Incorporation of an LLC in the USA, Delaware

The registration of an offshore LLC in the state of Delaware (USA) may seem a highly questionable or even a delusional idea in the present day; however, it actually can be a fantastic idea. While most people associate offshore jurisdictions with tropical islands and strong privacy protections, the reality is that some US states can be considered offshore territories, and Delaware is one such exception.

The State of Delaware is in great demand among those wishing to register an LLC in the United States. This form of a legal entity enables the business to operate at an international level, protecting its assets and the confidentiality of the beneficial owners. In this regard, we offer you the use of an extremely popular service: remote offshore LLC incorporation in Delaware. You can contact us and arrange a consultation. There are two options: a free, fifteen-minute session, or a paid, one-hour meeting with an expert in offshore company formation, priced at 300 euros, reduced for a limited time from 500.

Incorporation of an LLC in the USA

Delaware is considered an offshore “tax haven” within the United States. This is primarily due to the state’s refusal to participate in the automatic exchange of information on financial accounts, as well as a favorable tax climate for businesses created in some states (not only Delaware but also Nevada, Wyoming, and Florida). This article will give you answers to the most common questions asked by our readers about LLC incorporation in Delaware, USA.

What are the Main Advantages of Incorporating an LLC in Delaware?

First of all, the legal status of an American company provides numerous real advantages. But unlike the “traditional” business, an offshore LLC in Delaware will allow you to take advantage of the actual “bonuses” of tax-free zones with more reputational credibility than some other typical offshores.

The main pros of LLC registration in Delaware:

• Favorable laws that regulate business
• Clear and consistent legal system
• Tax legislation beneficial for companies operating outside the state.

In addition, Delaware is considered the best state to set up:

• Startups (simple registration procedure, no tax on intangible assets)
• Non-resident companies that are expanding into the US market

Delaware’s corporate laws are more flexible and advanced in comparison to those of other states. The state authorities ensure strict compliance with the law, which gives companies legal protection. At the same time, it does not restrict business freedom, confidentiality, or the ability to enjoy tax benefits.

What Taxes Should an LLC Pay in Delaware?

The situation is a bit confusing here, so we strongly recommend discussing all issues related to taxation with our experts. Formally, LLC members enjoy the same limited liability benefits as the shareholders of a corporation, but the LLC’s income is taxed at the level of company members as in partnerships. Thus, an LLC does not pay taxes in most cases and, as a result, it should not file an annual tax return. An LLC must pay a franchise tax of $300 annually (the situation is different for corporations).

However, if we delve into the essence of the issue (which is quite complex), the clear and transparent picture of taxing the offshore LLC will become quite different. We will not discuss this issue in detail in this article, but it is worth identifying the most important points essential for practical business.

Status of an LLC for tax purposes:

• Not a taxpayer (disregarded entity) – for an offshore LLC with one member
• Partnership – an LLC with several members
• Corporation – by decision of the IRS/application of the LLC

Details on each status:

• Incorporation of an LLC with one member (a foreigner). You are required to submit a 1040NR reporting form; there is no need for that if there is no profit and only personal property is used to conduct business. In some cases (but not always!), the income of a private person is not subject to taxation in the United States. It is extremely important to understand that the criteria for a foreign member are quite complex: you should analyze not only laws but also legal practice and judicial precedents.
• Incorporation of an LLC with several members (foreigners). Reporting to the IRS is mandatory (Form 1065). A K-1 form should be additionally prepared for each member and attached to the tax return (Form 1040NR). The taxes withheld by an LLC from each member are as follows: a) 37% – effective related income; b) 30% – other FDAP income paid by the LLC itself (one of two). But again, it is desirable to consult our expert on LLC taxation in the USA, as there are many nuances to be taken into account.
• Incorporation of an LLC in the corporation format. The federal tax is paid at a rate of 21%.

What Steps are Taken to Incorporate an LLC in Delaware?

A typical list of necessary actions is provided below; however, we would like to note that the price may change in the current situation.

Standard steps to be taken for company registration:

• Selection of a name for an LLC in Delaware. It should not a) repeat the existing name b) contain words such as bank or trust c) indicate that the company is engaged in the insurance business (a special license is required). The name of the LLC shall include the abbreviation LLC, L.L.C., or the words Limited Liability Company. You cannot use obscene/racist language in the name.
• Selection of the number of members in the offshore LLC.
• Preparation of an operating agreement to determine the rights and obligations of each LLC member.
• Appointment of a registration agent (to be a representative of a non-resident LLC in Delaware).
• Obtaining an EIN (Employer Identification Number).

