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The Delaware Corporate Law structure does not impose restrictions on foreign ownership or management.
The only document required in order to create an LLC in Delaware is the Certificate of Formation. Unlike other states, Delaware requires very little information to be made public in order to form an LLC.
The Certificate of Formation, which is filed with the Delaware Secretary of State, has to contain only two articles: the name of the Delaware LLC and then the name and address of the Delaware LLC's Registered Office and Registered Agent in Delaware.
In Delaware, members and managers of an LLC are not required to be named on the Certificate of Formation.
Preparation, execution and filing of the Certificate of Formation must be handled by an authorized person or entity; an authorized person is an individual or entity that forms an LLC on behalf of the members by filing the necessary formation documents with the Secretary of State and returning them to the members.
Typically, the authorized person is the LLC’s Registered Agent or an attorney. Once this document is filed, the authorized person releases the LLC to the initial member(s).
The legal instrument that releases the LLC to the initial member(s) is called the Statement of the Authorized Person; this statement is prepared and signed by the Registered Agent, and it is not provided to the state of Delaware.
This information is not required to be filed publicly in Delaware.
Why would someone from outside the United States form a company in Delaware? There are numerous advantages to non-residents of the U.S.A. who form companies in Delaware.
When all of an LLC's income is Non-United States Source Income (as defined by the IRS), the members of the LLC who are not residents of the U.S.A. are typically not subject to U.S. federal income taxation.
U.S. non-residents can take advantage of Delaware’s freedom of contract and strong legal infrastructure without having to provide any member information on the public record; they can also operate their LLC anywhere in the world.
For help determining if your company earns U.S. source income, view the helpful Summary of Source Rules for Income of Nonresident Aliens provided by the IRS.
For more information or questions regarding U.S. company formations for non-residents, please feel free to call us at 1-800-345-CORP.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 12 comments left for U.S. Company Formations for Non-ResidentsAhmed Elbery said: Thursday, April 11, 2019
need to know what I need to form LLC in delaware and opening an HSBC bank account for the company.HBS Staff replied: Thursday, April 11, 2019
Ahmed, here's what we'll need to form your company:
Interested in US LLC formation with TAX ID & Bank A/C for Non US Resident? Please reply with service cost and process information.HBS Staff replied: Friday, November 2, 2018
Adnan, we would be happy to assist you with forming your LLC and obtaining a Tax ID. Unfortunately, we cannot assist with creating your U.S. bank account. Pricing for our formation services can be found here: https://www.delawareinc.com/ourservices/compare-international-packages/
When you're ready to get started, you can complete the transaction online, or just call, email, or live chat with us and we'll walk you through the process.Viktorija said: Thursday, September 13, 2018
Company - resident of EU country has formed a LLC in Delaware subsidiary of EU-country. Currently we are trying to open bank account in one of US bank, and received rejection as this company is "foreign business". Can you advise some bank that wouldn't treat US company - subsidiary of another EU company as "foreign".HBS Staff replied: Friday, September 14, 2018
Hi Viktorija - Unfortunately, we're unable to point you to a specific bank that can accommodate you. Most US banks require an in-person visit in order to open a business account. We have some additional information here, about halfway down the page: https://www.delawareinc.com/before-forming-your-company/Delaware-company-formations-for-non-residents/
Please feel free to contact us for more information.Nureni Oladipupo said: Sunday, September 9, 2018
Thanks for all the information. Please,if I register a company as a non resident of u.s and the company is operated in another country, do I have to pay any tax to U.S or file returns? Thank you sir.HBS Staff replied: Monday, September 10, 2018
Nureni, for specifics on taxation related to your specific business and situation, you will want to speak to a tax professional. Unfortunately, we cannot provide that information.sony said: Friday, August 17, 2018
Hi Thanks for the information. I would like to start an online business and would like to register it in the US. Is it mandatory to have a bank account in delaware to register a business in delaware or is it fine to have a bank account in any state? Thank youHBS Staff replied: Monday, August 20, 2018
The bank account can be opened anywhere in the world and does not have to be in Delaware or in the US. Usually the US banks need someone to show up in person, with the approved formation documents we provide and the tax id number for the company.
Unfortunately for our international clients, one of the most common and inflexible requirements for opening a business bank account in the United States is showing up in person to do so. Once you've decided on a bank, it's generally a good idea to call ahead to see what is required to open the account, since requirements differ from bank to bank.