India, UAE and US structuring, tax residency and FEMA advisory

Cross-border structuring for founders across India, the UAE and the US is the design of where the holding company sits, how the operating companies beneath it connect, and the order each step is taken in. Every leg answers to a different rulebook: FEMA and the Income-tax Act 2025 in India, Delaware law and the Internal Revenue Code in the US, and the corporate tax law in the UAE. Infinilex designs and sequences the structure, and Infinilex counsel qualified in India, the UAE and the US sign those legs.

Three cross-border structures and the rules each leg is tested against

Schedule A: structures by jurisdiction leg, as at 12 September 2026
Structure	India leg	US leg	UAE leg	Where it goes wrong
Delaware parent, Indian subsidiary (the flip)	Swap under rule 9A of the NDI Rules, inserted 16 August 2024; founders acquire foreign shares under the OI Rules 2022; both legs comply with FEMA	Delaware corporation under DGCL section 101; the exchange tested against 26 U.S.C. 351 and the 80% control test in section 368(c)	Not engaged, unless the group is in fact managed and controlled from the UAE	Flipping late, mid-raise, with the FEMA history, IP or tax model unresolved
UAE holding company over Indian or US operating companies	Founders’ stake is ODI where it is unlisted equity or carries control; round-tripping is a structural test of no more than two layers of subsidiaries; residency under section 6(10)	A US person transferring property to a foreign corporation is analysed under 26 U.S.C. 367, separately from section 351	9% above AED 375,000, 0% up to it; Qualifying Free Zone Person status needs adequate substance; the participation exemption needs 5% or more, held or intended to be held for 12 uninterrupted months, a participation taxed at 9% or more in its home jurisdiction, and entitlement to at least 5% of profits and liquidation proceeds, under Article 23	A mailbox entity with no substance, while the decisions are still taken in India
Indian parent with foreign subsidiaries	ODI for bona fide business; Form FC and a UIN through the AD bank before the remittance; start-up ODI from internal accruals, not borrowed funds	A non-US parent can form a Delaware subsidiary; US filings and transfer pricing with the parent	Arm’s length pricing for related parties; master file and local file where thresholds are met	Intercompany services with no written agreement, so the transfer pricing report has nothing to stand on

Sources: OI Rules 2022; OI Directions 2022; NDI (Fourth Amendment) Rules 2024; Income-tax Act 2025; DGCL Title 8; 26 U.S.C. 351, 367, 368(c); Federal Decree-Law No. 47 of 2022, with the AED 375,000 band set by Cabinet Decision No. 116 of 2022 of 30 December 2022. A map of what gets tested, not a conclusion on any structure.

