Establishing an offshore company in the United States is no different from opening a business in other countries. A company may be established in one or more states of the country. When registering a company in the USA, it is important to bear in mind that the country has a two-level tax system, which consists of state and federal taxes.

IMPORTANT. Each state in the United States has its own regulations regarding the incorporation of a foreign company and each state has its own requirements for incorporating a company. Therefore, each state requires a different set of documents for company registration. You should familiarise yourself in advance with state laws and the amount of taxes and charges in order to submit a proper set of documents. It is also important to note that in addition to state taxes, there is a system of federal taxes and charges. For the purposes of this article, we will look at starting a company in one of the most popular states for this purpose, Delaware.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Organisational and legal forms

Delaware law provides for the possibility of establishing:

  1. Business Corporation;
  2. Not-for-Profit Corporation;
  3. Limited Liability Company;
  4. General Partnership;
  5. Limited Partnership;
  6. Sole Proprietorship.

One of the most popular and widespread legal forms is

Limited Liability Company. A Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is allowed in most states. This organisational structure has the advantage of limited liability, like a corporation, as well as tax efficiency and operational flexibility, like a partnership. The owners of the company are called members, and the length of existence of an LLC is usually determined by its members in the articles of association, which may be extended at a later date. Membership is open to both legal entities and individuals, there are no residency requirements and the minimum number is 1. There is no minimum amount of share capital.

Requirements for the company name:

  1. The company name must contain the words "Limited Liability Company" or the abbreviation "L.L.C." or the designation "LLC";
  2. The company name must be different from that of the registered companies;
  3. The company name must not contain the following words: board of trade, state police, chamber of commerce, state trooper, community renewal, tenant relocation, corporation, urban development, incorporated, urban relocation, partnership;
  4. The company name must not contain the following words or their abbreviations: acceptance, guaranty, annuity, indemnity, assurance, insurance, attorney, investment, bank, lawyer, benefit, loan, bond, mortgage, casualty, savings, doctor, surety, endowment, title, fidelity, trust, finance, underwriter unless an endorsement by the head of the state banking department or the head of the insurance department is attached to the articles of association, or the words "doctor" or "lawyer" or an abbreviation is used in a context that means a purpose and not the practice of law or medicine;
  5. Unless the approval of the state social services department is attached to the articles of association, it must not contain the word "blind" or "handicapped". Such approval must be granted by the Department of Social Services if, in its opinion, the word "blind" or "handicapped" used in the name of the limited liability company would not mislead the public into believing that the company is established for charitable or non-profit purposes relating to the blind or handicapped;
  6. Unless the approval of the Attorney General is attached to the articles of association, it must not contain the word "exchange" or its abbreviation. Such approval would not be granted by the Attorney General if, in their opinion, the use of the word "exchange" in the name of a limited liability company would imply that the company is doing business where brokers, dealers or traders are trading in securities or commodities;
  7. The company name must not contain the following terms: "school," "education," "elementary," "secondary," "kindergarten," "pre-kindergarten," "preschool," "nursery school," "museum," "history," "historical," "historical society," "arboretum," "library," "college," "university" or other terms prohibited by Art. 224 of the Education Act; "conservatory," "academy," or "institute," or any prohibited abbreviations or derivatives of these terms that require the approval of the Commissioner of Education.

Key stages of registration

The establishment of a company in individual states has its own specific features defined by local legislation. However, the key steps in registering a company remain the same regardless of the state. For instance:

  1. the choice of legal form of organisation;
  2. the definition of the company name, which must not repeat any of those already registered;
  3. the selection of the state in which the incorporation of the company will take place;
  4. Identification of a registered agent – an individual or legal entity who will be responsible for the relationship between the public authorities and the future company itself;
  5. filing an application with the Secretary of State;
  6. Registering a company with the US Internal Revenue Service and obtaining a Federal Tax ID to run your business.
  7. Opening a bank account.
  8. Specify the legal address of the company for receiving business correspondence.
  9. Licensing of certain company activities in the USA (if necessary).
  10. Preparation of internal corporate documents, appointment of a director of the organisation.

US offshore zones

A company registered in the United States is a reliable and prestigious tool for carrying out various transactions, conducting business activities and performing operations of all kinds. At the same time, US offshore zones are a concoction of unscrupulous intermediary registrars who attract those wishing to register a company in a foreign jurisdiction. It should be remembered that US legislation does not provide for offshore companies in this country. Why is there the perception of the functioning of such zones in the US? First of all, the reason is that it is perfectly possible to do business in this country legally and with no tax obligations on the company.

For companies incorporated in the form of an LLC, the legislation provides for a Disregarded entity regime, in which the income of the entity is equal to the income of its owner. However, if the owner is a non-resident of the country and does not receive money within the US, there is no need to pay any taxes. The use of this regime does not even require reporting. In essence, when incorporation firms offer to purchase an existing offshore company in the US, they mean providing the client with just such a company. It is not a "tax-free haven" in the traditional sense.

In practical terms, in the US, offshore companies operate according to the scheme described.

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