The United States of America offers you the economy, markets and business climate that you need to expand your business internationally. The United States of America has everything your company needs to expand its operations internationally:
- The world's largest economy: The USA's gross domestic product (GDP) is US$14 trillion, and its per capita GDP is more than US$47000—higher than all major developed economies.
- A commanding consumer market: The USA has some 310 million U.S. consumers and a median household income of over US$50000.
- Competitive investment and business climate: The USA ranks number 2 in AT Kearney's Foreign Direct Investment confidence index rankings; number 4 in the World Economic Forum's competitiveness rankings; and number 5 in the World Bank's "Ease of Doing Business" rankings.
- Vast internal markets to leverage your business opportunities: The United States provides unique market opportunities, whether you are selling to a niche or have applications all along the supply chain.
Make Delaware Your Corporate Home
In the U.S., business entities are formed at the state level. So if you are looking to expand your business in the United States, you will need to select a state for your company's corporate home. This is a very important decision because the laws of the state that you select will govern the business affairs of your company.
This concept often is referred to as the internal affairs doctrine. Internal affairs refers to all of the corporate governance and fiduciary issues that arise within your business, including but not limited to the relationship among stockholders, the duties and obligations of officers, directors and other managers, the election and appointment of directors, the regulation of dividend payments, and the procedures for authorizing the business to acquire and sell major assets or to undertake a fundamental transaction such as merger, consolidation, or dissolution.
The laws governing a corporation's internal affairs also can have a significant effect on the outcome of important legal disputes. Since the internal affairs of a corporation are regulated at the state level, your choice of which state's law will govern those matters is one of the most important decisions you can make about your business.
The State of Delaware should be at the top of your list, for it is widely regarded as the corporate capital of the world. Delaware has been the preeminent place for businesses to incorporate in the United States for more than 100 years and is currently the legal home to more than a million business entities.
While the sheer number of corporations and limited liability companies organized in Delaware is significant, it is equally significant that so many large and important companies are incorporated in Delaware.
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Top 10 Reasons to Form Your Business in Delaware
- The State of Delaware is the leader for corporate law worldwide.
- Delaware's Division of Corporations provides world-class professional service.
- More than one million business entities call Delaware their legal home.
- More than half the Fortune 500© companies are incorporated here.
- Delaware has the most advanced and flexible business entity statutes in the United States which allows businesses to maximize profits.
- Delaware's Court of Chancery has written most of the modern U.S. corporation case law, providing businesses with greater predictability and less risk.
- There are no residency or citizenship requirements in connection with forming a Delaware corporation or limited liability company (LLC).
- Delaware doesn't charge sales tax, corporate income tax, or personal or intangible property taxes if the business operates outside of the state.
- Delaware corporations and LLCs can access Delaware's award-winning courts to resolve disputes (regardless of where their operations are located).
- Delaware judges—among the finest anywhere—are appointed by the Governor after a comprehensive selection process.
Make Delaware the Home to Your Operations
Delaware is one of the smallest states in the U.S., a place where people care about their neighbors. We understand that cumbersome bureaucracy is time-consuming, expensive and frustrating. Delaware's streamlined processes and clear expectations make it easy for companies to get up and running so they can start making money. Here's how:
Delaware is Conveniently Located
- Strategically located in the Mid-Atlantic region, Delaware is only a few hours' drive from 35% of the U.S. population, giving businesses superior access to markets.
- Delaware's largest city, Wilmington, is an easy half-hour drive from Philadelphia, and less than two hours from New York City and Washington, D.C.
- The deep-water Port of Wilmington is the busiest terminal on the Delaware River, is the top U.S. port for perishable cargo, has the largest on-dock cold storage facility in North America, and handles a wide range of other specialty cargo.
Delaware Offers a Low Cost of Doing Business
- Delaware has an advantageous tax structure, with no sales tax or VAT.
- Delaware enjoys a low cost of living and the lowest median property taxes in the Mid-Atlantic region–among the nation's lowest.
- The state enjoys a healthy, diversified economy, including advanced materials, clean energy, life sciences, manufacturing and professional services. The unemployment rate is well below the national average and our state maintains a AAA bond rating.
- There is room to grow, with competitively priced office space, industrial space and land to build.
- Based on feedback from businesses, Governor Jack Markell rallied local mayors and the Delaware Municipal Electric Corporation to bring down municipal electric rates by at least 10%.
Delaware Has a High-Caliber Workforce
- Delaware has a highly skilled, educated and productive workforce, ranked second among states for PhDs per capita, and first for patents per capita.
