Delaware Offshore Incorporation

The main attractions of Delaware as a jurisdiction in which to incorporate a limited liability corporation or LLC are that it is tax advantageous for non-US residents, it is a politically and economically stable and ‘safe’ jurisdiction and it is governed by strict codes of practice which protect the LLC members and their assets, making Delaware offshore incorporation attractive for a growing number of business owners.

The limited liability aspect of incorporating a business entity in Delaware has particularly positive far reaching benefits for LLC members and makes a Delaware offshore company a useful tool for those seeking to protect their assets from creditors, liabilities and excessive taxation for example.  This article examines the main potential benefits afforded those who incorporate their business in Delaware.

Those who form and own a limited liability corporation in Delaware are known as ‘members’ rather than ‘partners’ and the LLC itself is a distinct legal entity, separate from those who establish it.  This means that LLC members are able to limit their risk and liability to their initial investment made into the corporation which means that the Delaware offshore incorporation of an LLC allows for far reaching personal asset protection.  In addition to these clear benefits a Delaware offshore company is not required to report its assets which removes an additional layer of transparency and makes it even less a likely target for speculative creditors.

There are clear taxation advantages to establishing a limited liability corporation in Delaware, for example such an entity can use various clever schemes to legitimately reduce its overall taxable income.  Such schemes include establishing for the benefit of members and employees of the company things like pension schemes, profit sharing schemes and even the provision of insurances to employees such as medical and life insurance is a tax deductible action for a Delaware offshore company.

Another reason why Delaware offshore company incorporation is such an attractive way of establishing a tax efficient business structure is because such a company is allowed to own shares in another company and profit from dividends with eighty percent of the profit remaining one hundred percent tax free.  State sales tax or value added tax is not payable by a Delaware LLC, non-resident members are not required to pay state income tax and if the corporation conducts its business and income generating activities outside the state of Delaware then the company’s profits are free from state income tax as well.

Finally, for business owners considering their estate planning options a Delaware offshore company could assist them when it comes to ensuring their business will continue uninterrupted even after the death of key members.  This is because a member’s shares in an LLC can be willed, transferred and distributed very easily.

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