Delaware Non-Resident LLC Company Formation

The Potentially Tax Free American Company

Delaware is the State where almost half of the Fortune 500 Companies are based in the United States. The primary reason is that Delaware has a very corporate friendly Court of Chancery; it is probably the most efficient Division of Corporations in the US with incorporations formed within a few hours, has little bureaucracy, very low franchise taxes and no corporate tax on corporations based outside of the State. These facts mean that a Delaware LLC carries a prestige and weight not normally available to potentially tax free companies. The reason this is possible is because an LLC is fiscally transparent and if formed correctly can provide a company which is governed by the very company friendly legislation of Delaware but also be totally free of any Federal or State corporation taxes. Obviously, how such a company is formed is vital if such tax benefits are to be secured but what is key is that the beneficial owners are not US citizens, green card holders or US residents and that further they do not carry out any business activities in the US.


Delaware - Delaware has a very large company formation and financial sector but also produces chemicals, food products, paper products, rubber and plastics products, primary metals and printed materials. It is one of the most developed States in the Union.

The United States of America - The World's predominant nation in economic and military terms with a strong tradition of democracy and social inclusion although certain economic groups, primarily African Americans and Hispanics, have significantly lower standards of living and educational attainment. On a GNP per capita basis it is one of the World's ten most wealthy nations. Unemployment is under control despite the economic downturn. Geographical area: 3,618,770 sq. miles or approximately 36 times the size of the United Kingdom. Population: 313,900,000 (July 2012).

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Delaware is located on the Eastern Seaboard of the United States, bordered by the Atlantic Ocean and the states of New Jersey, Pennsylvania and Maryland. The State is 1,982 sq. miles in size and is about quarter the size of Wales.

About Delaware Non-Resident Limited Liability Companies (Llc's)

Delaware LLC's were created under the Delaware Limited Liability Companies Act, 1992, and have become extremely popular both with American's and non-American's due to the fact that they are fiscally transparent despite the fact that the LLC's themselves (provide the LLC Agreement has been correctly drafted) are considered separate legal entities at law. In simple terms, this means that apart from the local Division of Corporations annual taxes/levies only taxation at an individual level will apply. In such cases, where an LLC is managed outside of the United States then its tax base (if any) will become that of the host jurisdiction. Therefore, if such a company is properly managed and controlled from a tax free location then the company (save for annual franchise taxes) will itself be tax free provided the non-resident LLC has been properly formed and has a suitable LLC Agreement.

Domestic Corporate Tax

The domestic corporate state tax is 8.7% plus federal corporate taxes which vary between15% to 35% depending on turnover but the above do not apply to a non-resident LLC.

Personal Tax

Delaware's individual (personal) income tax rates consists of six brackets and a top rate of 6.75% % plus federal individual taxes which vary from a graduated 10% to 35% depending on income level. However, if a beneficial owner is located outside of the US and the company does not conduct business directly or indirectly within the US then no US personal tax consequences will exist.

administration & Accountancy Services

Managed & Non-Managed Companies

The SCF Accountancy & Law can provide Delaware companies either in a non-managed or managed format depending on client needs and requirements. However, it should be noted that if a tax free or low tax non-resident LLC is required it is always required that there be suitable management in a suitable location.

Fully Managed & Branch Registrations

Where required SCF Accountancy & Law can provide fully managed services and even branch registration in another jurisdiction where tax treaty protection is required. For further details please consult with a SCF sales consultant

Set-up & Annual Maintenance Fees

Please request the separate Delaware Non-Resident LLC Quotation Leaflet

The Ownership of Delaware Incorporations & Llc's

'Overhead' Discretionary Trusts or Private Interest Foundations

For tax planning reasons, normally pertaining to anti-avoidance provisions in a beneficial owners 'home' country or place of fiscal residence, and/or because of a need to 'ring fence' assets many clients owning a Delaware company may select to have it owned not be themselves but by an overhead discretionary trust or a Jersey Private Interest Foundation, Seychelles Private Interest Foundation or a Liechtenstein Private Interest Foundation (locally known as a Stiftung).

For more information on discretionary trusts and/or private interest foundations please refer to the trust and private interest foundation sections.