- Kiplinger's Personal Finance magazine ranks the University of Delaware in the Top 25 public colleges that provide quality education at an affordable price.
- The University of Delaware's Department of Chemical & Biomolecular Engineering is ranked in the top ten nationwide by U.S. News and World Report.
- Delaware State University is home to the Optical Sciences Center for Applied Research (a NASA University Research Center) and the Applied Mathematics Research Center.
- Delaware's public school system won first place in the President's national Race to the Top education competition, and the state's early-education plan garnered third place. In addition to strong public schools, there are numerous charter schools and independent schools to train tomorrow's workforce.
Delaware Offers Superior Quality of Life
- Delaware is warm, friendly and welcoming. We are proud of our diverse population.
- Delaware is rich in history and culture and is home to the renowned Winterthur Museum, which–together with the University of Delaware–houses one of the world's leading centers for cultural conservation.
- The state offers some of America's most beautiful and cleanest beaches, parks and the Delaware Greenways, a statewide trail system for hiking and biking.
Taxes are Streamlined and Business-Friendly
Delaware's business tax climate is ranked 12th out of the 50 states by the Tax Foundation, a non-partisan research group. That is the best ranking of any state in the Mid-Atlantic region. Here are some of the other tax advantages:
- No sales tax, no VAT, and no Delaware state real property taxes. The local real property taxes are very low.
- The corporate income tax rate is 8.7% on net income earned in Delaware.
- Gross receipts tax rates currently range from 0.1006% to 0.7543%, depending on the type of business. Rates for gross receipts licensing fees went down in 2012.
- Delaware corporations pay a minimum franchise tax of US$75 up to a ceiling of US$180000, based on the number of authorized shares.
Financing, Training and Other Services to Meet the Needs of Your Business
The Delaware Economic Development Office (DEDO) offers a wealth of services to help your business prosper:
- Location Services: DEDO provides a full line of services to help you identify commercial property, allowing you to meet your business's unique requirements and execute on your business plans quickly, easily, and cost effectively.
- Compliance Services: DEDO introduces you to professionals and works with local officials to help you understand your compliance requirements, including obtaining necessary licenses and permits, and to ensure you have everything you need to expand or launch your business in Delaware.
- Delaware Strategic Fund: The state provides custom financial assistance in the form of low-interest loans, grants, and other creative instruments.
- State Small Business Credit Initiative: Companies with fewer than 750 workers can receive below-market rates and flexible terms on 20% of a loan amount, up to US$1 million.
- Delaware Access Program: Gives banks more flexibility to make business loans that are somewhat riskier than a conventional loan but are still consistent with safety and soundness. Banks also are encouraged to lend to non-traditional businesses.
- DEDO Workplace Development Center: DEDO and Delaware's Department of Labor can assist you in recruiting a quality workforce. DEDO can help companies identify training resources; you may be eligible for a Customized Training Grant.
Choosing the Best Business Structure for Your Company
Once you have decided that you want to expand your business to the U.S., you will need to decide what type of corporate structure you will use. You have several options:
- You can use your current entity type and register it in the state(s) where you intend to do business. This is called opening a branch office.
- You can form a new entity, typically either a corporation or a limited liability company. This entity can be a stand-alone entity or a subsidiary for your current business.
Note: Entities in the U.S. are formed at the state level.
Limited Liability Company (LLC)
A limited liability company (LLC) is generally the easiest entity to form and the most flexible for its owners. You form an LLC by filing a certificate of formation with the Delaware Division of Corporations.
Generally, this form of business structure protects the owner from liability incurred by the entity.
Additionally, setting up an LLC provides a tax advantage: the business itself is not responsible for taxes on its profits, as is the case with a corporation (C Corp). Instead, the owner(s) reports profit and loss on his/her personal tax returns, similar to the tax reporting for a sole proprietorship or general partnership. This is known as "pass-through" taxation. There is no need for the LLC to file a corporate tax return.
Another advantage to an LLC is that there is no residency requirement. LLC owners do not need to be U.S. citizens or permanent residents.
A less monetarily tangible but still valuable function of the LLC is that it provides enhanced credibility to prospective partners, customers, suppliers and lenders who might look more favorably on your business when you've formalized your business structure with an LLC.
This is a corporation that elects an "S" status with the U.S. government for federal income tax purposes. An S corporation (S corp) is quite similar to an LLC in that it offers a federal tax status that enables companies to "pass through" their taxable income or losses to owners/investors in the business, according to their ownership stake in the business.
