Are you a Non-US Citizen or a foreign company looking to expand into the United States? Delaware might be a good fit for you!
To start, Delaware has a very long history of corporate friendly laws and a friendly corporate environment. Delaware offers numerous benefits in terms of convenience, tax liability and legal protection for businesses. Its laws are generally favorable to businesses, and unlike other states, it has a separate Court of Chancery that hears cases involving corporate law. Chancery judges have a background in corporate law, and can decide cases relatively quickly, without the need for a jury.
Delaware’s business statutes generally provide a number of advantages to international businesses. The law also permits and provides efficient procedures for business combinations and other transactions, including mergers, transfers, and conversions.
Investors often prefer to invest in a company that is registered in Delaware. In fact, more than half of all publically traded companies are incorporated in Delaware.
Some of the main reasons foreign companies and foreign individuals choose Delaware are:
- Structuring– The corporate statutes are very flexible in terms of how you can structure your corporation and board members. For example, shareholders, directors and officers don’t need to be residents of Delaware. Delaware allows just one person to be the only director, shareholder and officer of a corporation. In other states, you may need a minimum of three people to hold the officer and director positions.
- Privacy– Names and addresses of the officers, directors and shareholders do not need to be disclosed on the formation documents, giving an extra layer of protection.
- Tax Advantages– Businesses that are formed in Delaware but don’t conduct business there do not need to pay state corporate income tax (though there is a franchise tax of). Also, stock shares owned by people outside Delaware aren’t subject to Delaware taxes.
- No Physical Location– Delaware does not require any business activities or offices to be located in Delaware, other than a registered agent (in which IBCF can act on your behalf). Owners and managers need not be U.S. citizens. Management and investors can vote or take action by written consent from anywhere in the world, without the requirement of a formal meeting; this written consent may be made by electronic means.
- Ease of formation– The formation process is rather quick and straightforward. Many expedited options are available, but entities can be formed in the matter of hours. The formation costs are relatively inexpensive.
Below are some of the advantages of forming an LLC and a Corporation, versus each other.
Advantages of a Limited Liability Company (LLC)
- Protects personal assets from business activities
- Can form in all 50 States and Washington DC
- Pass through taxation
- No Limit on the number of owners
- Annual meetings and minute books are not required
Advantages of a Corporation (Inc.)
- Protects personal assets from business activities
- Can form in all 50 states and Washington DC
- Can issue shares of stock
- Preferred by investors and for IPO’s
- Recognized outside of the United States
- Corporate income splitting can help lower tax liability
Please note, IBCF cannot and does not provide legal and/or tax advice. The information contained here should not be used as such.
To form your company today, please Contact Us and one of our experienced Corporate Specialist will contact you directly.