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Which of the US state to choose to company registration?

What we needed Delaware, Wyoming and Nevada?
Wyoming, Delaware, Nevada, Company registration, USA

 

The United States have become mainstream long ago, just like Estonia. Everyone heard that Delaware, Wyoming and Nevada are incorporate friendly due to their corporate law, low fees and limited or zero taxation at the state level.

However, to hear something is one thing, but to understand the details is something completely different. We have prepared a detailed comparison, summary, conclusions and some humor for you.

Let’s go then!

Delaware, Wyoming and Nevada comparison

Condition Delaware Wyoming Nevada

No state corporate income tax:

8,7% Yes Yes

Registration agent is needed for corporation registration

Yes Yes Yes

No requirements on members’ residency

Yes Yes Yes

No tax on corporate shares:

Yes Yes Yes

No franchise tax:

Min $225 Yes Yes

Minimum annual fee:

Min $225 50$ Min $450

Sole member control is allowed

Yes Yes Yes

No business license needed

Yes Yes $150

Endless stock of any nominal value is allowed:

Yes Yes 75000

Nominee shareholders: allowed:

Needed

Yes Yes

No share certificates needed:

Yes Yes

Needed

No minimum capital requirements:

Yes Yes Yes

Member meetings can be held anywhere:

Yes Yes Yes
Information on corporate income tax is not collected for exchange with the IRS: Collected Yes Yes

 

So, what place is the best to get incorporated?

In general, Delaware is oriented at large complex state corporations – so-called Big Bosses – due to its developed legal system and laws protecting shareholder rights. At the same time, Nevada and Wyoming are more attractive to small private corporations and LLC. Delaware laws normally protect rights of boards of directors and shareholders, while Nevada and Wyoming tend to give preference to management.

So what, the popular Delaware is not for me?

Does the comparison above mean that Delaware is not the best place to register a corporation? Certainly not. The choice to open a corporation in Delaware depends on the long-term goals of your company.

 

Delaware has a wealth of experience in corporate case law, covering over 110 years of history on issues such as governance/shareholders, mergers and acquisitions, which is why Fortune 500 (the rating of the coolest and largest international companies) is turning to this state. Delaware laws are usually pro-management when it comes to disputes between minority shareholders. Huge public companies have literally hundreds of such disputes that are awaiting trial in courts on any day.

 

So, if you want to grow your company to get to Fortune 500 (or at least plan to attract VC investors and possibly go for IPO on a great sunny day), then Delaware will be your choice.

But no one has canceled the tax, and for big players taxes are not that small.

Corporate income tax of 8.7%, franchise tax, reporting requirements, and rules that require disclosure of large volumes of information, which leads to a reduction of confidentiality.

All this makes Nevada and Wyoming more attractive to small and medium businesses.

Nevada or Wyoming – what do I choose?

Well, we’ve understood Delaware a little bit – to run there is like to follow the flying kite …So let’s look at Nevada and Wyoming … They sound more to the ground ☺

Disclosing information to IRS:

Nevada is famous for being the only state that does not share information with the IRS. Although this fact is true, there are several things you should know:

  1. First of all, Wyoming discloses information to the IRS, but this is just the information provided by companies with real assets inside the state. Therefore, if you do not have property in Wyoming, you are protected in this regard, as well as in Nevada.
  2. Second, Nevada distracts the Tax Service attention from itself. This means that if you are in Nevada, IRS is targeting you because you are in a state which is not IRS-friendly.

Corporate orientation of Nevada and Wyoming

In general, the law of Nevada is better in protecting the corporate sector. However, Wyoming also has a strong corporate interest protection, but only until you have done something wrong or you may do… Fraud, shareholders meeting conducted or co-financing performed not formally enough…

Taxes in jurisdictions

In Nevada and Wyoming, there is no personal or corporate income tax.

 

However, Nevada is now considered “the worst state for doing business” due to the presence of a non-partisan tax fund that indicated new changes in Nevada’s taxation. Recently, the annual report and business license fees, which were already the 3rd largest in the country, were increased to $350 for LLCs and a whopping $650 a year for lucrative corporations. Nevada also has a new “commercial tax” on your gross income if your total gross income of all your business structures in Nevada is over $4 million a year! In other words, the state will combine the income of several corporations of any general owner and apply a trade tax if the cumulative income reaches a threshold of $4 million.

 

So, work but do not grow up and do not get too much – Regards, Nevada ☺

Everything is easier with Wyoming. No profit taxes, we thank budget surplus for this☺

Wyoming is waiting for you with Jack and bread, just become a corporation of this state and you won’t have a head ache for years.

 

So where exactly to get incorporated – is up to you. There are no perfect states, there are no perfect countries. But you exist, and so does your business which needs sustainable development.

 

We will gladly answer all your questions. Write, call, do not forget us!

Your Finevolution team

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