This is a common question, as Delaware is known as a tax haven, making it an appealing choice for forming a business. The short answer is that you do not have to be a resident to form a Delaware corporation. As long as you are not a resident of a restricted country, you can form a corporation in Delaware, regardless of where you live, including foreign countries. Restricted countries include North Korea, Cuba, Iran, Russia and Syria. Learning more about the process is a good first step in deciding whether to register your corporation in Delaware.
What is Your Address?
You do not need a Delaware address to register a corporation in the state. Other than the above-named countries, there are no restrictions on residency requirements, which means you can reside in any state or allowed country and form a corporation in Delaware. However, you will need to have a registered agent with a physical Delaware address. This person can accept mail for your business and assist with legal matters that pertain to your corporation. You cannot form a Delaware corporation without a registered agent, which is something pretty important to keep in mind as you pursue formation.
What About an EIN Number?
An EIN number is your employee identification number. This number is issued by the IRS and can be obtained by non-residents of the state of Delaware, as well as the United States. An employee identification number is mandatory to legally operate a business, as well as for hiring employees and having a business bank account. It’s also necessary when you file taxes for your corporation in the United States.
Electing an Officer or Director
This is an excellent question and the answer is that yes, a non-resident of the United States can act as a corporation’s officer or director. There are no age restrictions either, so this allows for a flexible set up when you organize your corporation.
Opening a Bank Account
Your corporation will need a bank account, and, as a non-resident, there are some considerations to keep in mind. The first is that each bank has its own restrictions regarding business bank accounts, so your first step is to familiarize yourself with this process for the bank or banks you are considering using. You will need to provide business information, which may include your EIN number, certificate of incorporation, address, photo identification, operating agreements and company bylaws.
You will be required to pay taxes on any United States-sourced income, which is any money earned inside the country. This includes wages but also encompasses money earned for performing services or selling goods. If you incorporate in the United States but do business elsewhere, you do not have to pay taxes on income. It’s a good idea to have a reputable tax professional to help you when it’s time to file taxes.
Setting up a Delaware corporation has significant benefits for many kinds of businesses. If you choose to form a Delaware corporation, we can help. Contact Corporation Center today for assistance with all of the paperwork and documents necessary. We can offer assistance every step of the way.