Why is Delaware a “tax haven” for any offshore companies?

Choosing the right city for your business is a big step. You decide how the company grows into a large, thriving business and what incentives you get when you claim a company in a particular state or city.

If you have experienced the Internet and searched for places to incorporate your business in the US, you may have come across many different languages ​​recommending this location – Why Choose An Offshore Company In Delaware?


Delaware is one of 50 countries in the United States, located in the South Atlantic or Southern counties. About 63% of the Fortune 500 and more than half of the total are traded in the United States on an open market association incorporated in Delaware.

One of the main reasons why offshore companies in Delaware are getting so much attention is the state’s operating laws.

It has become easier to start a business abroad now than it used to be.

Tax Heaven in Delaware. Source: Internet


Some of the reasons that make Delaware a tax haven are as follows:

1. Premium security

Companies may not be required to disclose who their officials and directors are when filing in-state records at the company’s scheduled hours.

2. No state tax

There is no business tax in Delaware. It doesn’t matter if a company’s physical division is located in the state.

As a Delaware business, no purchases in the state are taxed. Furthermore, there is no state corporate income tax on products and businesses provided by Delaware partners working outside of Delaware.

3. Small LLC Number and Franchise Tax

Most states require an annual deduction, and LLC taxes depend on earned income. The Delaware Franchise Tax is an annual franchise fee for LLCs and Limited Partnerships.

Organizations’ franchise taxes are determined based on the type of company, the number of shares allowed, and various variables.

Delaware, in all cases, offers a licensing fee franchise tax of $100 and a licensing fee LLC tax of $300.

In contrast to various states, Delaware offers exponentially lower franchise and LLC taxes.

4. Flexibility to incorporate S-Corporation and LLC

Delaware licenses S-Corps, which can provide many tax benefits. S-Corps has investors. However, they do not pay government-level taxes.

Similarly, LLCs are also allowed in the state of Delaware. This type of company allows the business owner to reduce the risk and reap the benefits from it.

By using S-Corps and LLCs, a corporation can completely reduce its quarterly tax payments.

5. Separate Court System

Delaware has another court system known as the Premier Courts. This court allows the state to mediate corporate lawsuits, and its corporate law often affects decisions. Chosen by the Supreme Court.

6. Open a foreign bank account

Any investor opening an offshore company in Delaware can open an offshore bank account in any foreign jurisdiction.

An offshore bank account can benefit the account holder in several ways.

Nowadays, it is very beneficial to set up an offshore company in a tax haven as it can effectively protect your assets and wealth.

Wondering how to continue? Do not worry. Your guide is right below!

ICOS is one of the leading business consultants in Vietnam and has helped some investors and owners bring their dream businesses together around the world.

Our legal advisors are very familiar with the incorporation procedures and can help you come up with the right solutions.

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