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Delaware - The gold standard for foreign LLC formations in the USA?

Delaware - The gold standard for foreign LLC formations in the USA

Delaware

For entrepreneurs who want to Limited Liability Company (LLC) in the United States, Delaware is often known as a prime location. With its renowned legal system, favorable tax conditions and flexible laws, the state attracts many international investors. In this article, we will conduct an in-depth analysis of the pros and possible cons of forming an LLC in Delaware and evaluate whether it is indeed the best option for foreign entrepreneurs.

Advantages of forming an LLC in Delaware

  1. Legal system and legal certainty Delaware is known nationwide for its progressive and predictable legal system, particularly through the Delaware General Corporation Law (DGCL). Courts in Delaware have decades of experience in dealing with corporate matters, providing investors with a high degree of legal certainty.
  2. Tax Advantage Delaware does not levy individual or corporate income tax on the profits of LLCs. Instead, only a small annual Franchise fees of $300. This makes Delaware a very attractive location for tax purposes.
  3. Flexibility and Anonymity The laws in Delaware allow LLCs a high degree of flexibility in their internal structure and administration. In addition, shareholders only have to disclose a small amount of personal information during the formation process, which offers foreigners more discretion.
  4. Reputation and acceptance Delaware enjoys an excellent reputation as an established location for company formations. LLCs from Delaware are recognized by banks, authorities and business partners in the USA and highly recognized worldwide.
  5. Infrastructure and services Delaware offers a modern infrastructure and a well-developed range of service providers such as lawyers, tax advisors and registration agents who specialize in the needs of LLCs.

Potential disadvantages

  • Higher start-up costs compared to other countries
  • Expensive Registered Agent Additional services

Comparison table

Comparison table: Start-up prices, running costs and ancillary services in tax-free US states (prices in USD)

Cost comparison in (USD) Chart

Here are the standard fees that normally apply. Special cases and additional services are not listed

Conclusion

Forming a Limited Liability Company (LLC) in Delaware offers numerous advantages for international entrepreneurs, including an advanced legal system, favorable tax conditions, flexibility in structuring and administration, and a strong reputation. These advantages make Delaware an attractive location for company formations.

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Disclaimer: Please note that the above dates, tax rates and regulations may change over time. Do not make any independent decisions without first consulting an expert for your individual situation. It is in your interest to always receive individual information from an experienced expert who knows your situation.

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