What cross-border structuring covers

The holding jurisdiction decision. Delaware, the UAE or India as the parent, chosen against the two-year path rather than today’s registration. A C-corp adds US filings and Delaware franchise tax, so we do not put one in place to sit dormant. Where a founder is weighing an LLC against a C-corp, the India tax and FEMA legs are compared on US LLC vs C-corp for Indian founders. See Delaware vs UAE vs India and the entity selection decision sheet.
The Delaware flip, and the reverse. The sequence that decides the cost: model the tax, clean the FEMA history, place the IP, paper the swap, then rebuild the ESOP pool, contracts and banking on top. Since August 2024, rule 9A of the NDI Rules allows equity of an Indian company to be transferred between a resident and a non-resident against a swap of a foreign company’s equity in compliance with the OI Rules 2022, with Government approval wherever applicable. The walkthrough is the Delaware flip from India. Who signs each filing is on Delaware flip advisory, the official fees and gating items on what a flip costs and how long it takes, and the route back on the reverse flip to India.
FEMA on every leg, including the founders’ own. Inbound, the swap, pricing and reporting on the Indian company. Outbound, each resident founder holding foreign shares is making an overseas investment. A resident individual’s ODI goes into an operating foreign entity not in financial services and, where the individual has control, one without a subsidiary or step-down subsidiary, which is why a founder-held foreign parent with an operating subsidiary under it is diligenced on the founders’ own facts before the swap is papered; transfers between residents and non-residents are priced at arm’s length. The filings are set out in LRS vs ODI for Indian founders.
Tax residency and substance. An entity is resident where it is really run. India tests place of effective management under section 6(10) of the Income-tax Act 2025 (formerly section 6(3) of the 1961 Act), alongside CBDT Circular No. 6/2017 of 24 January 2017, Guiding Principles for determination of Place of Effective Management (POEM) of a Company. The UAE treats a foreign company effectively managed and controlled there as resident on worldwide income, and a Qualifying Free Zone Person that fails its substance, qualifying income or transfer pricing conditions loses the status from the start of that tax period. The company-level tests are worked through in Dubai company run from India: POEM, UAE residency and QFZP substance, and the founder's own move in Indian founder moving to Dubai.
Intercompany agreements and transfer pricing. Services, IP licences and cost recharges between the Indian subsidiary and its US or UAE affiliate are international transactions under section 163, reported in Form 48 (formerly 3CEB) under section 172, with a penalty of Rs 1,00,000 under section 447 for failing to furnish it. The UAE applies the arm’s length standard to related parties linked by 50% or more ownership or control, and, where the Ministerial thresholds are met, requires a master file and local file, to be produced within 30 days of a request. The five agreements a flipped group papers, and how each jurisdiction prices them, are on intercompany agreements and transfer pricing after the flip.
Exit and the indirect transfer test. A share of a foreign holding company is deemed situated in India where, on the specified date, the value of its Indian assets exceeds Rs 10 crore and is at least 50% of the value of all its assets, under section 9(10) of the Income-tax Act 2025. That test belongs in the structure from day one, not in a buyer’s diligence.
The UAE holding company. Zone selection matched to activity, banking and substance, set up as part of the group rather than beside it. Where financial services is in the plan, an Indian entity not itself in financial services may make ODI into a foreign financial services entity, other than banking or insurance, only after net profits in the preceding three financial years. The zones are compared in DMCC vs ADGM vs IFZA from India.

“With their presence in both the US and India, Infinilex provides Indian founders with US-incorporated entities seamless guidance through the complex maze of compliance requirements.”

Gaurav Luhariwala · Founder & CEO, TejasAI

How a structuring engagement is staged

Fixed-scope stages, mapped on a free 30-minute discovery call with the founder.

Structure and tax model. The target structure, the alternatives we rejected and why, and the tax cost modelled on both sides of the border. You can stop here with a decision you understand.
Clean-up. Past FEMA filings, pricing documentation and IP assignments brought current. When the cap table is clean this is short; when it is not, remediation comes first.
Execution. Incorporation, the swap or subscription documents, the India-side filings and the founders’ overseas investment compliance, in the agreed order.
Run the structure. Intercompany agreements, the annual reports each leg generates and board process that keeps residency where the structure says it is, as a fixed project or on the fractional general counsel retainer.

The scope note, the project or retainer choice and the fee are set out on how engagements work.

Who signs what on each leg

Infinilex is a consultancy. Design, sequencing and drafting are our work, and Infinilex counsel qualified in India, the UAE and the US sign those legs, with Infinilex’s company secretary or chartered accountant where a statute names that professional. Filings a statute reserves to the company or the investor stay with them. For any other jurisdiction, Infinilex scopes the work, builds the fact record and briefs the local counsel who sign, brought into the engagement explicitly and named to you before they act.

Schedule B: structuring workstreams and who signs
Workstream	Who signs or certifies	Infinilex’s role
Indian share swap, approvals and FEMA filings	Infinilex advocate enrolled in India or Infinilex’s company secretary; the company or investor files through its AD bank	Sequencing, drafting, filing coordination
Founders’ overseas investment: Form FC, UIN, Annual Performance Report	The resident investor through the AD bank; the APR is certified by Infinilex’s chartered accountant where statutory audit does not apply	Route analysis, pack preparation, calendar
Form 48 (formerly 3CEB) on intercompany transactions	Infinilex’s chartered accountant	Intercompany agreements, inputs, coordination
Delaware incorporation and the share exchange documents	Infinilex counsel admitted in the US	Coordination with the India and UAE legs
US tax analysis under sections 351 and 367	Infinilex counsel admitted in the US	Structure brief, coordination with the India-side tax model
ADGM or DIFC entity documents	Infinilex counsel qualified for ADGM or DIFC	Structure brief, coordination
UAE corporate tax registration and transfer pricing file	The taxable person	Substance design, related-party documentation

How to choose a cross-border structuring advisor

Most founders across the India, UAE and US corridor assemble three separate advisers and own the gaps between them. Six questions separate an adviser who can carry the whole structure from one who can carry a leg. They are written to be asked of anyone, including us.

