Company registration in Delaware

Registering an IT company in Delaware, USA, offers entrepreneurs numerous opportunities for growth due to several key advantages. First, Delaware is renowned for its flexible and business-friendly legal system, which provides investors with strong asset protection and privacy. The state has a specialized court—the Court of Chancery—that focuses on corporate disputes, ensuring quick and predictable conflict resolution.

The state also boasts a favorable tax environment. Non-residents who do not operate within Delaware or own assets there can benefit from a zero tax rate, reducing financial burdens. This is particularly helpful for startups looking to minimize early-stage expenses.

A simple and fast registration process, which can be completed remotely without needing physical presence, makes Delaware an excellent choice for international IT companies seeking a stable base to enter the American market or expand globally.

Choosing a business structure in Delaware

Foreign nationals who are not U.S. residents cannot own an S Corporation. If you are considering setting up in Delaware, you will need to choose between two other types: LLC or C-Corporation:

• S Corporation: A structure that avoids double taxation by passing income, losses, and other tax items directly to shareholders, who report them on their tax returns.
• C Corporation: A separate legal entity owned by shareholders. They are protected by limited liability, meaning personal assets are not at risk for corporate debts. C-Corporations face double taxation: once at the corporate level and again when dividends are paid to shareholders.
• Limited Liability Company (LLC): This type of company combines the features of a corporation and a partnership. LLCs can have members who are individuals or legal entities, including foreign companies, making them flexible and convenient for many entrepreneurs.

Why an LLC is the best option for Delaware?

LLCs avoid double taxation. Profits are not taxed at the entity level but passed directly to members, who pay taxes individually. Additionally, Delaware does not impose federal or local income tax on LLCs. Legislative requirements for LLCs are flexible. Owners can manage the business themselves or appoint a manager; there is no need to form a board of directors or hold annual shareholder meetings.

These factors and a favorable tax environment make LLCs an ideal choice for entrepreneurs.

Requirements for Delaware business registration

To set up a company in Delaware, future owners must comply with certain rules:

1. An LLC must have a physical address, not a PO box.
2. A registered agent is required within Delaware.
3. No mandatory requirements for minimum capital. A suggested amount is $1,000.
4. Nationality & residency of founders does not matter.
5. LLCs can engage in any lawful business within state.
6. There is an option to involve nominee members for LLCs.
7. After registration, founder must provide a Certificate of Incorporation to the Secretary of State.

Delaware’s lenient requirements for LLCs contribute to the popularity of this business structure.