constitute legal advice, nor do they establish an attorney-client relationship. The only thing that can do that is a signed Engagement Letter and Fee Agreement, which you can get by contacting us through www.portagebaylaw.com.

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