Bank Account for an LLC in Delaware

After the LLC has been registered, you will need to open an account with one of the banks in the United States. Please contact us to select a suitable bank and open a corporate account for your offshore LLC in Delaware, or take advantage of our complimentary advice on choosing a foreign bank account.

Free advice on opening bank accounts:

• A foreign/offshore personal account
• A foreign payment system
• A foreign corporate/personal account

Which State is Best for LLC Incorporation in the USA?

Nevada and Delaware are the most popular states for business registration in the United States. Both have similar conditions and advantages over other states. However, there are several differences between them.

Delaware’s advantages for incorporating an LLC:

• Limited Liability Company Act. It allows for the limitation of the responsibility of corporate directors and officers and ensures smooth and trouble-free business for companies.
• The Delaware Chancellery Court (without a jury) deals exclusively with business cases, so decisions are made as quickly as possible.
• The Division of Corporations, which is under the control of the Secretary of State of Delaware, is a profitable government entity because of its focus on the “customer” – that is, the business.
• Just like in Nevada, there is no income tax (if the business is conducted outside the state).
• There are no requirements for a business license until the application for LLC registration has been submitted.
• Preparation and submission of the annual report is not required.

The Cost of LLC Incorporation and Maintenance in Delaware, USA

The specific figures we quote are current and accurate as of the day of writing. But we cannot guarantee that the situation remains unchanged, and a review of the pricing policy may be required. Another important point concerns the list of services that are necessary in your case. Most likely, you will not need all the possible options listed below, and then the total cost of an offshore LLC incorporation in Delaware will be lower. But the reverse situation is also possible, when the circumstances of the company registration require additional costs, or they will be needed to start a real business.

The basic cost of LLC incorporation in Delaware (USA):

• The cost of an offshore LLC registration in Delaware (USA) is 2850 USD.
• Company renewal in Delaware (including the services of a registration agent, provision of a registered address, and filing of zero accounts) is 2850 USD.

Virtual office services:

• Phone number for receiving messages per 1 year – EUR 960 (+ deposit in euros for international calls).
• Phone number to forward phone calls to the client’s number – EUR 1,560.
• Services of a secretary on the phone (connection + service) – from 1,000 EUR per month.
• Selection of a separate office, the cost depends on the location and area – from EUR 2,000.
• The cost of a virtual office in the business center (per year) is EUR 800.
• The cost of our services related to providing an individual address in the business center (with confirmation) is calculated on a case-by-case basis.

Remote Incorporation of an LLC in Delaware

You need to take three main steps to register an offshore LLC in Delaware (USA):

• Contact our specialists for advice and professional assistance in the registration of an offshore LLC in Delaware (USA).
• Pay for professional assistance in the registration of an offshore LLC in Delaware. Payment can be made by bank transaction or payment card, as well as using PayPal, WebMoney, or Western Union transfer.
• Prepare the necessary documents for LLC incorporation in the state of Delaware, USA.

Documents required for LLC incorporation in Delaware:

• Notarized copies of international passports (pages with photo and signature) and a second ID with a photo (e.g., driver’s license) from the (beneficial) owner and all members/managers of the LLC

Attention! If the notary refuses to certify a copy of the passport, order an English translation from a sworn translator and stitch it with a copy of the original (a page with a photo and signature is mandatory), and then certify it with the notary!

• Proof of residential addresses of the (beneficial) owner and all LLC members/managers (e.g., utility bills not older than three months)
• Letters of recommendation from public partners and banks for the (beneficial) owner and all members/managers of the LLC
• A summary in English for the (beneficial) owner and all members/managers of an LLC

Attention! All documents must be translated into English and notarized!

Conclusion

If you want to set up an offshore company in a trusted, respected jurisdiction, with beneficial tax and privacy policies, and a favorable, business-friendly climate, an LLC in Delaware is a great solution. To get started, please contact us at in**@***********rt.com to find out more about the remote incorporation of an LLC in Delaware, USA. You can arrange a consultation (free or paid) to learn more about the process and how we can help you.