The USA does not have the reputation of a low-tax jurisdiction. However, you can have the same conditions for your business here as in any popular offshore destination! The main thing is to correctly choose the state as not all of them are good for foreign businesses. Delaware is one of the states that has created a beneficial legal framework that attracts entrepreneurs from all over the world. Asset protection and privacy of beneficial owners are on a sufficiently high level, and the high reputation of the jurisdiction is beyond any doubt, which may be a serious advantage for your business.
Welcome to our portal where you will find a more detailed article on Delaware LLC formation. You may explore other US states or even other jurisdictions that are recommendable for company establishment as we write a lot about international business. You can also get in touch with our expert to discuss the prospects of company setup in Delaware and any challenges that may arise on the way – this is free! We can also provide assistance with company registration in Delaware on a turnkey basis at a moderate fee, so you will be able to delegate all the administrative procedures to us and concentrate on your business.
Delaware Company: Main Benefits
Let’s see what other advantages you will have by setting up an offshore company in Delaware (in addition to enjoying the legal status of a US company):
- An offshore LLC registered in Delaware will make it possible for you to actually operate tax-free without being registered in traditional offshore jurisdictions
- The legal framework that regulates business is clear and consistent, and it is more advanced and flexible than in other states
- Delaware is the best state for those who register a startup as the setup procedure is straightforward and you are not liable for tax on intangible assets
- The local laws ensure strict compliance (which protects the businesses), on the one hand, and do not restrict business freedom and confidentiality, on the other hand.
Looks promising? Click on the above link to ask us any questions.
Taxes Payable by a Delaware LLC
First of all, we strongly recommend that you discuss all the tax issues with our specialist. The situation is a little complicated here, and you know that the USA is a country that treats taxes extremely seriously.
LLC members have the same limited liability as the corporation shareholders. However, the income of an LLC is taxed at the company members’ level (as in partnerships). As a result, a Delaware LLC is tax-exempt in the majority of cases and no annual tax return is required to be filed. A USD 300 franchise tax is payable by LLCs on an annual basis, though.
If we get deeper into the matter, the situation becomes much less clear. We will not discuss everything here, but it is important to note the main points for business owners.
LLC status for tax purposes:
- Disregarded entity (tax-exempt) if an LLC has one member only
- Partnership if an LLC has several members
- Corporation by application of the LLC or decision of the IRS
Let’s look at each status in detail:
- Disregarded entity. You will need to file a 1040NR form (and you are not required to do that if no profit is generated and you only use your personal property to carry out business). Sometimes (but not in all cases!), individual income is not subject to US taxation. The criteria of a foreign member are not that easy to set as not only laws but also legal practices should be analyzed.
- Partnership. You will need to report to the IRS using Form 1065. In addition, you will need to attach a K-1 form for each member to the tax return (Form 1040NR). Each member will have to pay the following taxes: 37% (effective related income) or 30% (other FDAP income paid by the company.
- Corporation. You will pay a federal tax (21%).
Sounds complicated? Get in touch with our advisors to clarify any issues.
LLC Incorporation: Procedure
Let’s look at the standard steps you will have to take to incorporate an LLC in Delaware:
- First of all, you will need to choose a name. It should be unique, and the words bank or trust are prohibited. If you indicate in any way that you carry out insurance business, you will need a license. Add the abbreviation LLC or the full version (Limited Liability Company) to the name. Needless to say, you are not allowed to use obscene or racist language.
- Decide how many members your offshore LLC will contain.
- Draft an operating agreement to set out the rights and obligations of each company member.
- Appoint a registration agent to be the representative of your non-resident Delaware LLC.
- Receive an Employer Identification Number (EIN).
Your LLC has been registered? Congratulations! You will now need to set up an account with a US bank. Please get in touch with us to receive help with suitable bank selection and opening a corporate account. Take advantage of our free advice on setting up a personal or corporate bank account with a bank or a payment system.
Best US State for LLC Incorporation
The most popular states for company registration are Delaware and Nevada, but there are some differences between these two. Let’s take a close look at Delaware’s benefits:
- General Corporations Law limits the liability of directors and officers, ensuring smooth business operation.
- You are not required to prepare or submit an annual report.
- Companies are not required to pay an income tax if the business operations are carried out outside the state.
Incorporate Your Delaware LLC Online!
You will not need to fly to the USA to set up a company there: we will do it for you remotely! Here are the steps that need to be taken:
- Contact our professionals to describe your situation to them. We have to make sure we can help you and you will benefit from company registration in Delaware – otherwise, we will propose another solution.
- If everything is fine at the first step, pay the cost of our services (by bank card, PayPal, or Bitcoin).
- Collect the documents required to register a Delaware LLC.
Click on the above link to read more details or contact our expert to get your fully functional Delaware company in no time!