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, providing investors with strong asset protection and privacy. The state has a specialized court—the Court of Chancery—that focuses on corporate disputes, ensuring quick & 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 zero tax rate, reducing financial burdens, which is particularly helpful for startups looking to minimize early-stage expenses. A simple and fast registration process, which can be completed remotely without the need for physical presence, makes Delaware an excellent choice for international IT companies seeking a stable base to enter the American market or expand globally.

Benefits of business in Delaware with Finevolution

• Full company registration within agreed time frames
• Assistance with opening a bank account
• Post-registration maintenance
• Accounting & legal support

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): Combines 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, and there is no need to form a board of directors or hold annual shareholder meetings.

These factors, along with 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.

Steps to register a company in Delaware

• Initial consultation with Finevolution experts to determine the structure.
• Approving name and providing documents of founders.
• Preparing documents (Articles of Organization, Operating Agreement, Minutes of the organizational meeting) and completing registration.
• Obtaining an Employer Identification Number (EIN).
• Opening a bank account or setting up a payment system account.
• Arranging for a legal address for one year.
• Obtaining an Individual Taxpayer Identification Number (ITIN) if needed.

Timeline for company registration in Delaware

The process takes about 35 business days, plus a week for document preparation and filing. EIN processing takes an additional month, and ITINs can take 6 to 8 weeks.

Bank accounts or payment systems for business in Delaware’s

Payoneer is a suitable alternative for entrepreneurs not based in the USA. If you are overseas and plan to set up in America, consider using a payment system account. Payoneer supports USD, EUR, GBP, JPY, CAD, AUD & MXN, with account holders receiving a physical debit card. Account registration typically takes 2-4 weeks.

Important: Experience with Mercury Bank has shown it is always essential to have alternative options.

Taxation in Delaware

Below are basic tax rates for Delaware-registered entities. This includes main types of taxes but is not limited to them, as tax obligations depend on the business’s activities and additional nuances:

Basic Tax Rates:

• Corporate income tax — 8.7%
• Sales tax — 5.42%. More details on Sales tax.
• Franchise tax — starting from $250 annually, based on company type and number of shares.
• Federal corporate income tax — 21%

Federal Individual Income Tax for 2024:

• 11% — up to $11,600
• 12% — $11,601 to $47,150
• 22% — $47,151 to $100,525
• 24% — $100,526 to $191,950
• 32% — $191,951 to $243,725
• 35% — $243,726 to $609,350
• 37% — over $609,350

Reporting and tax filing for Delaware companies

All U.S. LLCs and C/S Corps must file income tax returns or zero returns with the state and IRS, whether business activities have taken place or not. Additionally, once every five years (next in 2028), companies must submit a BE-12 report. From 2024, U.S. companies will also need to file a BOI report, as detailed on the Ukrainian representative’s website.

If you plan to register in Delaware, consider all legal, tax, organizational, and financial aspects. Our team is ready to provide consultations, prepare necessary documents, and handle the registration. Our working hours are 9:00-19:00 from Monday to Friday. Send a request through the form below or a message on Telegram bot/Viber, Whatsapp chat for consultations.