Company Incorporation in United States of America (USA)

After Company incorporation, you will receive below documents

• Tax Residency:
  • • A corporation established under the Delaware General Corporation Law is considered tax resident both in Delaware and the United States.
• Basis:
  • • Federal income tax applies to US effectively connected income (ECI), while Delaware state income tax applies to income generated within the state.
• Taxation:

  Delaware corporations can choose to be taxed as either S-Corps or C-Corps

  • o C-Corps are subject to federal and state income tax.
  • o S-Corps, on the other hand, pass their income or losses to shareholders, who report them on individual tax returns. Shareholders must be US citizens or residents.
• Tax Rate:
• • Resident corporations face a 21% tax rate, while Delaware imposes a state income tax rate of 8.7% on income derived within its borders
• Capital Gains:
  • • Long-term gains or losses stem from assets held for over 12 months, while short-term gains or losses come from assets held for 12 months or less.
  • • Capital losses can offset gains, with excess losses carried forward or backward within specific limits
• Dividends:
  • Dividends received by a US corporation from another US corporation may be deductible up to 70%.
  • • Inter-corporate dividend payments may be exempt under certain conditions.
• Interests and Royalties:
  • • Interests and royalties are typically included in the taxable base.
• Foreign Source Income:
  • • Corporations are taxed on worldwide income, with relief from double taxation available through treaties or foreign tax credits.
• Withholding Taxes:
  • • Non-residents face a 30% withholding tax on dividends, interests, and royalties, which can be reduced or eliminated by tax treaties.
• Losses:
  • • Taxable income losses can be carried forward for 20 years or carried back for 2 years.
• Inventory:
  • • Inventory can be valued based on acquisition/production costs or market value, using FIFO or LIFO methods.
• Anti-Avoidance Rules:
  • • Transactions between related parties must adhere to arm's length terms to avoid IRS adjustments.
• Labor Taxes:
  • • Employers may pay social security and Medicare taxes, along with federal unemployment insurance taxes.
• Tax Credits and Incentives:
  • • Various tax credits and deductions are available, including those for foreign tax paid, business investments, and research expenditures.
• Compliance:
  • • Companies typically make 11 payments and spend 175 hours annually on tax-related compliance.
• Personal Income Tax:
  • • US tax residents, including citizens, permanent residents, and certain non-residents meeting specific criteria, are subject to tax on worldwide income.

• Shares and Shareholders:
  • • There's no minimum share capital requirement for Delaware corporations. They must specify the number of shares they're authorized to issue and their par value, though nopar value shares are also permissible.
  • • Corporations can be established by one or more shareholders, who can be individuals or legal entities, residents or non-residents, without any restrictions. The personal details of shareholders remain confidential.
• Directors :
  • • A Delaware corporation must have at least one director, who can be a natural person, residing anywhere, and may also be a shareholder. Director information is not publicly disclosed.
  • • Directors of publicly traded companies may need to meet certain qualifications, including independence from the company or its management in specific cases.
• Secretary:
  • o • Appointment of a secretary may be required by the company
• Registered Address:
  • • Every Delaware corporation must have a registered agent for service of process in the state. This agent could be an individual or a business entity authorized to operate in Delaware, with a physical address in the state.
• General Meeting:
  • • While a meeting is required, it can be held in any country. The board of directors can decide if the meeting may be conducted solely through remote communication. Failure to hold an annual meeting doesn't affect the validity of corporate actions.
• Compliance:
  • • Corporate records, including stock ledger, accounting books, and minutes, must be kept at the corporation's principal office, which can be located in any country
  • • Delaware doesn't mandate filing financial reports or appointing auditors. Instead, corporations file an annual franchise tax report and pay an annual corporate franchise tax, with a maximum of US$180,000. Tax payment and filing are due by March 1st, in US dollars and drawn on US banks.
  • • A corporation's annual report must be signed by a director or officer, and failure to file it or pay franchise taxes can result in the corporation being voided.
  • • Every domestic or foreign corporation doing business in Delaware must file a corporate income tax return and a gross receipts tax return, unless exempt. Entities solely maintaining a registered office without conducting business in Delaware may be exempt.
  • • Delaware corporations also file federal income tax returns. US entities with significant foreign ownership may need to file IRS Form 5472.