General Guide to Company Incorporation in Delaware
Updated on Thursday 01st April 2021
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Delaware is the preferred American state for company incorporation because of the numerous benefits the foreign investors have there. The easy process of registration and all kinds of tax benefits make foreigners choose Delaware for doing business, whether conducted on a local plan or from abroad. Persons who want to open a company in Delaware may address our specialists in company formation in USA. We also invite you to take a look at our general guide for company incorporation in Delaware, where we present you the main aspects related to doing business in this state.
The minimum share capital for opening a company in Delaware
Limited liability companies are the preferred business entities in Delaware for entrepreneurs in America, whether as local business persons or from overseas. One of the main benefits of such form of business is that there is no need for a minimum share capital deposited when starting a business in Delaware.
Conditions for company formation in Delaware
Persons who want to create a company in Delaware can choose to set up an LLC with the Division of Corporations which issues the certificate of incorporation. Additionally, we mention that an LLC can be established by at least one shareholder, just like in the case of a sole proprietorship. It is though recommended to have at least two shareholders when setting up an LLC in Delaware. Also, please consider that your company in Delaware must have an appointed registered agent who can be the company itself or a partner of the business.
No VAT for companies in Delaware
One of the main and appreciated benefits which come with company incorporation in Delaware is that particularly in this state there is no VAT imposed, therefore, you can set up the company without having to register for such tax, as most companies in the world do.
Opening a bank account for your company in Delaware
Companies can open bank accounts in Delaware, but it is not mandatory if it regards a foreign branch with a settled bank account in the home country. But if you would like to open a bank account in Delaware, you must prepare copies of the company’s documents, like the memorandum of association, the certificate of incorporation, and also the certificate of good standing. Banks in Delaware may also solicit other types of documents, certified or legalized.
Hiring staff for your company in Delaware
As a foreigner who wants to start a business in Delaware, our company formation agents in USA suggest you ask for the services of a recruitment company in the state. These can provide the necessary workforce for your business, in accordance with your requests, and furthermore, your human resources department can make the research accordingly. Please talk to our agents for more details about company formation in Delaware.
Salaries in companies in Delaware
Once you have registered your business in Delaware, you should consider the requirements regarding the minimum wage established by the law in the state. As it is known, each position in the company is subject to a different kind of salary. You should also consider that the average salary in Delaware is $52,000 per year, but it may vary.
Opening a website for your company in Delaware
Foreigners with companies registered in Delaware must consider linking their activities to a website. Even if a website already exists, one must consider translating it into the English language if this option is not available, and moreover, it is suggested to update the company’s services and activities, including the ones offered on the American territory.
A virtual office for your business in Delaware
Entrepreneurs who do not want to rent or buy an office for their company in Delaware have the possibility of obtaining the services of a virtual office in Delaware. We also mention that our consultants can provide such services on request.
Income tax for companies in Delaware
Another advantage when starting a business in Delaware is that there is no income tax if the company does not perform activities in that state.
Why open a company in Delaware
Delaware is known as a corporate haven, alongside Wyoming and Nevada. The General Law Corporation of Delaware is advantageous and flexible for companies registered here. Additionally, one of the reasons why you should start a business in Delaware is that the main office can be anywhere in the world, as the shareholders are not obliged to run the business in the state.
Creating a foreign LLC in Delaware
Companies registered in Delaware can activate in foreign countries under specific conditions like obtaining the Foreign Qualification for operating the activities in those states. This type of document is also known as the Certificate of Authority and it is issued as soon as the new business has a physical address. This means that a Delaware franchise can be established anywhere in the world. Applying for EIN - the Employer Identification Number is mandatory for these companies, and the Internal Revenue Service or the IRS is the institution in charge of issuing the necessary certificates and the tax ID. Being a franchise LLC, this means that a yearly report is needed and this is called Franchise Tax Report for which you’ll need to pay approximately USD 300.
Do I need a business license in Delaware?
Yes, companies in Delaware will have to provide the necessary licenses and permits before running the activities in this state. Here is what you need to know about the licenses and permits in Delaware:
- The seller and reseller permit, the health permit, and the building permits are needed.
- The home occupation permit and the signage permit need to be obtained.
- The business operation license or the business privilege license is necessary for your Delaware LLC.
- Delaware Division of Revenue issues the business license for domestic and foreign investors in this state.
- Delaware One Stop Business Licensing and Registration Service issues the mandatory licenses and permits for running the activities in this state.
If you are interested in company incorporation in Delaware, we recommend you to get in touch with our team of company formation representatives in USA and find out detailed information.
Can I create an offshore in Delaware?
Yes, if you are looking for a proper business climate and an appreciated offshore destination in USA, you can choose Delaware for business and respect the conditions imposed in this matter:
- A Delaware offshore can be established under the rules of a limited liability company.
- Local and foreign entrepreneurs can choose Delaware for creating an offshore.
- A Delaware offshore can be established by at least one stockholder.
- The Articles of Association are the needed documents for such a business entity.
- Just like any other company, a Delaware offshore needs a bank account.
