Delaware has established a reputation around the world as the best and most business-friendly state in which to incorporate.
Delaware, a small Mid-Atlantic U.S. state and sits on an east coast peninsula called the Delmarva, marked by dune-backed beaches bordering the Atlantic Ocean, Delaware River and Delaware Bay. It is bordered by Pennsylvania in the north; the Delaware River, the Delaware Bay, New Jersey, and Atlantic Ocean in the east; and Maryland in the south and west.
Foreign businesses seeking to enter or expand in the American marketplace can use their location in Delaware to accomplish their objectives. Delaware’s strategic location permits easy access to the United States marketplace, the largest in the world.
Delaware is one of the most popular jurisdictions in the USA to incorporate because it provides a complete package of incorporation services, including modern and flexible laws. The type of company that is formed in Delaware is a Limited Liability Company, also known as an LLC. A Limited Liability Company is a legal entity that is separate from the individuals who run it.
Delaware companies enjoy incomparable tax savings:
- Ownership of Delaware limited liability company is strictly confidential
- No accounting/reporting requirements
- There is no state income tax for Delaware corporations that conduct business out of state
- No inheritance tax on stock held by non-Delaware residents
- No state sales tax on intangible personal property (such as royalty payments)
- Share of stock owned by non-resident aliens are not subject to Delaware taxes
- Delaware corporations, not operating in the state of Delaware, do not need to acquire a business licence in Delaware
- The members are not liable for the debts and obligations of the limited liability company
- You do not need a physical address in Delaware as long as you retain a Delaware Registered Agent to administer your Delaware corporation or LLC.
Here are other factors to consider:
Whilst your company won’t pay income tax in Delaware, it will have to pay the Delaware franchise tax based on the shares’ value. This is minimal for small businesses.
Delaware has a Court of Chancery, which handles only corporation cases. The judges are experts in corporate law, and the decisions from the court tend to be more predictable than those in other states.
Read more about Delaware on Wikipedia.