Why is Delaware considered to be one of the best jurisdictions in the world to incorporate in? Here are ten reasons why Delaware is so highly regarded by the international business community:
1. No corporate income tax
Businesses that are incorporated in Delaware but do not have a physical presence in the state are not subject to corporate income tax. This in one of the main reasons why over half of Fortune 500 companies are incorporated in Delaware.
2. Corporate privacy
Corporate law in Delaware does not require that beneficial owners of a corporation be listed with the Secretary of State or any other publicly available documents. Registered agents are only required to disclose the owners of a company with a court subpoena. These are only granted when a court finds probable cause to believe a company is engaging in criminal activity.
3. Delaware Chancery Court
Delaware’s court system is one of the best for corporate law in the country. This court system expedites cases so that they can be resolved in months instead of years. The Chancery Court also has the added benefit of conducting trials using judges instead of juries. This generally means that court cases will not have unpredictable results.
4. Case law
Delaware has a long history of resolving corporate disputes. The body of corporate law precedents means that court cases can be settled more easily outside of court to reduce costs for all parties involved.
5. No residency requirements
Delaware does not have any residency requirements for owners or directors of companies. Owners and directors do not need to be citizens of the United States.
6. Can change corporate status
Delaware companies are flexible. Limited liability companies can be converted into S corporations or C corporations. S and C corporations can also be converted into LLCs. This flexibility makes it easy for companies to minimize their tax burdens.
7. Pass through taxation
Owners of LLCs are eligible to file business tax returns along with individual tax returns. This reduces accounting fees and paper work associated with filing tax returns.
8. Foreign qualifications
Businesses located in Delaware can qualify to do business in all 50 states and the District of Columbia. Companies headquartered in Delaware can preserve many of the benefits Delaware tax law while still doing business legally in other states.
9. Corporate friendly laws
Delaware is internationally recognized as a venue where the legal system is friendly to corporations.
10. Minimal country risk
Delaware is a jurisdiction that is favorably viewed around the world. Its legal system makes it an outstanding location for incorporating. While this is true of certain other corporate jurisdictions, their legal and tax advantage may be offset by risky political environments. The fact that Delaware is in the US means that you may domicile your corporation there with very little country risk.
After considering these facts you might also think that Delaware is the right place to start your business. Inc. Plan can help you start your business in Delaware in one business day.