About Delaware
Delaware is one of the 50 states of the United States, located on the east coast of the country. Delaware holds great appeal among entrepreneurs and business professionals as a preferred location for company registration and business operations.
The atmosphere in Delaware is characterized by flexibility in corporate legislation and a culture of innovation, making it an ideal destination for entrepreneurs who value freedom and a high-tech environment. Therefore, if your field is technology, then you are a winner and you need a company in America. Delaware boasts a well-developed technological sector and supports startups, making it particularly attractive for technology-based businesses.
With low tax obligations and no income tax for companies operating outside the state, Delaware offers opportunities to save costs and explore global perspectives for businesses of any kind. It is often because of this advantage that you can hear the phrase about registering an “offshore” company in the state of Delaware.
Advantages of registering a company in Delaware:
- International Authority: The state is renowned as the “corporate capital of the world,” allowing businesses registered in Delaware easy access to international markets.
- Chancery Court and Corporate Law: Unchanging commercial laws, enacted by judges rather than juries, enable business owners to anticipate the outcome of legal processes before resorting to court.
- Tax Benefits: Delaware imposes no sales tax, personal property tax, tax on income from investments, or inheritance tax (although a franchise tax is levied in the state). Holding companies are exempt from corporate tax under the U.S. Tax Code (IRC 501(c)(2), IRC 501(c)(25)).
- Simple Registration: Opening a company in Delaware requires the disclosure of only a minimal amount of personal information, making the registration process straightforward, with personal information remaining non-public.
- Promptness: The Delaware Division of Corporations efficiently processes over 20,000 corporate documents per month, ensuring swift registration within 24 hours or even a few hours for expedited requests (with additional fees).
- Startup Recommendation: If considering a startup, it is advisable to register a corporation in Delaware instead of an LLC. Having a Delaware corporation can instill higher confidence in potential investors.
- Exemptions for Holding Companies: Most holding companies in Delaware, as per the requirements of Sections 2301(b) and (d), and Section 30 of the Delaware Code, are exempt from the obligation to obtain a license for professional entrepreneurial activities.
- Easy Maintenance: Annual reports to the registry can be quickly and easily submitted online.
- Online registration: For entrepreneurs, due to its legislation and flexible taxation system, the state of Delaware is very attractive, where registration of an offshore company takes place remotely.
Company forms
In Delaware, non-resident companies register as Limited Liability Companies (LLCs) and Corporations (C-Corps), primarily concentrated in the fields of finance, technology, and business consulting.
- LLC Form: Predominantly used for small businesses, it allows the registration of a single-member company (Single-Member LLC).
- Corporation Form (C-Corp): With a more complex ownership structure, it is better suited for large-scale investment projects.
Requirements for company forms in Delaware:
Single-Member LLC/LLC in Delaware:
- Capital and contributions: There is no set minimum statutory capital for an LLC, and contributions are not mandatory. The main principle is flexibility in defining the terms and amounts of contributions, depending on the agreement between the founders, based on which the company operates (the founders’ agreement determines ownership shares, including the option to allocate shares with or without voting rights).
- Members: Any individual or legal entity can be a founder, without restrictions on their month of residence or citizenship.
- A company with a single participant can be recognized as a private enterprise and have individual taxation - Single-Member LLC.
- Company management: Organizational management of the company can be carried out by its members or a manager appointed for this purpose.
- The manager overseeing the company can be an individual or a legal entity and is not necessarily required to be a U.S. resident.
- LLC is not obliged to hire a secretary, but the presence of a registered agent and a legal office in the U.S. is mandatory.
- Confidentiality: Information about beneficiaries is submitted to a closed registry, remaining confidential and not public.
- Financial reporting: Mandatory submission of annual financial reports, sometimes required from LLC members.
C-corp in Delaware:
- Statutory capital and shares: C-Corp does not have a minimum statutory capital requirement.
- The company’s shares can be of various types and classes, owned by any individual or legal entity, regardless of their residency. This allows the company to easily change participants and attract additional capital.
- Management: C-Corp shareholders appoint a board of directors responsible for the strategic management of the company. Day-to-day management is handled by appointed management.
- Shareholder meetings are held annually to discuss important issues, such as the appointment of board members and profit distribution. Shareholder meetings are recorded in protocols.
- Confidentiality: Information about beneficiaries is submitted to a closed registry, remaining confidential and not public.
- Financial reporting: C-Corp is required to submit annual financial reports and tax returns.
- The presence of a registered agent and a legal office in the U.S. is also necessary.
- C-Corp pays income tax on its activities. This tax is paid by the company, not its owners. C-Corp can deduct certain expenses from its income, reducing the amount of tax it owes.
Taxation
Like in all states in America, taxation in Delaware has several levels and depends on the company’s structure and the chosen tax classification: as a corporation or an LLC (individual taxation).
An individual owner of an LLC in Delaware with a single member (Single-Member LLC) engaged in trade or business is subject to taxation on net self-employment income, similar to that of a sole proprietor.
| Type |
Federal Corporation Income Tax |
DE Income Tax |
DE Sales Tax |
| LLC |
It depends on the structure of the LLC. Profits are passed on to the owners of the LLC (members) and are taxed at the level of their individual tax returns.
10% - $0-$10275
12% - $10275-$41775
22% - $41775-$89075
24% - $89075-$170050
32% - $170050-$215950
35% - $215950-$539900
37% - $539900+
|
Delaware does not levy state income tax for LLCs. |
There may be a local Sales Tax, but there is no statewide Sales Tax. |
| Corporation |
21% |
In the event of income received from the state of Delaware, the state income tax rate is 8.7%. |
0% |
In addition, the IRS provides tax exemptions to holding companies that own charitable or religious organizations or possess one or several companies eligible for tax privileges (exempt organizations).
Annual franchise tax declaration in Delaware:
- Corporations in Delaware must file an annual franchise tax declaration by March 1st. The franchise tax is calculated based on the number of issued shares of the corporation or the number of distributed shares and their value.
- Limited Liability Companies (LLCs) in Delaware are also required to pay the franchise tax. The deadline for LLCs is June 1st, and the amount is $250.
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Key points
To conduct business in Delaware, a company must obtain an Employer Identification Number (EIN). For Single-Member LLCs, a Social Security Number (SSN) may be sufficient, or an Individual Taxpayer Identification Number (ITIN) if unavailable.
Considering all the advantages of establishing a company in Delaware, you are choosing an innovative and business-friendly environment for your enterprise. This state not only offers favorable tax conditions and flexible corporate laws but also allows you to conduct business with confidentiality and remotely while adhering to high standards.
Therefore, we recommend starting your journey to success and stability by selecting Delaware as the legal home for your business. Our team is ready to provide comprehensive support during the registration company in USA and offer necessary consultations.
Register your offshore company in Delaware—transform your business ambitions into reality.
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IF YOU ARE PLANNING TO OPEN AN OFFSHORE COMPANY IN THE STATE OF DELAWARE, CONTACT US:
+38 (098) 737-88-88
WE WILL HELP YOU WITH REGISTERING AN OFFSHORE COMPANY IN THE STATE OF DELAWARE OR ANY OTHER COMPANY IN THE USA.
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