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abacus-usaJURISDICTIONS

DELAWARE

Although at first glance the US may not appear as an attractive jurisdiction to the offshore investor, Delaware is a popular choice for company incorporation.

It is a reputable jurisdiction that enjoys a modern and flexible approach to company management and has efficient corporate laws and judicial system.

Delaware’s most common business forms are limited liability companies (LLCs).

An LLC has a separate legal form and personality but, unless otherwise desired, can either be treated as a partnership by the IRS (if the LLC has more than one member) or disregarded as a separate entity for tax purposes by the IRS (if the LLC has only one member). Under this tax treatment, an LLC is not subject to entity-level tax on its profits. Rather, the profits derived by the LLC are deemed to belong to its members who are taxed as if they had earned the income directly. Persons who are, neither residents, nor citizens of the U.S. are only subject to U.S. taxation on income derived from sources within the United States, be it through a business activity or through an investment. Therefore, to non-US individuals an LLC can be a very useful vehicle for a variety of investments such as the holding of assets. The only annual requirement of a Delaware LLC is the payment of a franchise tax.

Another attraction of an LLC is that, as the name implies, it offers limited liability. A member of an LLC generally is not liable for the debts, obligations and liabilities of the LLC. Therefore, a member’s liability is generally limited to the amount of money that the member has invested in the LLC. Depending on the business plans of the LLC, we generally recommend that an LLC be formed with an initial capital contribution of USD 1000.
Unlike Gibraltar or BVI Companies, LLCs are not governed by a memorandum and articles of association. Instead, the business and affairs of an LLC are governed by an operating agreement which provides significant flexibility, and need not be filed with any U.S. authority. The certificate of formation is the only document that requires filing.

The procedure for forming an LLC may be accomplished very quickly, at times even within a 24 hour period.

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