Moving Money Between Your US and Home-Country Entity? Get These Two Documents Right First

Why moving money between your own companies is complicated

If you are building a startup across two countries, there is a moment that needs your undivided attention. Your US entity has money in the bank. Your home-country entity is doing the work. So you move some money over. It is your company on both ends, how complicated could it be?

Complicated enough that it is one of the most common ways global startups end up with messy books and audit exposure. The fix is simple, but it has to happen before the money moves.

Most founders we work with run a US entity (usually a Delaware C Corp) plus an entity in their home country - Korea, India, wherever they started. This setup offers some benefits: your home-country network, your existing team, and brand presence in two markets at once.

But two legal entities means two sets of books, and every dollar that crosses between them is, in the eyes of tax authorities on both sides, a transaction between two related companies. Related-party transactions get more scrutiny, not less. Two documents give that transaction the paper trail it needs.

1. An intercompany agreement

A contract between your two entities stating what one provides to the other (such as engineering, design, and/or back-office operations) and how it gets paid.

The key concept is transfer pricing and the arm’s-length principle: charge your related entity roughly what an unrelated third party would charge for the same work. Transfer pricing is fact-specific, so set it up with a tax advisor rather than a template you found online.

2. An invoice from the entity receiving the money

The agreement establishes the arrangement; the invoice documents the specific transaction. The receiving entity issues it to the paying entity, and two things matter:

• Line items must match the services in the intercompany agreement. If the agreement says software development, the invoice says software development, not “consulting” or “management fee.”

• The amount, period, and currency are stated clearly.

Then store everything together (agreement, invoice, and bank record) so your accountant can tie the transfer to the entries on both sets of books. Booked correctly, it is an expense on one side and revenue on the other. Reconstructed from memory a year later, it is a reconciling item nobody can explain.

How Arclow set this up for one founder

One of our customers is a Korean founder building in both Seoul and the US. They needed to send money to Korea to cover its expenses and were about to wire it with nothing supporting it. Arclow prepared the intercompany agreement documentation from an attorney-reviewed template, using the service description and terms the founder specified, and walked them through signature, invoicing, and the documentation their bank asked for. From there, every transfer flowed straight into their bookkeeping - agreement, invoice, and bank transaction. A clean record instead of a problem for future you.

In conclusion

Before money moves between your entities:

1. Intercompany agreement: signed, priced at arm’s length.

2. Invoice: issued by the receiving entity, matching the agreement.

3. Records stored together: so the transaction books accurately on both sides.

Working with Arclow

Arclow is an AI-native accounting firm; AI runs the repetitive work, CPAs verify and sign. As our AI learns your business, our efficiency and margin improve, and we give the savings back to you as what we call “Learning Dividends”: pricing that goes down over time instead of up.

Want accurate, fast, outcome-based accounting pricing instead of a flat monthly subscription or hourly billing? Reach out.

Disclaimer: Arclow is not a law firm and does not provide legal advice or legal services. This article is general information only — not legal, tax, or accounting advice — and reading it does not create an attorney-client or accountant-client relationship.