If you’ve ever wondered why Delaware is a great option for registering startups and businesses, then this guide is for you. In this article, we answer the question: “Why Incorporate in Delaware as a foreigner?”
Why incorporate in Delaware as a Foreigner?
Delaware is a state in the US that has positioned itself as an incorporation hub. More than 67% of the fortune 500 companies and over 1.5 million corporations are registered there. Here’s why:
- Simple to set up and even easier when you incorporate with Norebase
- Income taxes are not imposed on non-residents who choose to incorporate an LLC
- Delaware companies that operate outside the state are not mandated to pay corporate taxes
- It is easier to attract international investors with a Delaware C-corp
- Shareholders do not have to pay tax on shares in the state
What are the requirements for registering in Delaware as a non-resident?
Here are some requirements and things to consider before setting up a company in Delaware.
Type of corporation
The first thing to consider is the type of company you want to create. There is an option of registering your business as a limited liability company (LLC) or a C corporation. A third option, known as “S corporation”, also exists; however, it is limited to residents and citizens. LLC is usually recommended for small businesses, and the C corporation is better suited for startups that might want to attract foreign investors.
Your company’s name should be unique, meaning you should ensure that your selected business name isn’t used by another company. Hence, it is advisable that you conduct a name search before registering your company. However, you won’t have to worry about running a name search by yourself if you incorporate your U.S company with Norebase.
An address where the company carries out business. This can also be an address outside the US.
Details of the Business owner/Directors/Officers
If you are incorporating an LLC, the details of the owner are required; however, for a C corp, you would need the details of the directors and officers like the president, secretary, or treasurer.
What do you get when you incorporate in Delaware as a non-resident?
As a result of its business-friendly environment and comparatively lower tax rates for businesses, Delaware is a top choice for foreigners looking to set up and incorporate companies in the US. Here’s what you should expect when you register a Delaware company.
1. Registered Agent
An agent is a person who is authorised to receive legal documents and other correspondence on behalf of the corporation and helps to keep your business compliant. When incorporating your company in Delaware, you need the services of a registered agent, also known as a statutory agent. It is crucial that this agent is a resident of Delaware.
2. Employer Identification Number (EIN)
An EIN is needed by the Internal Revenue Service (IRS) to identify companies for payroll and tax purposes. It is also required to open a bank account. Individuals with a Social Security Number can get an EIN easily. However, as a foreigner without one, you would have to follow a specific protocol. Alternatively, you can simply incorporate with Norebase and get your EIN from anywhere in the world.
3. Corporate bank account
It is necessary that you get a U.S bank account while incorporating your business in Delaware. This is because you will need a bank to facilitate receiving payments in the U.S. You have the option to own an account with a traditional bank, but it is mainly recommended to operate a Neo bank account.
This financial institution is different from the conventional bank because they operate outside a brick-and-mortar model. They primarily function online without physical branches. However, their operations are similar to what a brick-and-mortar bank does. Neobanks like Mercury or Levro simplify business transactions for companies set up remotely in the U.S.
Whether you are a non-resident or resident in the United States, Delaware has proven to be the hub for easily registering and running your startup or business. So it is only fitting that you incorporate in Delaware with as much ease.Click here to learn how to register your company in Delaware easily