How to Transfer Money from US LLC to India: Methods, Purpose Codes & Tax (2027)

You have a US LLC, clients are paying it, and the dollars are sitting in Mercury or Wise. Now you want to transfer money from US LLC to India. The transfer itself takes minutes. The part most founders get wrong is the label on that money, because it decides your FEMA obligations, your GST position and what your bank asks for.

> Quick answer > > - There are two legal routes: take the LLC's profit as its owner, or invoice your LLC for services you provide from India. > - Each route uses a different RBI purpose code and carries different compliance obligations. Pick one route and use it consistently. > - Send USD by wire, or use a platform such as Wise or Payoneer, and always keep the FIRA (proof of inward remittance) for every transfer. > - Moving the money does not create a new tax by itself. If you are an Indian resident, you report the LLC's income in India either way.

New to this? Start with our guide on US LLCs for Indian residents, which covers what you must report in India.

Two Ways to Transfer Money from US LLC to India

The money in your LLC account belongs to the LLC, not to you. To move it to your Indian account legally, the transfer must have a reason, and that reason must match the purpose code your Indian bank records.

Route 1: Take the profit as the owner

The LLC pays its profit to you, its owner. Under FEMA, your LLC is an overseas investment (ODI), so this money is a return on that investment.

• Purpose code: usually P1406 (repatriation of profits to India). P1407 (receipt of dividends) is used for dividends from an overseas company. Banks differ on which code they apply to an LLC distribution, so confirm with yours (RBI purpose code list).
• FEMA rule: Under the Overseas Investment Regulations, 2022, a resident who has made an ODI must bring dues receivable from the foreign entity back to India within 90 days of them falling due (source).
• Reporting: The amounts you repatriate are shown in your Annual Performance Report (APR), due by December 31 each year. See our ODI compliance guide.
• GST: None. A profit distribution is not a supply of services.

Route 2: Invoice your LLC for your services

You, or your Indian proprietorship or LLP, do the actual work from India and bill the LLC for it. The LLC pays your invoice. In India, this is export of services.

• Purpose code: a services code that matches your work, for example P0802 (software consultancy) or P1006 (business and management consultancy).
• FEMA rule: Export proceeds must be realised within 15 months of the export. The RBI extended this from 9 months in November 2025 (source).
• GST: If you are GST-registered, file a Letter of Undertaking (LUT) every financial year and raise 0% export invoices.
• Pricing: The LLC is your own related party, so charge a fair, arm's-length fee and keep a simple service agreement.

Which route should you use?

Most solo founders with a single-member LLC use Route 1. Route 2 suits founders who already have an Indian business doing the delivery work. Whichever you pick, don't switch between them at random. A bank sees the same flow labelled two different ways and starts asking questions.

Ways to Send the Money

Every option below is legal. The differences are fees, the exchange rate and how easily you get a FIRA.

Comparing the two most common options? Read Wise vs Payoneer for US LLC. Still opening your US account? See Mercury Bank Account for Non-Residents.

Tip on exchange rates: If you wire USD, your Indian bank does the conversion at its own rate. On large amounts, compare that rate with Wise's before you send. Even a 1–2% gap adds up quickly.

Step-by-Step: Your First Transfer

1. Pick your route (profit or service invoice) and write it down, so every transfer follows the same pattern.
2. Prepare the paperwork. For Route 1, record an owner distribution in your LLC's books. For Route 2, raise an export invoice in USD with your LUT reference.
3. Add your Indian bank account in Mercury, Wise or Payoneer. Use an account in your own name (or your Indian business's name, for Route 2).
4. Send the transfer with a clear reference, such as "Profit distribution – [LLC name] – Q1 2027" or "Invoice INV-012 – consulting services."
5. Confirm the purpose code with your Indian bank when the funds arrive. Many banks email or call to ask.
6. Collect the FIRA (Foreign Inward Remittance Advice) for every transfer and file it with the invoice or distribution record.
7. Report it: in your ITR, in your APR (Route 1) and in your GST returns (Route 2, if registered).

What Is a FIRA, and Why You Need It

A FIRA (or FIRC) is your bank's certificate that foreign money arrived in your account for a stated purpose. It is your proof for income tax, GST zero-rating, the APR and any later bank enquiry.

Banks usually issue it only when you request it, and some charge for each one. HDFC, for example, charges about ₹200 per FIRA (source). Platforms like Payoneer and Skydo issue e-FIRAs automatically. Download them every month rather than at year end.

Tax: What Changes When the Money Moves

The transfer itself is not a new taxable event. As an Indian resident, you are taxed on your worldwide income. Most CAs treat a single-member LLC's profit as your income every year, whether or not you bring it home. Our LLC vs C Corp for Indian Founders guide explains this in detail.

Three points still matter:

• Don't count the same income twice. If you report the LLC's profit in your ITR and also report your Route 2 invoices as separate business income, you may pay tax twice on the same money. Ask your CA to reconcile the two.
• Keep Schedule FA up to date. Your LLC interest and your US bank accounts belong in Schedule FA every year, even if you transfer nothing.
• US side: The LLC still files its pro forma Form 1120 and Form 5472, whether or not you move money. See Foreign-Owned LLC Taxes.

If a US platform asks your LLC for a tax form before paying it, read W-8BEN vs W-9 for Foreign-Owned LLC first.

Common Mistakes to Avoid

• Leaving profits in the US indefinitely. Under Route 1, dues from your ODI must come home within 90 days of falling due. Plan regular distributions, for example every quarter.
• Using the wrong purpose code. Labelling a profit distribution as "freelance income", or the other way round, causes mismatches across your FIRA, GST and APR.
• Paying personal expenses from the LLC account. Use the LLC account only for business costs, and move personal money through a documented distribution.
• Sending to someone else's account. Transfers should go to your own account, or to your business's account for Route 2.
• Not collecting FIRAs. Getting old FIRAs from a bank later is slow and sometimes impossible.

If You Are an NRI

If you are a non-resident for Indian tax purposes, you can usually receive LLC profits in your NRE account. That money stays fully repatriable, and the India-side rules above largely don't apply. Your tax residency can change from year to year, so check your status each financial year.

Need Help Setting This Up?

FormLLC helps Indian founders open US business accounts and stay compliant on both sides. See our Banking Guidance and Annual Compliance services, or book a free consultation.

*FormLLC is not a law firm or a CA firm. This article is general information, not tax, FEMA or legal advice. Confirm your route and purpose codes with your CA and your authorised dealer bank.*