- An offshore in Delaware needs a representative agent appointed by owners.
- The minimum share capital for an offshore in Delaware is not imposed.
In terms of benefits, Delaware offshore companies are preferred for many reasons, such as 100% ownership, no restrictions for the number of shareholders, complete privacy, minimal costs for incorporation, and a fast registration within a few days. If you are a foreign entrepreneur looking for company formation in USA, including Delaware, you can solicit the support of our agents who can run through all the formalities in agreement with your business needs. Instead of wondering about the complexity of company registration in Delaware, it is best to get in touch with our team specialized in company incorporation in Delaware and let us handle the paperwork and other requirements.
A short guide for company formation in Delaware
Entrepreneurs interested in Delaware corporation formation should know that the registration formalities are quite simple. We present you a short guide that can help you open a company in Delaware in a fast and reliable manner:
- Decide on the corporate name – Words like “company”, “incorporated”, “club”, “corporation”, “limited”, or society” are permitted for the formation of the business name of the company in Delaware. Abbreviations are also accepted. Once the business name is selected, a verification is required with the Delaware Secretary of State.
- Prepare the documents – The Certificate of Incorporation or the Articles of Association must be filled and submitted to the same institution mentioned above. Online filling is also permitted, yet you can discuss with our agents for support.
- Appointing the registered agent – This is another essential step in company formation in Delaware. A registered agent can be a person or another company with residency in Delaware as the main requirement. Our agents can act as representatives for your business in this state.
- Preparing the internal corporate document – Bylaws represent the internal corporate document with information about the standard rules of the company. There is no obligation for having such documents, however, these might be used for creditors and banks verifications. Bylaws are kept at the main business office in Delaware.
- Open a bank account – If you want to start a business in Delaware you should open a bank account related to the company. All the financial transactions can be made through this bank account. Make sure you choose the right type of bank, in accordance with the needs of your future business.
- Register for taxation – When creating a company in Delaware, tax registration is required. The EIN or the Employer Identification Number is issued by the IRS (Internal Revenue Service) and shows that your business in Delaware is a taxpayer. One of our company formation agents in USA can assist you throughout the registration formalities.
- Obtain the business license – Activities in Delaware cannot commence without a business license. This is issued by the Delaware Division of Revenue. In some cases, local business licenses are solicited, depending on the city or county the company is incorporated. This is another topic covered by our agents.
- Obtain the company seal – You can start the activities of your business in Delaware if you obtain the company seal. The procedures in this matter can be discussed with our agents in USA.
These are, in large lines the main requirements for company incorporation in Delaware, reminding that each step can be managed in a professional manner by our company formation specialists in USA. Delaware is a great destination for business, yet you need to observe the regulations and respect the registration conditions. Talk to us and discover how we can help.
Investing in USA
USA was the second-largest investor in the world in 2019 and continues to present confidence among international entrepreneurs who want to expand their business portfolios. There is no doubt that USA is great for business in all sectors and all states. Most investments that come from countries like Germany, Canada, UK, France, and Ireland are absorbed by sectors like manufacturing, trade and maintenance, financial, and insurance. The quality of business is excellent in USA and allows the fast registration of companies without any complicated formalities. Delaware, for example, is a generous state from a business point of view because there are many advantages, among which, the ones related to taxation. Offshore companies are permitted in Delaware, and many foreign investors already enjoy the benefits of owning such businesses in this American state. Referring to facts and figures, the following are quite interesting and highlight the business and economy direction of USA:
- The 2020 Doing Business report ranked USA 6th out of 190 worldwide countries for the simplified business process.
- More than USD 9,465 billion represented the total FDI stock for USA in 2019.
- The attraction for greenfield investment was reflected by the total value registered in 2019: nearly USD 102 billion.
- More than 40% of the foreign investments in USA in 2018 were absorbed by the manufacturing sector, followed by the financial and insurance with more than 12%.
FAQ about company formation in Delaware
1. Do I need to travel to Delaware to open a company?
No, there is no obligation for foreign investors to come to Delaware for business incorporation. As soon as you decided for the wanted business structure, let our company formation representatives take care of all the formalities. Delaware corporation formation can be discussed with our team.
2. How do I verify if the business name is available?
Delaware Secretary of State provides support whether online or at the local offices for investors wanting to check the available business names. It is important to know that the company name must end with LLC, L.L.C. or Limited Liability Company, as a mandatory business request in this state.
3. Do I need a registered agent for My LLC in Delaware?
Yes, your business needs to have a local representative agent who can act on behalf of your company. You can talk to our agents for support in this matter.
4. What is the minimum share capital for companies in Delaware?
There is no need for a minimum share capital to be deposited for your business as there is no such condition imposed. This is an important advantage considered by international investors.
5. Can I open an offshore in Delaware?
Yes, it is quite easy to register an offshore in Delaware, mentioning that you need to form and incorporate a limited liability company first. Complete privacy is offered by offshore companies registered in Delaware.
For a better understanding of the company incorporation in Delaware, please get in touch with our team of experts in USA and discuss further details.