Delaware is the go-to destination for incorporating businesses in USA —especially for non-resident entrepreneurs. The enormity of corporate registrations can be understood from the fact that over half of all New York Stock Exchange listed corporations and 3/5th of Fortune 500 companies is incorporated in Delaware. Presently, there are more than a million registered corporations there higher than their human population. In this article, let us explore the incorporation of a legal entity in Delaware from Indian entrepreneur perspective:
Location: Delaware is a state in USA. Its capital is Dover and its biggest city is Wilmington. It is located in mid-Atlantic and Northeastern regions of USA. Nearby famous cities are Philadelphia, New York and Washington DC. On the US map, it appears as below:
Popularity: Delaware is known to be heaven for corporate incorporations. There is no residency requirement. So, an Indian can get his company registered by sitting in India. Its corporate laws are very corporate friendly. The Delaware General Corporation Law offers great flexibility to corporations to manage their affairs. There is a dedicated court Delaware Court of Chancery primarily dealing with corporate disputes. The tax laws are quite friendly. There is a simply process to set up a company there at.
Process of incorporating an entity:
- Select a business structure (Corporation or LLC).
| Feature | LLC (Limited Liability Company) | Corporation (C-Corp / S-Corp) |
| Ownership | Members | Shareholders |
| Management | Flexible (members or managers) | Formal (directors & officers) |
| Liability Protection | Yes | Yes |
| Taxation | Pass-through (default) | C-Corp: Double taxed S-Corp: Pass-through (with limits) |
| Compliance | Minimal – no annual meetings or minutes required | Formal – annual meetings, minutes, bylaws |
| Best For | Small businesses, freelancers, family-run companies | Startups, companies seeking outside investors |
| Franchise Tax | $300 flat per year | Starts at $175 + $50 report fee, can go much higher |
Choose a company name and check its availability.
- The fee for reserving a company name in Delaware is $75.00.
- The name reservation is valid for 120 days from the date of filing.
Appoint a registered agent
- Required to have a Delaware address.
- Can be an individual or a service ($100–$300) per year.
File the formation documents.
- For LLC: Certificate of Formation
- For Corporation: Certificate of Incorporation
Filing Fees with Timelines:
| Entity Type | State Filing Fee | Processing Time | Expedited Options |
| LLC | $90 | 2-3 weeks | 24-hour ($50), same-day ($100), |
| Corporation | Starts at $89* | 2-3 weeks | Same as above |
- Obtain an EIN (Employer Identification Number) from the IRS
- Open a U.S. business bank account (remote banking options available).
- Adopt internal documents, such as bylaws or operating agreements.
Annual Requirements:
- Franchise Tax: LLCs: $300 flat fee
- Annual Report (Corporations only): Filed online.
Taxation:
1.No State Corporate Income Tax (If Operating Outside Delaware): If your company doesn’t have physical operations or employees in Delaware, it does not pay state corporate income tax.
2. No Sales Tax: Delaware is one of the few U.S. states with zero sales tax on goods or services, reducing the overall cost of doing business.
3. Predictable Franchise Tax: All Delaware corporations must pay an annual franchise tax, but:
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- It’s fixed or scalable depending on your company’s size and structure.
- LLCs pay a flat $300 per year, regardless of revenue or number of members.
4. No Delaware Personal Income Tax (If You Don’t Live There): As a non-resident, you generally do not owe Delaware personal income tax unless you have a physical presence or earn Delaware-sourced income.
5. No Gross Receipts Tax (If Not Operating Locally): If your business is not selling directly in Delaware, you’re typically exempt from gross receipts taxes.
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In case you are planning for incorporate an entity in USA or need any support or have any query, you may like to connect with us.
Abhinarayan Mishra FCA, FCS, LL.B, IP, RV; Partner, KPAM & Associates, Chartered Accountants, New Delhi, India ; +91 9910744992; ca.abhimishra@gmail.com; samlawassociates18@gmail.com
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