Offshore: Delaware

Offshore Corporate Services in Delaware: Summary Guide

Delaware is a small U.S. state on the Atlantic Coast, known for its business-friendly laws and strong corporate environment. It became the first U.S. state in 1787 and remains a leading jurisdiction for company formation, especially for global entrepreneurs. Despite its size, Delaware offers excellent access to major U.S. markets, strong banking infrastructure, and a reputation for corporate stability.

Geography & Background

The state features two main landforms—the Piedmont Plateau and the Atlantic Coastal Plain. Delaware’s flat terrain makes transportation and logistics easy. Historically, it was home to Native American tribes before becoming one of the original 13 colonies. Today, Wilmington is the commercial hub, hosting the state’s major financial institutions.

Infrastructure Snapshot

Delaware offers good connectivity, strong schooling, and access to the East Coast economic corridor. While the wider U.S. faces infrastructure challenges, Delaware continues upgrading transportation, housing, and utilities to support residents and businesses.

Economic Highlights

Delaware’s diverse economy includes agriculture (poultry, dairy, corn), chemical manufacturing, finance, and trade. Wilmington acts as a major seaport and business center. The state’s strategic location and mild climate help support strong agricultural and industrial growth.

Legal Environment in Delaware

Legal System

Delaware’s laws come from the state’s General Assembly. The Delaware General Corporation Law (DGCL) is nationally recognized for its clarity and fairness, making it the top choice for incorporation.

Banking & Regulatory Structure

The U.S. federal system regulates banks through the Federal Reserve, FDIC, and OCC. Delaware is uniquely attractive because of its Court of Chancery, where corporate disputes are resolved quickly by experienced judges rather than juries.

AML & Compliance Status

The U.S. is not considered an offshore financial center and is not on the FATF deficiency list.
In the 2016 evaluation, the U.S. was Compliant or Largely Compliant with the majority of FATF standards.

Corporate Structures Available in Delaware

Why Businesses Choose Delaware

Delaware is known for:

• Fast and flexible incorporation

• Strong legal protections

• No state tax on income earned outside Delaware

• Favourable usury laws for financial companies

Corporate Entities

• Delaware Corporation

• Delaware LLC (popular for international clients)
  LLCs offer pass-through taxation and strong asset protection. Non-US residents can use LLCs for offshore activities that generate no U.S.-sourced income and therefore remain tax-free.

Bearer Shares

Delaware bans bearer shares. Only registered shares are allowed.

Taxation in Delaware

Delaware offers several key tax advantages:

• No sales tax

• No corporate income tax for companies earning outside Delaware

• No tax on investment income held in Delaware holding companies

This makes Delaware a leading jurisdiction for international structuring.

Registering a Delaware Company

Any foreign-owned company operating in the U.S. must register under state law. Delaware offers a fast and reliable incorporation system. Offshore LLCs and corporations can be set up for global trading without paying U.S. tax (subject to IRS rules on income source and residency).

Understanding the Delaware Loophole

Some corporations use Delaware holding companies to legally reduce taxes due in other states. This is done through intangible asset management under Delaware law.

Delaware LLC Highlights

• No shareholders; owners are called members

• Members can be individuals or companies, though individuals are preferred for tax efficiency

• Strong privacy: members’ names are not listed in public filings

• No meeting requirements

• Income “flows through” to the members, avoiding corporate tax

• Must not employ U.S. residents or operate physically in the U.S. if aiming for offshore tax benefits

Delaware Corporations

Delaware corporations are widely used by financial companies due to flexible laws and favourable interest-rate regulations. Nearly 50% of S&P 500 companies are incorporated in Delaware.

Shares & Par Value

• Corporations with under 5,000 shares pay the minimum franchise tax.

• Par value can be extremely low ($0.000001), allowing flexibility.

Classes of Stock

• Common and preferred stock may be issued.

Entity Comparison (Simplified)

Delaware LLC

• Government fee: approx. USD 300

• No corporate tax on foreign income

• No public access to records

• Annual return: Not required

Delaware Corporation

• Government fee: approx. USD 225

• No tax on foreign profits

• Public access to corporate records

• Annual return: Required

U.S. federal tax rules may still apply depending on income source and member residency.

Special Features of Delaware Offshore Companies

Language & Currency

• English is the official language

• Currency: U.S. Dollar (USD)

• No exchange controls

Permitted Company Types

• Delaware Corporation

• Delaware LLC

Registered Office

All entities must maintain a registered agent and address in Delaware.

Name Requirements

• Must be unique

• Cannot use words like bank or university without approval

• Must end with the required suffix (Inc., Corp., LLC, etc.)

Name Restrictions

Names suggesting banking, trust, or insurance require special approval.

Terms & Conditions

All information is based on guidelines from relevant authorities. Laws may change, and clients will be notified of updates when services are provided.

Please refer to our SERVICES for more information or CONTACT us if you wish to avail these or many other services.