Schedule C: what to ask an India, UAE and US holding structure consultant
What to ask	Why it decides the answer	What a weak answer sounds like
Who runs the other two legs, and are they inside the engagement or a referral?	A structure fails at the joins, not inside one country	“We will introduce you to someone in Dubai.”
Is the founders’ own FEMA position in scope, or only the company’s?	Each resident founder holding foreign shares is making an overseas investment in their own name	Only the company’s inbound filings are quoted
Is the tax cost of the swap modelled on both sides before the structure is chosen?	A share swap is a transfer even where no cash changes hands	“It is usually tax neutral.”
Who signs each document and filing, and are they named before they act?	The India, US and UAE legs each need professionals licensed in that jurisdiction	The signing professional first appears on the invoice, not in the plan
Is the sequence written down, and is the scope fixed before work starts?	Order decides cost: the tax model, FEMA clean-up and IP placement come before papering	The plan is a list of deliverables with no order and an open scope
Does the scope include running the structure, or does it stop at incorporation?	Residency, substance and transfer pricing are annual obligations, not a one-off filing	Delivery ends at the certificate of incorporation

Frequently asked questions

What does cross-border structuring cover for a company across India, the UAE and the US?

Where the holding company sits, how the operating companies hang beneath it, and the order the pieces are built in. That means the holding jurisdiction decision, the Delaware flip or a UAE holding company, FEMA on every leg including the founders' own overseas investment, tax residency and substance, intercompany agreements and transfer pricing, and where the IP sits. Infinilex designs and sequences the structure, and Infinilex counsel qualified in India, the UAE and the US sign those legs.

Should an Indian startup flip to Delaware or set up a UAE holding company?

It depends on where customers, investors and revenue actually sit, and the choice is made against the two-year path rather than today's registration. In an engagement the tax cost of any share swap is modelled on both sides of the border, the founders' own FEMA position is diligenced, and the substance the structure needs is designed before a jurisdiction is picked, so the decision is a modelled one and not an assumption. The jurisdiction-by-jurisdiction comparison sits on the holding company cornerstone.

Can a company incorporated in Delaware or the UAE still be treated as tax resident in India?

It can be. Under section 6(10) of the Income-tax Act 2025 a company is resident in India if its place of effective management is in India, meaning where key management and commercial decisions for the business as a whole are, in substance, made. The UAE applies the same idea in the other direction: a foreign company effectively managed and controlled in the UAE is resident there for corporate tax. Where the board actually decides things is part of the structure, and it is reviewed on your own facts.

Which FEMA route applies when the parent is in the UAE rather than the US?

The route is set by what the founder acquires, not by which country the parent sits in. Unlisted foreign equity, 10% or more of a listed foreign entity, or any stake with control is overseas direct investment under the Overseas Investment Rules 2022, whether the parent is a Delaware corporation or a UAE free zone company. A resident individual's ODI must go into an operating foreign entity outside financial services and, where the individual has control, one with no subsidiary or step-down subsidiary, which is the condition a founder-held holding company with operating subsidiaries beneath it is tested against.

Who signs the documents in a cross-border structuring engagement?

Infinilex is a consultancy, and Infinilex counsel qualified in that jurisdiction sign the India, US and UAE legs. On the India leg that is an advocate enrolled in India, with Infinilex's company secretary or chartered accountant where a statute names that professional, such as the chartered accountant's certificate on the Annual Performance Report; on the US leg, a US-admitted lawyer for the Delaware corporate documents and the tax analysis of a share exchange; and where an ADGM or DIFC entity is involved, Infinilex counsel qualified for that regulator. Statutory signatories stay as the statute names them: the company or the resident investor files Form FC and the APR through the AD bank. For any other jurisdiction, local counsel qualified there sign, brought into the engagement explicitly and named to you before they act.

Next step

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Cross-border structuring, tax residency and FEMA across India, the UAE and the US.