Team, Co-founders & Legal

How should I handle equity or contracts for a co-founder, advisor, or contractor sitting in a different country?

A starting point

Cross-border people make your cap table and payroll a compliance question, not just an HR one. A US co-founder holding shares in your Indian company triggers FEMA reporting; an Indian founder holding shares in a Delaware corp has FEMA and LRS implications. For advisors, use a standard advisor agreement with a small vesting equity grant (a FAST-style agreement in the US); for contractors, use a clear contract with explicit IP assignment and pay them as vendors, not payroll. Get the structure right before granting anything, because fixing foreign shareholding retroactively is slow and expensive.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Read Use

Read

📄 Article
✓ Link checked India Free Advanced

Why we picked it This is the India-specific FEMA reality check almost every cross-border founder gets wrong. It is written by a practicing CA who walks through exactly what happens when an Indian resident holds equity in a Delaware corp: the LRS $250,000 annual cap, the $100,000 pre-incorporation expense sub-limit, the Overseas Investment Rules 2022, UIN registration before any transfer, the Annual Performance Report due December 31, and the specific trap of funding a US entity by credit card via Stripe Atlas. It names the mistakes people actually make, so you fix the structure before you grant a single share.

Indian Resident Individual Planning to Incorporate in US? Ensure Compliance with Indian FEMA Law

From CA Abhinav Gulechha by Abhinav Gulechha 18 min read

  • An Indian resident holding shares in a US company triggers RBI's ODI/LRS framework: report via AD bank, register a UIN before transferring funds, and stay within the $250,000/year LRS limit
  • Even a zero-cash Delaware incorporation you control counts as ODI and must be reported; assuming an LLC or a Stripe Atlas credit-card setup is exempt is a common and penalized error
  • Ongoing duties are real: Annual Performance Report by December 31, disinvestment reporting within 30 days, and proof of investment within 6 months, with penalties for skipping them
Open abhinavgulechha.com →

Use

🛠️ Tool
✓ Link checked Free Intermediate

Why we picked it This is the canonical, industry-standard answer to 'how much equity for an advisor', a free, ready-to-sign template used by tens of thousands of founders and advisors a year. It replaces awkward negotiation with a simple grid that maps engagement level and company stage to an equity number and vesting schedule.

The FAST Agreement (Founder / Advisor Standard Template)

From Founder Institute (fi.co) by Founder Institute short

  • Advisor equity is standardized by engagement level (standard / strategic / expert) and company stage, roughly 0.25% to 1%.
  • The template bakes in vesting (typically ~2 years) so a departing advisor doesn't keep unearned equity.
  • It removes the need for custom legal drafting: check a few boxes, sign, and start working.
  • Version 3 (2026) can be localized to jurisdictions beyond the US, including India, without hiring a lawyer.
Open fi.co →
📋 Template
✓ Link checked Free Beginner

Why we picked it For a contractor in another country, the two things that bite you are IP ownership and misclassification, and this free template addresses both directly. It ships with a clause assigning all work product to your company plus explicit notes that IP-assignment enforceability varies by jurisdiction (Australia, Canada, and parts of Europe can vest rights with the contractor unless you word it right), and it frames the contractor as a vendor, not payroll, which is exactly how you should be paying them.

Independent Contractor Agreement Template (with country-specific IP guidance)

From Deel by Deel template

  • Pay cross-border contributors as vendors on a clear contract with an explicit IP-assignment clause, never as payroll, to avoid misclassification liability
  • IP assignment does not transfer automatically: some countries vest ownership with the creator, so pair a full assignment with a license fallback and adjust for the contractor's jurisdiction
  • Get local legal review before finalizing, because a US-style template may not be enforceable as-is in the contractor's home country
Open deel.com →

People also ask

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