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Delaware Corporation
LLC Formation

Why Delaware

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The State of Delaware is a leading domicile for U.S. and international corporations. More than 2,000,000 business entities, including 67.6% of the Fortune 500, have made Delaware their legal home. Businesses choose Delaware for its complete package of incorporation services, including:

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  • Delaware General Corporation Law: The most advanced and flexible business formation statute in the United States.

  • Delaware Court of Chancery: A unique 220-year-old business court that has written most of the modern U.S. corporate case law.

  • Business-Friendly Government: Delaware’s state government is accessible and supportive of business needs.

 

Key Consideration

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Since January 2017, single-member LLCs with foreign ownership must report the responsible person to the U.S. Internal Revenue Service (IRS).

This information is private and collected to comply with international treaties on tax information exchange.

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ENTITY OPTIONS

 

Corporations and Limited Liability Companies (LLCs):

  • Corporations: Must keep accounting records, file annual income returns, and pay taxes in the United States. Strategies may be available to reduce tax burdens.

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LLCs:

  • LLCs treated as corporations for tax purposes follow the same obligations as corporations.

  • Transparent LLCs are not responsible for submitting annual income statements; the responsibility lies with the member or owner.

  • Single foreign owners with non-U.S. source income are exempt from U.S. taxes.

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Compliance Considerations

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Delaware adheres to international tax exchange agreements, maintaining its inclusion on global "white lists" (e.g., FATF, OECD), while the U.S. has not adopted the Common Reporting Standard (CRS), upholding privacy within the framework of existing regulations.

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Advantages of Incorporating in Delaware

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  • Flexible legal framework: Delaware offers one of the most adaptable corporate statutes in the United States.

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  • Tax benefits:

    • No state corporate income tax for companies not conducting business in Delaware (franchise tax applies).

    • Favorable conditions for entities with complex capital structures or numerous authorized shares.

    • No personal income tax for non-residents.

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  • Privacy and Accessibility:

    • Shareholders, directors, officers, or LLC members are not required to reside in Delaware.

    • Shares owned by non-residents are not subject to Delaware taxes.

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  • Judicial expertise: The Delaware Court of Chancery ensures reliable and consistent legal guidance for corporate disputes.

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