By electing S corporation status, a company can eliminate the disadvantage of "double taxation" of corporate income and shareholder dividends associated with the C corporation tax status.
Here is an illustration: If an S corporation makes US$300000 in a given year, the business itself would not be taxed for that amount. Instead, company shareholders would be required to pay taxes according to their percentage of ownership of the company. In this scenario, if the company has three shareholders, each with an equal share of company stock, each shareholder would owe taxes on US$100000.
On the other hand, if a C corporation makes US$300000 in a year, the company would pay taxes at the current federal corporate tax rate of about 34%. If the remaining profits of US$198000 are distributed to the three shareholders as dividends, each shareholder will pay taxes on US$66000 in dividend income at the current federal dividend tax rate of 15%.
The S corporation offers these advantages over the C corporation:
- Limited liability: Directors, officers, shareholders, and employees enjoy limited liability protection.
- Pass-through taxation: Owners report their share of profit and loss on their individual tax returns.
- Double taxation elimination: Income is not taxed twice (as corporate income and again as dividend income)
- Investment opportunities: The company can attract investors through the sale of shares of stock.
- Perpetual existence: The business continues to exist even if the owner leaves or dies.
- Once-a-year tax filing requirement: The company only files once a year, versus quarterly for a C corporation.
The most common type of corporation in the U.S. is the C corporation (C corp). By forming a C corporation, business owners create a separate legal structure that shields personal assets from judgments against the company. The structure of a C corporation includes shareholders, directors, and officers.
Other advantages of a C corporation include:
- Limited liability: Directors, officers, shareholders, and employees enjoy limited liability protection.
- Unlimited growth potential: A C corp can continue to grow through the sale of stock.
- No shareholder limit: C corps do not have to limit the number of shareholders; however, once a company has US$10 million in assets and 500 shareholders, it is required to register with the SEC under the Securities Exchange Act of 1934.
- Tax advantages: There are certain favorable tax implications for a C corp, including tax-deductible business expenses.
- Perpetual existence: The business continues to exist even if the owner leaves or dies.
- Enhanced credibility: C corporations typically engender greater credibility among suppliers and lenders.
There are also disadvantages to forming a C corporation:
- Double taxation: Profits are taxed when earned and taxed again when distributed as shareholders' dividends.
- No loss deductions allowed: Shareholders in a C corporation cannot deduct corporate losses.
To avoid these drawbacks, many small business owners choose to form an S corporation instead.
Next Steps to Forming your New Entity or Registering your Entity with the State of Delaware
Once you have determined the best entity type for your business, there are several steps you need to take to form or register the entity in Delaware. You can either create a branch office in the state, or form your new entity in the state. Although both options are valid, few non-U.S. companies opt to create a branch office. Most prefer to form a Delaware entity.
Create a Branch Office in Delaware
To create a branch office in Delaware you will need to file a Certificate of Existence that is dated within the past six months and a Qualifying Certificate with the state of Delaware.
You will also need to have a Registered Agent to serve as the address where all legal and tax documents can be received on behalf of the business organization.
Form a New Entity in Delaware
Form a Delaware Limited Liability Company (LLC)
To form a Delaware LLC, you will need to file a Certificate of Formation with the Delaware Division of Corporations. You will also need to appoint a registered agent in Delaware to serve as the address where all legal and tax documents can be received on behalf of the business organization.
incorporate.com (TCC) can help you complete and file your Certificate of Formation. TCC also serves as a registered agent in Delaware and all 50 states.
Most LLCs also create an Operating Agreement which sets forth the roles, rights and responsibilities of the owners and managers of the LLC. This document is for internal use only and does NOT need to be filed with the State of Delaware. (TCC can provide you with a draft Operating Agreement.)
Form a Delaware Corporation
To form a Delaware corporation, you will need to file a Certificate of Incorporation with the Delaware Division of Corporations. You will need to include the names of your company's directors and the stock structure in this document. Most corporations also have bylaws which provide for the governance of the corporation. (TCC can provide a template for you to customize.)
You will also need to appoint a registered agent in Delaware to serve as the address where all legal and tax documents can be received on behalf of the business organization.
TCC can help you complete and file your Certificate of Incorporation. TCC also serves as a registered agent in Delaware and all 50 states.
Doing Business in Delaware and the U.S.
