Delaware LLC for Non-Residents

What you are actually buying

• The Court of Chancery. A dedicated business court, no juries, judges who specialise. If your company is ever in a shareholder dispute worth litigating, this is the reason people pay for Delaware.
• Predictable case law. More corporate law has been decided in Delaware than anywhere else, so a lawyer can tell you how a provision will be read.
• Investor familiarity. US VC term sheets, SAFEs and convertible notes are written for Delaware entities. Being incorporated elsewhere is friction in a fundraise, and friction is expensive at that moment.
• Privacy at the state level. The Certificate of Formation does not name the members.

The flat annual tax, and why it surprises people

Delaware’s recurring charge for an LLC is not a report fee scaled to your size. It is a flat annual tax of $300 due by 1 June, and it does not care about your revenue, your activity or your profit. A dormant Delaware LLC costs the same to keep as a trading one.

Two consequences that matter to a non-resident:

• An abandoned Delaware LLC keeps billing. The tax accrues with penalties and interest until the company is formally cancelled. Walking away is not a way out; dissolving it properly is.
• Form after 1 June and your first payment is the following year. Which is a real, if small, argument about timing.

Confirm the current amount and date on the Division of Corporations’ own page before you rely on it. Delaware has revised its schedule before, and a fee we printed last year is not a fee.

LLC or C-corporation?

If Delaware is on your list because of investors, then the entity type matters more than the state:

Most non-residents who ask us for "a Delaware company" want a Wyoming LLC and have read a blog post. Some genuinely need a Delaware C-corp. The question that separates them is whether anyone is going to buy equity. Our entity comparison works through it.

Delaware or Wyoming, decided in one question

Is someone going to invest in this company in the next two years?

• Yes: Delaware, and probably a C-corporation rather than an LLC.
• No: Wyoming. You get the same state-level privacy and no annual tax on a dormant year, and you can convert later if that changes.

Nothing about Delaware makes a bank more likely to open an account, and nothing about it reduces a federal filing obligation. Those are the two things non-residents most often believe it buys.

What we do

1. Name check against the Delaware register.
2. Certificate of Formation filed with the Division of Corporations.
3. Delaware registered agent for the first year. Delaware requires one with a physical in-state address.
4. EIN application to the IRS, no SSN required.
5. Operating agreement drafted for the ownership you actually have.
6. BOI report filed with FinCEN where required.
7. 1 June reminder set, every year, because the flat tax is easy to forget and expensive to remember late.

What your state choice does not change

These are federal and they follow the company wherever it is formed:

• Your EIN. Every LLC needs one to open a bank account, and with no SSN it is a fax or mail application to the IRS rather than the instant online one.
• Form 5472. A foreign-owned single-member LLC files it with a pro-forma Form 1120 every year, at a penalty of $25,000 for missing it, whether or not the company earned anything.
• Your BOI report. Filed with FinCEN, not with the state. Choosing an anonymous state does not make you anonymous to the federal government.

Anyone selling you a state on the basis that it removes one of these is selling you a $25,000 problem.