We are an Indian company that wants to start a startup studio and also a holding company outside of India. What are the best options we have?

The ways I've done this in the past are 1) Find some customers that are willing to hire you (or your product) but know that you'll only be free nights & weekends to support/work with them. 2) Find a "partner" (co-founder or other) that's got a flexible schedule that can help build the business while you're at work. 3) Block out nights, mornings and weekends to build the business till you have enough orders to cover 50% of your salary. This might mean 7pm-11pm most nights, and 4 hours each day Sat & Sun. Make progress (sales $$$) and momentum. All that being said, it's risk reward. Sounds like you want to avoid taken the risk, and I get that .. but the upside is always smaller. Unless you put yourself in a position to have to succeed (ex: quitting your job) then you may never make the scary decisions that are required to build a company (like cold calling, going in debt, making a presentation, etc). I'm on company #5 with many other side projects started nights & weekends .. so I get it - but don't be afraid to bet on yourself and go all in.

Back when I started LinkedIn wasn't as huge as it is now. I wish it was. I didn't have a large network and those networking sessions NEVER brought me any clients. I used to go to all sorts of them hoping to get clients. There were a couple of nibbles here and there, but never anything serious. The only thing that helped was reaching out DIRECTLY to people in my target market. That meant cold calls and cold emails. I'd sell myself while thinking about their needs. Once I got a few bites I'd build good rapport by keeping in touch, asking questions, repeating back what they were saying so that they knew I was on the same page and kept my promises. If I said I'd call them back next Tuesday at 2:15 I'd do so. Eventually I built trust with them without having a network, or an insane amount of experience. Oh and the most important thing about consulting is to LISTEN. When those first clients notice that you're truly listening and you're not selling the cookie cutter solutions everyone else is trying to sell them that's when you got them hooked. You start to understand their problems, fears, and see through their eyes and not just yours. A network will help, but in the beginning just good 'ol salesmanship will get the ball rolling.

Yes you should be reporting the capital contributions. Under the old Form 5472 rules, it's true that only items that impacted taxable income would be reportable transactions. So, a capital contribution by you to the corporation would not be reportable, unless the equity contribution was somehow below or above a fair value contribution in exchange for services that you might provide for the corporation - essentially an imputed reportable transactions. When the IRS changed the Form 5472 rules to require non-U.S. owned single member LLC's, they expanded the reportable transaction definition to include virtually everything. The term “transaction” is defined in Treas. Regs. Section 1.482-1(i)(7) to include any sale, assignment, lease, license, loan, advance, contribution or other transfer of any interest in or a right to use any property or money, as well as the performance of any services for the benefit of, or on behalf of, another taxpayer. So, for example, contributions and distributions would be considered reportable transactions with respect to such entities. These amounts can be reported on Lines 12 and 25 with an explanatory footnote that clarities the amounts are capital contributions and not amounts that impact taxable income.

I'll keep try to keep this answer brief, but there are several factors and nuances that can be discussed in more depth. Where you decide to incorporate partly depends on what your future goals are with your company. Companies that plan to seek venture capital or go public typically choose Delaware as the state of incorporation, and usually choose a C-Corp. Delaware has a very well developed body of law surrounding corporate governance and that provides comfort and more certainty to future VC investors. If you're not planning to seek VC money any time soon, an LLC is a smart decision because of the tax benefits it can provide to you as the owner. It sounds like you want to grow your company on your own without outside financing. If that's the case, I would recommend forming your LLC in California. Regarding California vs. Delaware, one benefit to forming your LLC in California is that you can avoid paying a registered agent fee which can cost anywhere from $100-200 a year. If you plan to seek venture capital down the road, you can reincorporate in Delaware.

You ask the customers, and gauge their level of interest. Better yet, get yourself in front of some customers, and instead of telling them what you make or do, ask them what they need. When you notice that many of them need the same thing, and if it is something you can make or provide, you then have a business idea worth pursing.