Joshua D'Costa
Growth & Marketing
Nov 14, 2024
|
5
min
Table of Contents
Introduction to Stripe Atlas and Its Limitations for Indian Entrepreneurs
Stripe Atlas is often marketed as a fast-track solution for entrepreneurs worldwide who want to incorporate their businesses in the US. The platform allows users to incorporate a Delaware company, obtain an EIN, and start accepting payments via Stripe, all this with minimal setup.
However, for Indian entrepreneurs, this seemingly convenient process can lead to severe legal and financial consequences due to India's FEMA (Foreign Exchange Management Act) regulations.
Stripe Atlas doesn't consider these nuances, which is why using it can result in hefty fines, company shutdowns, and years of legal complications.
Understanding FEMA and RBI Restrictions on Stripe Atlas
For Indian entrepreneurs, setting up a US entity through Stripe Atlas involves a major legal risk due to the Foreign Exchange Management Act (FEMA) of India. FEMA prohibits Indian residents from directly owning assets abroad without following RBI’s approved Overseas Direct Investment (ODI) process, which requires acquiring a Unique Identification Number (UIN) and other formalities.
Stripe Atlas does not take into account India-specific regulatory nuances, leading to potential violations of FEMA. Indian entrepreneurs who incorporate in the US using Atlas could face severe penalties, and there is often no way to retroactively fix this issue without shutting down the US entity.
Key Insight: Indian entrepreneurs need an alternative solution that complies with FEMA and eliminates the risk of direct foreign ownership complications. This is where Dodo Payments as a Merchant of Record (MoR) offers an ideal solution.
Why Dodo Payments as a Merchant of Record is a Great Alternative
Dodo Payments provides an innovative and compliant alternative to Stripe Atlas by acting as a Merchant of Record (MoR) for Indian founders.
Unlike Atlas, which makes founders the direct owners of a foreign entity, Dodo Payments handles global transactions on behalf of the business and manages legal complexities across borders. This ensures compliance with Indian and international laws, sparing founders from direct ownership issues under FEMA.
As a Merchant of Record, Dodo Payments enables Indian entrepreneurs to operate in the US market and process payments globally without requiring incorporation of a US entity or direct foreign ownership.
Instead of setting up a risky US entity, Indian founders can rely on Dodo Payments to:
Collect payments,
Handle tax compliance,
Manage subscriptions
Ensure compliance with local and foreign regulations
Provide localized payment methods
How Dodo Payments’ Merchant of Record Model Benefits Indian Founders
With Dodo Payments as a Merchant of Record, Indian founders enjoy the convenience of global expansion without the pitfalls of incorporating abroad or dealing with FEMA violations.
Here’s how it works:
Full Regulatory Compliance: By acting as the Merchant of Record, Dodo Payments assumes all compliance responsibilities for foreign transactions, allowing Indian founders to focus on growing their business without worrying about regulatory breaches.
Simplified Tax and Legal Handling: Dodo Payments manage tax compliance and legal requirements, ensuring transactions are fully compliant with RBI, FEMA, and international regulations.
No Need for a US Entity: Founders do not have to set up a US company, eliminating ODI requirements, UIN application, and the need for complex foreign ownership structures. Dodo Payments handles these aspects through its established Merchant of Record structure.
End-to-End Payment Processing: Dodo Payments provides seamless payment collection, processing, and remittance, enabling Indian businesses to accept and process global payments efficiently.
Steps to Start Using Dodo Payments for Your Global Sales
Getting started with Dodo Payments as a Merchant of Record is straightforward and tailored for Indian founders:
Sign Up with Dodo Payments: Begin by registering with Dodo Payments to onboard your business.
Set Up Payment Details: Dodo Payments will handle the setup of compliant payment solutions tailored to your business.
Enable Global Transactions: Start accepting payments globally without the need for a foreign entity.
Enjoy Compliance Peace of Mind: As your Merchant of Record, Dodo Payments takes care of cross-border transaction compliance, so you can scale confidently.
Key Advantages of Choosing Dodo Payments Over Stripe Atlas
For Indian entrepreneurs, Dodo Payments provides a compliant, efficient, and cost-effective alternative to Stripe Atlas. Here’s why it’s a better choice:
Avoid FEMA Violations: Dodo Payments removes the need for direct foreign ownership, allowing entrepreneurs to scale globally without violating FEMA.
Simplified Taxation and Compliance: As a Merchant of Record, Dodo Payments handles tax obligations, refunds, and regulatory filings for you.
No ODI and UIN Requirements: Indian founders can avoid the lengthy and complex process of applying for Overseas Direct Investment and Unique Identification Numbers from the RBI.
Faster, Cost-Effective Solution: By removing the need for US entity incorporation, Dodo Payments is both faster and more affordable than Stripe Atlas.
End-to-End Payment Processing: Dodo Payments provides a powerful payment infrastructure, comparable to Stripe’s, with the added benefit of compliance and simplified setup.
Conclusion: Embrace Compliance and Global Expansion with Dodo Payments
While Stripe Atlas offers a seemingly easy path to accessing the US market, Indian entrepreneurs face serious legal hurdles due to FEMA and RBI regulations.
Dodo Payments offers a safer, fully compliant alternative as a Merchant of Record, allowing you to access global markets without violating Indian laws.
Choose Dodo Payments as your Merchant of Record to enjoy the benefits of international business expansion, seamless global payment processing, and compliance with India’s stringent regulatory framework.
Skip the risks, and focus on what matters, i.e. growing your business confidently across borders.
