This is a particularly attractive jurisdiction within the offshore sector because of its services and legislation. The American state of Delaware has been allowed to develop these types of offshore structures since 1965.
The state of Delaware is the most attractive of all the US states when it comes to players in the world of business. The state is recognised as being the most favourable when it comes to investment and capitalism.
This is the place to settle on the North American continent. A simple operation, lack of bureaucracy, and low annual fees can result in maximum profits with minimum restraints.
The judicial system which has been developed in the United States is the one which is best equipped to handle commercial disputes.
Interest for Limited Liability Companies (LLC) in Delaware
A place of choice for many companies throughout the world.
Local tax laws and corporation laws in this area of jurisdiction make it a place of choice for many businesses.
At the G20 summit, the Prime Minister of the Grand Duchy of Luxembourg complained that the OECD blacklist does not include Delaware, Wyoming and Nevada – the states of the US which allow offshore companies to be set up in complete security.
The fact that fiscal competition between the countries attracts tax residents and international businesses is a fundamental transatlantic reality. Furthermore, implementing the same tax regulations and legal systems in all the states within the US would totally contradict the “American spirit”.
This is one of the reasons why the US administration is not as demanding as is the case in other tax havens.
Difference in taxation laws between the various states of the USA
The United States is a federal state; citizens and businesses must accept that there are differences in legislation and taxation between the individual states. Therefore, the small state of Delaware (870,000 inhabitants) has become a global giant for tax haven enterprises, with 40% of the companies listed on the New York Stock Exchange being located there.
Delaware has a strong fiscal attraction.
Very specific forms of taxation can partly explain this phenomenon: Profits which companies make from their operations which are conducted outside of its borders are not taxed in Delaware.
This state neither has any income tax nor “sales tax” (which is the US equivalent of VAT), both of which apply to the purchase of many goods in other states. On the other hand, federal tax is imposed, including income taxes on both individuals and businesses.
The way Delaware law governs businesses is also highly advantageous: Courts are “pro-business” meaning that may commercial disputes can be settled by trial without juries being required to appoint any business lawyers, meaning these disputes can be both tried and resolved very quickly.
Delaware jurisprudence is well suited towards business management in situations of shareholder takeover disputes, and with regards to protecting the rights of American consumers. Financial statements for a company registered in Delaware do not have to be physically kept on the state territory. This is a tax haven which has nothing to do with notions of secrecy often associated with other offshore centres.
Advantages of Delaware jurisdiction
- The LLC is not subject to Federal income tax in the United States (BR: 0%) when it is owned by non-resident shareholders who are not running the business operation in the United States, and who have no source of income from inside the United States.
- US LLC companies are “popular vehicles” in conducting international trade.
- Low costs for incorporation and business administration.
- No filing of accounts.
- Fast incorporation process.
- Flexible operations for offshore companies.
Characteristics of Delaware companies
- Share capital: No minimum requirement.
- Minimum number of shareholders: One.
- Bearer shares / potential shares without nominal value: No / No.
- Directors: Minimum number /location: Restricted/unrestricted.
- Company Secretary: compulsory /necessary /location: No / No / unrestricted.
- Headquarters: Compulsory / Local authorised agent: Yes / Yes.
- The headquarters must be maintained in the state of Delaware.
- The services of a locally authorised agent will be required.
- Information required by the authorities prior to incorporation or before the company is granted offshore tax status: No.
- Information which is available and open to the public: Company name, date of incorporation, articles of incorporation, the name and address of the locally authorised agent.
- An LLC may as part of a private agreement register all aspects of the company without having to publish them.
- Records which must be kept at the headquarters: None.
- Company registration: Held by the shareholders.
- Bookkeeping required / to be filed alongside administrative documents: No / No.
- Annual returns along with relevant administration: Yes.
- Location of meetings: Unrestricted.
- Corporation tax: 0% provided that the following conditions are met:
1- LLC which consists of non-resident partners.
2- LLC which is not conducting any business within US territory.
- Under these conditions, it is not a requirement to submit a state income tax declaration.
- Annual state fee: Currently 270 USD.
- Change controls: No.
- Currency: US Dollar (USD).
- Access to treaties to avoid double taxation: No.
- Language of statutes and for corporate documents: English.
- Incorporation: $2,800.00
- Costs for maintenance and domiciliation: $1,800.00