When entrepreneurs decide to start a new business, the main question is “where should I incorporate?” Each of the US states differs through its business climate and legal features. For example, while some states offer tax breaks for businesses, other states have a higher cost of living. If you are also uncertain about where to establish your company, here is a top 5 of the most business friendly US states.
Home to over 63% of all Fortune 500 companies, Delaware is the most attractive US state because of its accessible legal structure regarding corporations. It is an extremely popular state not only for its incorporation services, including proper judicial guidance from the state’s well-developed legal courts, but also for not charging any sales taxes. Therefore, half of the publicly-traded companies in the USA have their headquarters in Delaware.
According to the Tax Foundation’s 2015 State Business Tax Climate Index, the American state which ranks highest as the most business friendly is Wyoming. Companies based in Wyoming benefit from not paying any corporate or personal income taxes. The state also offers tax exemptions to several business areas such as purchase of raw materials and transactions on gasoline or groceries. Entrepreneurs are only required to pay federal income taxes.
3. South Dakota
Similar to Wyoming, the Mount Rushmore State is well known for not charging any income taxes, both corporate and individual. Moreover, South Dakota incorporation benefits from legal protection, such as separation of personal and corporate assets, and from small ongoing filing burdens. Furthermore, the state doesn’t charge any capital gains fees, making it an ideal investment environment.
This American state is popular for startups because it shelters Las Vegas city, a metropolis providing entertainment and cultural activities. Overall, the state of Nevada has a business friendly climate thanks to its no income and corporate shares taxes. The Nevada Secretary of State highlights, the country’s legal efficiency for corporate shares issues, pointing out that it is one of the most permissive judicial structures in the USA.
Despite its low temperatures, Alaska is the perfect environment for companies activating in the oil, natural gas, and fishing industries. The state enforces no individual income fees or sales taxes, which allow businesses to make in-state purchases at a lower cost. Alaskan LLCs offer the best protection to their owners and cannot be dissoluted by any court, unless the company proves to be unprofitable.
A business is meant to reach its objectives and gain profit. Therefore, choosing to incorporate in one of the best US states is an important step for building a successful startup. If you believe you need assistance with the incorporation process and the managing of a successful corporation, you can always contact Inc. Plan(USA) for a free 30 minute consultation or you can check out our other blog posts.