Offshore company formation in Delaware, USA
United States counts with the highest corporate tax rate in the world. However, the latest developments in fiscal reform of the new president of the United States, indicate that corporate taxes will be lowered considerably for American companies easing the repatriation of the benefits that American citizens have generated abroad. It is expected that the corporate tax will be reduced from 35% to 15% and will convert United States into one of the best countries to set up business.
The United States of America is made up of 50 states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Dakota South, Tennessee, Texas, Utah, Vermont, Virginia, Washington, East Virginia, Washington and Wyoming. Each North American state has its own independent fiscal policy and the most prominent state is Delaware.
Flexible commercial regulations, scarce bureaucracy and high level of privacy, make more and more start-ups consider Delaware as a jurisdiction to set up their offshore company. Being known as “The Gateway to the United States” most of the companies registered in Delaware are for non-resident foreigners. It is also the state where most of the Wall Street companies has installed their headquarters. According to the experts, the times when Delaware will be considered as the best jurisdiction in the world are not far in future.
Registering an offshore company in Delaware for e-commerce activity can be the first step that will take you in your new adventure of entrepreneurship. Banks and financial institutions of this state are accustomed to deal with intangible, online services and sales over Internet and therefore don’t oppose when offering any type of financial services. United States, and Delaware in particular, are known worldwide as the “e-commerce paradise” and if the fiscal reform takes place as it is planned leading to the tax reduction for resident companies it is possible that there won’t be any other offshore jurisdiction that will be able to compete with its tax regime.
The most recommended form of registration of an offshore company in Delaware for non-residents is the Limited Liability Company (LLC). LLC is a legal entity totally separate and distinct from its shareholders called “Members”. The rights, duties and obligations of these members are stated in the “Operation Agreement”. The company’s operational responsibility is independent and will not affect the rest of the members of the company.
The Delaware´s commercial registry does not accept bearer shares. At least one shareholder and one director are required. They can be of any nationality, without restrictions. The directors can assume the functions of president, vice president and treasurer.
International fiscal planning in Delaware
In order to operate through Internet, eliminate or lower the tax burden in the United States and save on taxes in your country of residence the following offshore scheme can be applied: offshore LLC for non-residents in Delaware with bank account in the name of the company in another country, outside of the United States, such as: Czech Republic, Latvia, Portugal, Mauritius. Using this structure the offshore company registered in Delaware gains tax-exempt status. The only conditions that should be met are that this company cannot carry out any business activity within the boarders of the United States, neither have clients residents of USA. It also cannot have any bank account in the name of the company in Delaware. If the goal of the client is to set up a company to develop business relations with American companies, he will have to register a company for residents with an EIN number and open a bank account in the same jurisdiction. Once the company registered in Delaware opens a bank account in the United States, it automatically looses tax-exempt status and requested to keep and present accounts annually.
Register an offshore company in Delaware: Advantages
- The main advantages of registering an offshore company in Delaware are the following:
- 0% corporate tax rate on benefits in the state of Delaware. No inheritance taxes or federal taxes, as long as your company doesn´t develop any kind of commercial activity on the territory or with the United States.
- An offshore company in Delaware can have bank accounts opened in its name in any country in the world. Also it can own real estate in any country in the world.
- Commercial registry doesn’t disclose any information regarding directors or shareholders to third parties. The United States has not signed any automatic exchange of information agreement. It means that the final beneficiary owner can open a bank account in the name of the company without being reported to the tax authorities of their country of residence.
- In Delaware Offshore companies can be set up very quickly, from 3 to 5 days. Offshore companies in Delaware gain an international prestige being registered in the best financial center in the world. There are neither restrictions nor discrimination on the nationality of the final beneficiary of a company in Delaware.
- Delaware applies Protection Laws to the directors of the LLC companies, which means that it will protect them against any legal complain or illegal actions taken in contra their company. The United States is the country with the largest registry of technology companies in the world due to its good infrastructures in telecommunications and little bureaucracy.