Once you have formed your business entity, you must complete the following steps so you can operate your company in Delaware:
- Obtain an Employer Identification Number. The Employer Identification Number (EIN) is issued by the U.S. government and is unique to every business. You need an EIN to open a bank account in the U.S. The EIN is also used to file taxes with the U.S. Internal Revenue Service (IRS), as well as all state and local taxes. incorporate.com (TCC) can help you obtain an EIN.
- Open a U.S. Bank Account. The regulations to open a U.S. bank require that you visit the bank in person and provide the bank with information about the business. Banks also require the accountholder's name, a U.S. address, and the company's Employer Identification Number.
- Obtain a Delaware business license. Every company that does business in Delaware needs a business license. Depending on the type of business, additional licenses may be required. incorporate.com (TCC) can help you to identify the business license(s) that you need, and complete and file the necessary documents.
If you plan to do business outside of Delaware, you will need to complete these steps in each of the states where you will be doing business:
- Qualify or register your business. You will need to comply with the bureaucratic and tax requirements of each state in which you do business, and you will need to make annual payments to stay in compliance with each state's requirements.
- Appoint a registered agent. You will need a registered agent to serve as the address where all legal and tax documents can be received on behalf of the business organization in each state where you do business.
- Obtain a business license. Different states have different business license requirements. Your company will need a business license for each state in which it operates.
incorporate.com can also make referrals to professionals in Delaware to help you launch your operations, including legal, marketing, administrative and financial services.
Services to Help You Form Your Delaware Company and Stay in Compliance
For more than 100 years, incorporate.com has formed entities in Delaware and helped them stay in compliance.
Here's what incorporate.com will do for you:
- Complete and file the necessary documents to form your Delaware Corporation or LLC, or Register your Indian company in Delaware, so that you can open a branch office.
- File an annual report for your company with the Delaware Division of Corporations so your company remains in good standing with the State of Delaware.
- Serve as your Registered Agent in Delaware (and every other state where you do business).
- Provide draft bylaws for your corporation.
- Provide a draft certificate of incorporation for your corporation which will list the total number of authorized shares.
- Provide draft operating agreement for your limited liability company.
- Identify and file all of the business licenses that your company requires.
- Complete and file the documents needed to business in states other than Delaware.
Other Services Offered by incorporate.com
501c Nonprofit Status
501(c) is a tax law provision granting exemption from the federal income tax to nonprofit organizations.
Annual Report Prep & File Service
Save time, cut expenses and protect your company's good standing with Annual Report Preparation & Filing services.
Bank Account Resolutions (Written Consents)
Corporations and LLCs can authorize one or more designees to open and manage the company's bank accounts. We can offer a written resolution that customers can provide to their banks and store with their company records. You simply provide us with the names of the authorized signers.
Business Licenses & Permits
Don't ignore the important business license, permit, and tax registration requirements for your business. Our Business License Compliance Package helps you identify the applications for your location and industry.
Bylaws & Operating Agreements
Get help creating the internal documents that govern your business. incorporate.com offers corporate bylaws in more than 40 states or an LLC operating agreement in any state.
Certificate of Good Standing
Verify your company's status with the Secretary of State today by ordering this certificate. Banks, lenders, and investors often request these certificates as proof of good standing.
Need a copy of documents your company has filed with the Secretary of State? We can help you order a copy of any document on file, certified with the Secretary of State's seal or signature.
Closing a Business (Dissolution)
If you need to close your business, state governments require additional filings and fees. We can help you with the dissolution process.
Company Management & Ownership Changes (Written Consents)
Corporations and LLCs can update their internal records by creating resolutions (called written consents). We provide several different types of written consents for your company including changes to directors, members, and managers.
Company Name Changes (Amendments)
We can help you change information listed on your corporation or LLC formation documents. Businesses commonly file amendments to change their name, purpose, address, or initial management.
Changing your business from an LLC to a corporation (or vice versa).
Corporate & LLC Compliance Kits
Don't be left without the important tools your business needs. Our compliance kit includes a personalized, zipper-bound binder, stock or membership certificates, and a company seal.
Doing Business As (DBA) Names
If you do business under a name other than your personal, corporation, or LLC name, governments may require you to complete a "Doing Business As" filing. We can help you with this process.
Employer Identification Number (EIN)
Corporations, multiple-member LLCs, and any business that hires employees must obtain an EIN through the Internal Revenue Service (IRS). Let incorporate.com apply for your new EIN.
Delaware Tax E-Filing
Need help filing your Delaware annual reports and paying franchise taxes? This filing assistance program can help you maintain your company's good standing in the state of Delaware.
