Delaware company formation.

Access to the American market.

A Delaware company gives international entrepreneurs a US legal identity, access to American customers and payment platforms, and a body of corporate law that investors know well.

Entities are formed with the Delaware Division of Corporations, while federal tax is administered by the Internal Revenue Service. The United States is an onshore jurisdiction: whether a Delaware company pays US tax depends on its classification, its owners and whether it carries on business in the country, so the choice of structure deserves careful thought.

AT Express is headquartered in Cyprus, with offices in the United Kingdom, Hong Kong, China, Vietnam and Singapore. We coordinate Delaware formations with registered agents and US-qualified accountants for clients worldwide.

LLC or corporation.

The limited liability company offers limited liability with flexible management and, by default, pass-through tax treatment: a single-member LLC is disregarded for federal income tax purposes and a multi-member LLC is treated as a partnership, unless it elects otherwise. The corporation is taxed as a separate entity at the federal corporate rate and is the usual choice for companies seeking venture capital or planning to issue shares to investors.

What sets Delaware apart.

• A single member or shareholder, of any nationality and residence.
• A registered agent in Delaware must be maintained at all times.
• No annual report for LLCs, only an annual tax.
• The Court of Chancery, a specialist business court with a long body of case law.
• Owners’ names are not required in the LLC certificate of formation.

State and federal tax.

According to the Division of Corporations, Delaware LLCs pay an annual tax of $400 by 1 June and do not file an annual report. Corporations file an annual franchise tax report and pay franchise tax calculated under the state’s methods.

At federal level, corporations pay corporate income tax at 21%. A single-member LLC owned by a non-resident is generally disregarded, but the IRS requires a foreign-owned disregarded entity to file Form 5472 with a pro forma Form 1120 each year, and failure to do so can attract a penalty of $25,000. Income effectively connected with a US trade or business is taxable in the United States, and owners are also taxed in their own countries.

A balanced view.

What you will need.

• A Delaware registered agent and registered office address.
• A certificate of formation for an LLC, or a certificate of incorporation for a corporation.
• An operating agreement or bylaws setting out ownership and management.
• An employer identification number from the IRS for banking and tax filings.
• Identification documents for all owners and managers.

From first call to formation.

State filing is usually prompt. Obtaining a tax identification number and opening an account typically take longer for non-residents; we confirm a realistic timetable in writing.

Keeping the company in good standing.

• Annual LLC tax of $400 by 1 June, or the corporation’s annual franchise tax report and tax.
• Registered agent maintained in Delaware.
• Federal returns, including Form 5472 and a pro forma Form 1120 for foreign-owned single-member LLCs.
• Books and records sufficient to support the federal filings.
• State registrations wherever the company does business outside Delaware.

Banking for a Delaware company.

Non-resident owners can bank with US institutions, some of which require an in-person visit, or with regulated fintech providers that partner with US banks. An employer identification number, the formation documents and a clear account of the business are needed in every case, and approval is never assured. See international bank account opening and our US LLC guide for non-residents.

Frequently asked questions.

Official sources.

1. Delaware Division of Corporations, LLC, LP and GP tax instructions — annual tax and due date.
2. Internal Revenue Service, About Form 5472.
3. Internal Revenue Service, Limited liability company (LLC).
4. Financial Crimes Enforcement Network, Beneficial ownership information reporting.
5. Council of the European Union, EU list of non-cooperative jurisdictions for tax purposes.
6. OECD, International standards on tax transparency, including the Common Reporting Standard.
7. Internal Revenue Service, Foreign Account Tax Compliance Act (FATCA).

Hero image: “Delaware Legislative Hall West Side DSC 3441 ad” by Adavyd, licensed under CC BY-SA 3.0.