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THE MAIN CHARACTERISTICS OF DELAWARE COMPANY

GENERAL
Type of entity
LLC
Type of law
Common
Shelf company availability
Yes
Our time to establish a new company
2 days
Minimum government fees (excluding taxation)
Varies
Corporate taxation
Fiscally transparent
Double taxation treaty access
Normally No
SHARE CAPITAL OR EQUIVALENT
Standard currency
USD
Permitted currencies
Not applicable
Minimum paid up
USD 1
MANAGERS
Minimum number
One
Local required
No
Publicly accessible records
No
Location of meetings
Anywhere
MEMBERS
Minimum number
One
Publicly accessible records
Yes
Location of meetings
Anywhere
ACCOUNTS
Requirement to prepare
Yes
Audit requirements
No
Requirement to file accounts
No
Publicly accessible accounts
No
OTHER
Requirement to file annual return
Yes
Change in domicile permitted
Within USA only

INTEREST OF THE JURISDICTION

Advantages of a company in Delaware

  • No corporate tax – 0%.
  • Account filing not required.
  • Low incorporation and administration fees.
  • Well-developed legal system.
  • Delaware Corporations are often used for American trading situations.
  • Quick incorporation procedures and readily understandable corporate law.
  • Robust and business friendly banking system.
  • Wide range of offshore services.

Possible disadvantages of a company in Delaware

  • Company ownership is difficult to prove, but the directors of the company can be named in Articles of Incorporation of the company.

PRESENTATION OF JURISDICTION

Delaware is a state in the United States of America, located on the east coast, south of Pennsylvania. The capital of the state is the city of Dover, a major financial center with a developed banking infrastructure. The total area of the State of Delaware is almost 6,5 thousand km², and the population – more than 900 thousand people. The territory of Delaware consists of three districts – New Castle, Kent, Sussex.

A huge number of corporations are registered in Delaware. Entrepreneurs and businessmen are attracted by the prestige of the company’s registration in the US, the simple procedure of incorporation, and, most importantly, the favorable tax regime that minimizes cost of taxation. In addition, the creation of a company in Delaware can be used for business immigration for those who wish to move to the United States.

Legislative power belongs to the General Assembly, which consists of the House of Representatives and the Senate. There are 41 members in the House of Representatives, and 21 members in the Senate. Three representatives of the assembly represent the state in the US Congress. The executive power is headed by the governor, who is elected in elections for a period of 4 years.

There is a Court of the Chancery and the Supreme Court of the State in Delaware. Delaware Court of Chancery examines corporate disputes quickly and effectively within the framework of English common law and its precedents. Corporate legal regulation and the Court of the Chancery, which deals with most of corporate disputes, are factors that favorably influence the flow of investment.

This staff is rightfully considered a corporate center not only in the US, but also in the whole world.

Types of companies and incorporation procedure

The state of Delaware is home to a huge number of companies, there are more than 1 million registered here. What is it that attracts businesses around the world to register their companies in Delaware?

In addition to the favorable tax regime in Delaware, favorable corporate legislation and effective court litigation are effective. Here you can register a corporation, a limited liability company, a limited partnership, not for profit corporations and other corporate entities. However, the most popular are corporations and LLC.

01. Corporation

Corporations are prestigious forms of doing business that offer a number of advantages, including limited liability of participants, existence of the company for a long time, a simple procedure for changing ownership. However, one of the main advantages of the corporation is that the income received outside the United States under certain conditions is not subject to corporate tax.

02. Limited Liability Company (LLC)

The Delaware LLC is a divergent business entity that offers an alternative to partnerships and corporations by associating the corporate advantages of limited liability with the partnership advantage of pass-through taxation. Delaware LLCs may be exempt of federal income tax and income tax return if the following conditions are present: non-resident members; do not run business in the US; non US income source.

As it can be noticed, those conditions are the ones, which are present in offshoring solutions.

Taxation

  • Corporate income tax in Delaware is a tax on profits levied on the common taxable income of most enterprises and corporations registered or operating in Delaware.

    Companies doing business outside state are not subject to corporate income tax. This means that they are not subject to taxation if all company revenues are received outside the United States, are not related to activities in the territory of the country, and all members or members are not the US residents. This allows us to legally correctly use the company in Delaware as an offshore company, although this jurisdiction is not offshore.

  • If these conditions are not met, the tax rate depends on the type of company and place of business and can range from 0 to 43.7%.There is also a fixed annual tax to the state budget, which is just over $ 300.

  • Also, companies registered in the state of Delaware must pay a franchise tax. The amount of the annual franchise tax is 175 or 350 $ depending on the application of the special methods (Authorized Shares method or Assumed Par Value Capital Method).

    Importantly, non-resident companies do not pay sales tax. Also in the state, there is no value added tax.

    Taxation LLC can be made at the level of company participants as individuals, or subject to certain conditions as a partnership or even a corporation.

Banking system and economy overview

Despite the small area, the State of Delaware is among the richest in the United States. Important sectors of the economy are agriculture (dairy products, cereals, livestock), light, chemical, food, automotive industry. Thanks to its geographical location, the coast of the Atlantic Ocean in Delaware attracts both Americans and foreigners to rest. This affected the development of tourism and turned it into an important sector of the economy.

However, due to favorable tax legislation, the financial and banking sector plays an important role in the state economy. Delaware jurisdiction is very beneficial for the registration of corporations and companies, e-commerce, companies operating in the field of information technology, export-import relations. Moreover, Delaware is often chosen as the place of registration of yachts and other vessels. There are many American and international banks and financial institutions In the state capital. This, in turn, also beneficially influences businessmen in choosing Delaware as the place of registration and management of the company.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening