Company Registration in Delaware
Starting a business in the USA raises several questions for investors. The main one is which state to choose for their entrepreneurial initiative? Non-residents of the country who want to start their business in the States should pay attention to Delaware.
Due to attractive corporate legislation and a favorable tax system, Delaware is often equated with an offshore zone. Additionally, this jurisdiction is characterized by a stable economic situation, accessibility of financing for new entrepreneurs, and effective ways to protect intellectual property. More than 65% of the most successful American corporations (according to FORTUNE magazine) are registered in this state.
To start a business in Delaware, you need to register a company. The process has several nuances, so it's better to turn to professionals. They will help you launch your startup quickly and on favorable terms.
Can you open a business in the USA without a visa?
Personal presence is not required for company registration in Delaware; all necessary actions can be completed remotely. For this, you need to use the services of a company that is an official registered agent. They will do all the main work.
A successfully functioning company will become an important step towards obtaining an American visa in the future.
Delaware State: Offshore or Jurisdiction?
Delaware is a de facto offshore zone, but not de jure. Legally, there is no such concept in the USA. It's more correct to consider Delaware a jurisdiction with particularly attractive conditions (tax system, legislative base, etc.) for foreign companies registered in its territory but not conducting business in the state. Nevertheless, Delaware offshore is the most common association with an American offshore zone. However, businessmen from Russia should consider recent changes: since July 2023, the Russian Ministry of Finance has expanded the list of offshore zones from 40 to 91, including the entire territory of the USA.
What makes opening a business in the state attractive
Delaware's investment attractiveness is explained by several factors.
- Clear and consistent legal system.
The state's legislative base is the "gold standard," i.e., a classic system. Local legislative norms, on one hand, cover almost all relationships between the investor, management, employees, product consumers, and on the other - ensure predictability of legal actions. This allows companies to avoid lawsuits and more accurately determine the consequences of commercial decisions made. - Corporate governance legislation is favorable and loyal to all enterprises.
For example:- minimum number of company owners - possible to use just one individual or legal entity;
- no mandatory annual general meeting required;
- no need to indicate owner names in founding documents;
- no requirements for minimum authorized capital;
- for corporations registered in Delaware not conducting business in this state, no commercial activity license is required.
- Legislative protection for management making risky decisions.
If there are no signs of fraud, courts and other government bodies always proceed from the good faith of directors' actions. In case of inability to pay existing debts to creditors, the legislation protects the owner's personal assets from any claims. - Efficient administrative system operation.
The document processing process in Delaware is at a very high level. All business papers are processed by government bodies without delays and unnecessary difficulties. Moreover, there's always the possibility of expedited processing at higher rates. For example, the state secretary can reduce the time for approving corporate documents to 1 day. - Fast operation of business courts.
For resolving business disputes between companies, there is a separate Court of Chancery in the state. Its feature is the absence of jury trials. Almost any business disputes are resolved in Delaware courts within several months. - Developed case law practice.Thanks to this, corporate lawyers have a clear understanding of how to resolve issues related to transactions or internal company structure, even if it's not exactly specified in legal norms.
- Innovative approaches to implementing corporate law.For example, the state administration announced that since 2017, Delaware corporations have been legally allowed to issue their shares using the same technology that underlies the issuance of virtual currency Bitcoin, alongside the traditional method.
How to Register a Company in Delaware
The registration process begins with choosing the form of enterprise and its name. These two things are entrusted to the non-resident, everything else will be done by the registration agent.
It's advisable to reserve the chosen name. For this, an application is submitted to the Secretary of State. The company name must be unique and must include the words Corporation, Incorporated, Limited Liability Company or their abbreviations (Corp., Inc., LLC). Also, note that using certain words in the name is prohibited, for example, Bank or Insurance. To use such words, you need to obtain the appropriate license in advance. The company acquires a legal address or, if necessary, gets a virtual office.
Next is the preparation and filling out of all necessary documents according to the chosen legal form of business. Usually, this is an LLC or corporation. The package of documents is submitted for consideration to the Secretary of State.
The following steps are registration with the tax service, obtaining a special taxpayer number, and opening a bank account.
Taxes in Delaware
This state is often called an offshore, although formally this is not true. This association arose because if the founder is a non-resident and the company does not conduct business in Delaware and the USA, it is exempt from paying almost all taxes.
LLC pays only a franchise tax at a fixed rate of $300. For corporations, the tax amount is determined by the number of authorized shares and starts from $175.
Some tax features that favor opening a business in Delaware:
- The non-resident owner pays only federal tax at a rate of 21%;
- Local corporate income tax is not levied on companies conducting business outside the state (in other cases, the rate is 8.7%);
- No inheritance tax on shares owned by non-residents;
- No sales tax;
- Shares of non-residents are not subject to taxation;
- No requirement to submit an audit report to tax authorities.
How much does it cost to open a company
The costs of opening a company are directly related to the services you need: opening a bank account, providing nominee director services, maintaining corporate documentation, organizing a virtual office, etc.
The cost also depends on urgency. The standard registration procedure takes an average of 5-7 business days. However, there is a possibility to speed up the process with an additional payment.
You can also use the option of opening a business through purchasing an existing Delaware company with a certain 3-5 year history. It will be re-registered according to the client's wishes.
Why choose us?
US Business Services experts will quickly and error-free process your Delaware company registration, accompanying you at every stage.
All services are provided remotely, without the need for personal presence, saving your time and giving you freedom of action.
We'll help with opening a bank account, annual reporting, and asset protection for the reliability and growth of your business.