LLC Tax Status Election – Form 8832
By filing Form 8832 with the IRS, you can choose a tax status for your entity besides the default status. According to your objectives, you can elect to have your LLC taxed as a sole proprietorship, partnership, C Corporation or S Corporation. In some cases, by changing its tax status, a company can save thousands of dollars in taxes each year.
Delaware and Nevada companies can establish a private mailbox with our Mail Forwarding Service. incorporate.com will forward your business mail to any state in the U.S. and to other countries.
Register in Additional States (Foreign Qualifications)
If you conduct business in multiple locations, you may need to register in more than one state. incorporate.com can help you register to do business in any state or the District of Columbia.
incorporate.com can help restore your company to good standing after it has been voided or dissolved by the state for failure to satisfy its good standing requirements.
S Corporation Election – Form 2553
In order to enjoy the best-possible tax savings for your business, you need to have the right tax classification. Many C Corporations and LLCs elect to file for S Corporation status because of the advantages this classification provides their businesses.
Frequently Asked Questions About Incorporating in the U.S.
Can I form a U.S. company if I don't live in the US?
Yes, a foreign person can form a corporation or LLC in the United States of America. In many states, one person can hold all corporate positions and titles, including director, president, secretary and treasurer. That person or persons need not be residents of the United States and can conduct business from outside of the United States. In some states, you may need to provide certain information about your company's owners prior to incorporating or forming your business.
How long does the formation process take?
The actual turnaround time depends on the state in which you are filing. Our process is as follows:
- We help complete the state required forms, send them to you for review, and submit the forms to the Secretary of State. Normally this is done within 24-48 hours of your order being placed. If your signature is required on the documents, we will email the documents to you and arrange for your signature. Some states permit online formations without signatures. In some instances, we may need to verify your personal information, or the information of the directors of a corporation or members of an LLC before forming the entity.
- The documents are filed in the state offices of the Secretary of State or equivalent filing offices. The turnaround time varies from state to state.
- Once the Secretary of State issues evidence of filing, we will review the documentation and email you an electronic copy of the evidence.
Should I form my company in Delaware?
Delaware's flexible business entity laws, court systems, and business-friendly state government have made it one of the most popular states in which to form a business. Learn more about the benefits of forming a company in Delaware.
Should I form a Corporation or an LLC?
To get the most out of your small business, it is important to choose the right structure for your business. Selecting the right type of company for your new business helps maximize your chances of financial and operational success. The two most popular business structures are:
- Independent legal and tax structures separate from their owners
- Help separate your personal assets from your business debts
- No limit to the number of shareholders
- Taxed on corporate profits and shareholder dividends
- Governed by applicable business corporation statutes, formation document and bylaws
Limited Liability Companies (LLCs)
- Independent legal structures separate from their owners
- Help separate your personal assets from your business debts
- Taxed similarly to a sole proprietorship (if one owner) or a partnership (if multiple owners)
- No limit to the number of owners
- Governed by LLC statute, formation document and LLC operating agreements
What if I have questions after my Company is formed?
incorporate.com provides unlimited phone and email support. You can contact us by calling
+1-302-636-5440 between the hours of 12:00 New York Time and 24:00 New York Time, Monday through Friday. You can also contact us through email by using our online contact form.
Are there regulations to follow after my Company is formed?
Yes. You will need to comply with federal and state tax filing rules.
If you form a Corporation, your business may need to obtain business licenses and permits, and an Employer Identification Number (EIN). In addition, corporations must file periodic reports with the state's corporate filing office. To ensure your business remains in compliance, it is recommended that you keep a corporate records book containing the formation document and bylaws, stock records, and minutes of shareholders' and directors' meetings.
If you form an LLC, after the LLC formation document is filed and an operating agreement is in place, it is recommended that you set up an LLC bank account, complete any initial financial transactions, and inform the Internal Revenue Service (IRS) if your LLC chooses corporate taxation.
Failure to comply with filing requirements may result in out of pocket costs in penalties and fines, and, in certain cases, forced closure of your business. With the Compliance Alert Program from incorporate.com, you'll never have to wonder whether your corporation or LLC is in compliance.
Can you provide a U.S. mailing address?
incorporate.com offers regular mail forwarding service in Delaware. Corporations and LLCs that use incorporate.com registered agent services can purchase this service.
International Mail Forwarding Service is US$275 annually. This package includes international delivery of unlimited letter mail received in Delaware. We will forward unlimited letters by first-class mail at the end of each business week. Our service does not include packages, express or bulk mail, or magazines.