Top Reasons to Register Your Business in Delaware
Delaware is a top choice for offshore business registration due to its easy registration process and favorable business environment, attracting entrepreneurs and investors worldwide.
Most technology startups and nearly two-thirds of the top companies in the Fortune 500 operate in the state of Delaware. If you are planning to open a business in Delaware, you can learn about the benefits and basic registration steps or contact our experts today.
Delaware: A Hub for Global Corporate Giants and Startups
At the beginning of 2024, over 2 million entrepreneurs and legal entities were registered in Delaware. The jurisdiction has become home to world-famous giants:
- Amazon
- Tesla
- American Express
- Disney
- Walmart
Their offices are situated in an unassuming multi-story building on North Orange Street. Delaware is a prominent global corporate center.
This state is the second largest in terms of area and the sixth largest in terms of population in the United States. Since the beginning of the twentieth century, there have been constant improvements in corporate and tax laws here, leading to a reduction in bureaucratic obstacles and restrictions for entrepreneurs and investors. Over time, the state has become known as a business Mecca due to its favorable conditions, flexible tax system, and overall positive business environment. As a result, startups, technology companies, and leaders in various industries have chosen to register their businesses in this jurisdiction, often expanding to the international level.
13 Advantages of Offshore Business Registration in Delaware
The jurisdiction is appealing to investors, startups, and large business people for several reasons.
1. Simple Steps for Registering an LLC in Delaware
The state government imposes several simple requirements on entrepreneurs wishing to register an LLC in this jurisdiction. What are the steps?
- Please suggest a name for your LLC. The name must contain the abbreviation LLC, L.L.C., or the full transcript (Limited Liability Company). We will assist you in checking the availability of your business name to ensure it is not already in use.
- Determine the number of company members.
- Create an operating agreement (optional).
- Choose our team as your registration agent for the complete Delaware business registration process.
- Complete forms, gather required documents, make payment, and submit to the registration authority.
If the company plans to hire employees, it must be registered with the US Federal Tax Service (IRS), and the owner must obtain an employer identification number (EIN).
2. Seamless Transition from LLC to Corporation in Delaware
If an LLC is experiencing successful growth, it can be converted into a corporation, providing a simple process for companies that are rapidly expanding.
Delaware’s general corporate law allows for a change in the legal structure of a business entity without complex legal procedures. This enables entrepreneurs to take advantage of new opportunities without bureaucratic hurdles quickly.
3. Flexible Structure and International Hiring for Delaware LLCs
When you register a company in the State of Delaware, you are not required to adhere to established structural standards. The business owner determines the structure, and there are no citizenship or residency requirements for LLC employees in Delaware. The owner of a legal entity can hire employees from different countries without facing legal consequences. By attracting international capital and experienced personnel from other jurisdictions, businesses can thrive. Additionally, the principal address and place of business of the company may be located outside the State of Delaware.
4. Asset and Liability Protection for LLC Members
LLC members are provided with asset and liability protection. If the business accumulates debt, the owners will not be held personally responsible for covering the debts with their personal property, movable or immovable assets, or savings.
The claim can be filed against the legal entity and not its founders. Delaware laws offer solid legal protection to the company owners, ensuring the safety of their personal assets. The separation of corporate and individual property dramatically minimizes the risks for LLC members in the event of claims by creditors against the company.
5. Single-Person Company Registration in this Jurisdiction
In most American states, when registering a company, there is a mandatory requirement for at least three participants to act as shareholders or directors. However, in this jurisdiction, it is permissible for one person, who may be a non-resident, to perform these roles.
6 . Transferability of Ownership in Delaware LLCs
In Delaware, LLCs, unlike partnerships, are not dependent on the founders of the company. They can continue to operate even if their owners sell their shares. In the state, ownership can be freely transferred without disrupting the company’s operations. This simplifies the process of inheriting a business, as the LLC will continue to exist and operate after the owner’s death.
7. Business Costs and Administrative Burden in this Jurisdiction
The cost of conducting business in this jurisdiction is, on average, 25% lower than in the country. The administrative burden in the state is one of the lowest. The list of obligatory expenses includes:
- preparation and submission of annual reports;
- payment for the services of a registered agent;
- payment of the deductible (tax 300 USD).
8. Legal Protection and Corporate Laws in this Jurisdiction
The state’s legal framework offers legal protection for businesses through the Delaware General Corporation Law (DGCL) and the Limited Liability Company Law (LLCA), providing a transparent and flexible legal environment for conducting business.
The well-developed corporate laws in this jurisdiction make it excellent for registering an international company. It is easier for corporations to conduct mergers or acquisitions here compared to other jurisdictions. Additionally, there is no need to obtain permission from regulatory authorities.
9. Flexible Tax System and Fiscal Benefits in this Jurisdiction
The state has a flexible tax system with several fiscal benefits for businesses:
- Delaware-registered companies doing business outside of Delaware are exempt from paying income tax.
- Non-residents are not taxed on inheritance base (shares) or the income from dividends.
- There is no tax on income from the sale of movable intangible property, such as royalties.
Entrepreneurs operating outside the state do not need to obtain a license. However, there is a mandatory franchise tax in Delaware, which is paid by all franchisees registered in this offshore zone.
10. Confidentiality of Owners and Shareholders in this Jurisdiction
The confidentiality of the owners and shareholders of the companies is guaranteed. In certain jurisdictions, their personal data is made public in registers. The personal data of participants can only be disclosed upon request by law enforcement agencies or in the event of a lawsuit. Corporate documents only contain the name and address of the registered agent.
11. Dispute Resolution in Delaware’s Court System
Delaware’s Court of Chancery hears disputes between companies in the state. No jury is involved; the cases are presided over by judges who specialize in corporate dispute resolution.
Due to their expertise, cases are handled promptly, and decisions are made reasonably and objectively. The State Supreme Court has the final say in hearing cases after the Court of Chancery. Additionally, there are judges dedicated to resolving commercial disputes.
12. Attracting Investment for Delaware-Registered Corporations
Investors and investment banks are more willing to prioritize corporations registered in this offshore zone. If a company or startup needs venture investments for successful development, registering an LLC in Delaware is an effective solution.
13. Setting Up a Business and Using Remote Banking Services in Delaware
After registering a business in Delaware, any businessperson will need to open a bank account. Our company can assist you with this matter.
We offer professional consulting services to help you set up LLCs in Delaware and other jurisdictions. Our experts are knowledgeable about the registration requirements and stay updated on any legislative changes. By using our services, you can establish a ready-to-operate business in a prestigious offshore jurisdiction.