What you can already do without an LLC
Amazon.com accepts sellers from India: you can register with your Indian identity, list products, and use FBA. Amazon's marketplace handles most US sales tax collection for you (more below). If you're testing a product with tiny volumes, starting as an Indian individual seller is legitimate, and cheaper.
So the LLC question isn't "can I sell without one", it's "at what point does not having one start costing me money and sleep".
What the LLC actually fixes
- Banking and cash flow. Amazon disburses to your bank. Without a US account, disbursements to India eat currency spread on every payout. An LLC with a Mercury/Wise account receives USD at par, you convert when rates suit you, not when Amazon's calendar says so. On lakhs of monthly revenue, this line item alone can pay for the LLC several times over.
- Liability protection. FBA means physical products in American homes. Product liability claims in the US are a different animal than in India, the LLC puts a legal wall between a defect claim and your personal assets. This is the quiet, most important reason.
- Supplier and platform credibility. US wholesale suppliers, brand registries, and retail partners deal more easily with a US entity with an EIN, some won't onboard foreign individuals at all.
- Scaling paths. Aggregators and buyers acquire companies. A clean LLC with separated books is sellable; a personal seller account with mixed finances is a diligence nightmare.
- Payment stack. Beyond Amazon, your own Shopify/DTC site with Stripe, needs the US entity anyway.
The sales tax question, answered honestly
Good news that surprises most sellers: under marketplace facilitator laws (now in effect across essentially all states with sales tax), Amazon itself calculates, collects and remits sales tax on marketplace orders. For a pure-FBA seller, sales tax on Amazon orders is largely Amazon's job.
What remains yours to watch:
- Your own website's sales (Shopify checkout), marketplace laws don't cover them; economic nexus thresholds (commonly $100k or 200 transactions per state) do.
- Registration questions, a few states have historically wanted sellers with in-state FBA inventory to register even when the marketplace collects; the practical exposure keeps shrinking, but it's worth a check when volumes get serious.
💡Rule of thumb
Amazon-only sellers: sales tax mostly handled. Amazon + own-site sellers: watch your own site's per-state thresholds.
Income tax for FBA sellers
Here's where FBA differs from services: your inventory sits in US warehouses and sales happen in the US, which makes the "no US trade or business" analysis genuinely less clear-cut than for a developer coding from Bengaluru. Positions vary among practitioners; treaty provisions (permanent establishment rules) matter; and the answer can depend on your exact operating pattern. This is one of the few founder profiles where we insist the US tax consultation happens before committing to a structure, which is why it's included in the package. The Indian side is unchanged: profits are your global income, taxable in India, with the LLC in Schedule FA and the RBI's ODI reporting in place.
The right setup sequence
- LLC formation, Wyoming works well for FBA; the analysis is in the Wyoming guide.
- EIN, needed for Amazon's tax interview as an entity, wholesale accounts, and banking.
- US bank account, where disbursements land.
- Amazon seller account, register fresh as the entity, or convert your existing account's legal entity (Amazon supports updating the legal entity; do it carefully and once).
- Tax interview (W-8/W-9 flow), the LLC's details, matching everything else.
- Books from day one, inventory businesses without clean books can't be sold, audited, or even understood.
