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,
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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.
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