Being recognized globally as a corporate paradise, Delaware is an attractive jurisdiction to set up a business.
Delaware is known for its business-friendly laws and regulations, and these legal and regulatory framework is designed to protect the interests of investors. This stability and reputation make it an attractive choice for businesses and investment.
Benefits of forming a company in Delaware for non-residents
- Business-friendly environment: Delaware offers a predictable and stable legal framework that is favorable to businesses, providing clarity and certainty in corporate matters.
- Privacy and asset protection:this state allows the use of nominee officers and directors, offering a level of privacy and confidentiality for business owners.
- Various corporate structure: the state offers a wide range of corporate structures, including LLCs and several types of corporations. These flexible options allow non-residents to choose the structure that best suits their specific business needs.
- Tax benefits: the state also offers favorable tax treatment for non-residents. For companies that do not engage in business activities within Delaware, there is no state corporate income tax levied. In addition, non-resident shareholders of Delaware companies are not subject to state income tax on dividends or capital gains.
- Credibility: the state is a well-recognized jurisdiction for business formations, and having a Delaware company can enhance a company’s credibility and reputation, especially when dealing with investors and clients.
Delaware Company Incorporation for Non-U.S. Residents
With the exception of residents from certain restricted nations, individuals of any nationality can register a Delaware company and lawfully conduct business worldwide. So registering a Delaware company does not require residency or a visit to Delaware.
Steps to Form a Delaware Company
Non-residents can form a company in Delaware by following these steps:
- Choose a business name
This is the first step in setting up a company in this state. Applicants will select a unique and distinguishable name for the company. This name must comply with Delaware‘s naming requirements.
- Appoint a Registered agent in the state
The next step involves assigning a registered agent who will handle legal and official documentation on behalf of the company. The registered agent who will serves as a liaison between the company and the Delaware Secretary of State, must ensure the timely delivery of important legal documents and notices to the company.
The Agent must also have a physical address in the state, and while their address can be utilized for mail forwarding and virtual office services, it is not permissible to use it as the company’s ‘place of business’.
- File and Submit Certificate of Incorporation
Individuals seeking to form a Delaware company must prepare and file a Certificate of Incorporation with the Delaware Division of Corporations. This document provides essential details about the company, including its name, and registered agent.
- Pay filing fee
Applicants must also pay the required filing fee, which varies depending on the type of company being established.
- Obtain an EIN
Non-U.S. residents forming a Delaware company need to obtain an EIN from the IRS. An EIN (Employer Identification Number) is essential for engaging in legal business operations, opening a U.S. bank account, and fulfilling tax responsibilities to the U.S. Treasury.
- Draft bylaws and Hold an organizational meeting
Next, is preparing the bylaws, which will outline the internal rules and regulations of the company.
After preparing the bylaws, an organizational meeting will then be conducted with the initial directors or members to adopt the bylaws, appoint officers, and issue shares of stock if applicable.
- Opening a U.S. business bank account
Opening a business bank account is one of the final processes of setting up a Delaware Company.
When opening a corporate account, each bank has its requirements. So it’s recommended to work with professionals who can help. Damalion can be of assistance in this area.
- Obtain licenses and permits
Depending on the business activities to be conducted by the company, the business owner may need to obtain specific licenses and permits at the federal, state, or local levels.
- Comply with ongoing requirements
To ensure compliance with annual corporate requirements, Delaware company owners, including non-residents, must understand the state’s regulations. The main compliance aspects are the Delaware Franchise Tax and the Delaware Registered Agent Fee.
Delaware company owners must comply with annual corporate requirements, pay Delaware Franchise Tax, and retain a Registered Agent.
Is U.S. Business Address Needed for a Delaware Company?
There are no restrictions on owning or managing a Delaware company as a non-resident of the United States. Thus, non-residents can own or manage a Delaware company without restrictions, without the requirement of an address in Delaware or the U.S. However, a Delaware Registered Agent must be engaged to fulfill the legal requirement.
How we (Damalion) can help
Damalion can assist with Delaware company registration, providing an approved Certificate of Formation/Incorporation, and offering various international business formation packages. We can also help obtain a Federal Tax ID Number (EIN) and provide assistance with apostille documents if needed. Additionally, Damalion can support businesses in maintaining Delaware company compliance and offer guidance on tax matters.
