The United States commands the business world with its reputation. Thus, having a company in the United States opens avenues for trade with the major countries of the world. Among all the states of North America, Delaware tops the list because of its business-friendly environment. The jurisdiction offers numerous benefits that attract investors and entrepreneurs from all over the world for offshore company setup.
If you are looking for company registration in Delaware, this blog will cement your decision to go ahead. So let’s discuss the benefits that this state offers to firms.
Benefits of Delaware Company Formation
There are numerous benefits of setting up your business in Delaware. Let’s understand each in detail:
Tax Benefits
Any entrepreneur sets up a firm in another jurisdiction to obtain tax benefits. Delaware offers numerous tax exemptions to businesses. First, there is no state sales tax in Delaware. This allows businesses to sell products or services without charging anything extra. Another benefit of having no tax is that it helps with maintaining competitive pricing for customers. The lack of tax also simplifies financial and tax reporting obligations for firms.
Second, aside from the state tax, there is no tax on intangible assets. Now, intangible assets refer to intellectual property such as trademarks, patents, copyrights, and so on. No tax on intangible assets makes Delaware a hotspot for IP holding companies.
Third, there is also no personal income tax for non-residents. Thus, you do not have to pay anything on the income you earn and can reinvest the entire revenue within the business for expansion.
Court of Chancery
The Delaware Court of Chancery is a highly respected and specialized court known for its expertise in corporate and commercial law, making it a primary reason for many companies to incorporate in Delaware. It functions as a court of equity without the juries, meaning cases are decided by judges who provide detailed, scholarly opinions and have deep expertise in corporate law and business matters. Moreover, the court of chancery is recognized worldwide for its credible judgments, and even the rulings are cited across the court for their fairness.
Structural Flexibility
Delaware offers considerable flexibility for structuring a business entity. There are numerous business structures you can choose from, such as limited liability company, C-Corp, limited partnerships, and so on. Moreover, Delaware’s corporate statutes are highly flexible when it comes to corporate governance, allowing significant freedom in determining the composition, powers, and management structure of the board of directors. Aside from this, there is also flexibility in choosing a taxation criterion of the firm. For example, a Delaware LLC has the flexibility to opt for pass-through taxation. It gives the firm the ability to choose the manner of taxation, i.e., whether they prefer to be taxed as a corporation or a partnership.
Privacy Protection
Delaware offers immense privacy to investors and entrepreneurs. Thus, while filing the certificate of incorporation, you don’t have to disclose the details of the directors and officers. This allows you to keep your personal information confidential and discreet. However, the law requires you to disclose if the authorities ask for it.
Investor Appeal
Delaware is an investor’s hub. Aside from this, Delaware’s entrepreneurial reputation is recognized worldwide. This makes it easier to attract angel investors and venture capital funding, as they are willing to fund a Delaware-incorporated firm.
Foreign Ownership
There are no restrictions on foreign ownership in Delaware. Meaning, a foreign national can easily own an entity there and operate worldwide. Aside from this, there is no requirement for a US address, citizenship, or visiting.
International Trade
Through your Delaware LLC, you can easily trade internationally, as there is no restriction on cross-border trade. However, there are restrictions on trading domestically for offshore firms.
Having a firm incorporated in Delaware offers numerous advantages, as mentioned above. It opens up the possibilities for global expansion with the certified reputation of the United States as the backdrop. However, for first-time entrepreneurs, navigating the legalities, such as choosing the right company structure, can be especially tedious. In such cases, it is best to hire an offshore business consultant who edify and guide you in making the right decision.
