Opening an LLC in Delaware
- Common Law: Delaware Limited Liability Company Act (Title 6, Chapter 18, Delaware Code)
- Country: United States of America
- Foreign Income Taxation: Zero Tax — Foreign-source income is exempt from Delaware state income tax.
- Incorporation: Immediate — among the fastest in the United States
- Anonymity: ★★★ — details of members and officers are not disclosed in the founding documents
- EIN: Required to open a US bank account
- Reporting Requirement: IRS Forms 5472 and 1120 annually
- Delaware LLC opening cost: $800 (one-time)
- Annual Franchise Tax: 300 USD
- Corporate structure: Member Managed or Manager Managed, with no minimum capital requirements, no requirement for meetings, directors or secretary
How to Open an LLC in Delaware
Studio Panama Italia regularly handles company incorporations in Delaware— Delaware LLCs —through its offices in the state of the same name. Opening a Delaware company as a Delaware LLC has historically been a popular choice among digital nomads, international entrepreneurs, and companies operating in a wide variety of sectors. Opening an LLC in Delaware allows you to operate with a white-listed U.S. company while maintaining an offshore structure with zero taxes on foreign-source income.
Studio Panama Italia, through its American holding company Shevat Consulting LLC, acts as a Registered Agent and Organizer in the United States to establish American LLCs, including Delaware LLCs. With a Delaware company, you can open PayPal accounts, receive payments via Stripe, Wise, Revolut, and Neteller, and open both online and physical bank accounts at major American banks.
Starting a company in Delaware is one of the most advantageous options available to current and future entrepreneurs for a flexible and easily managed remote business. Delaware is one of the most popular jurisdictions in the world for incorporation: nearly half of publicly traded companies in the United States and over 65% of all Fortune 500 companies are incorporated in Delaware, including giants like Apple, Coca-Cola, Google, and Walmart.
The Court of Chancery of Delaware
Delaware is distinguished by its Court of Chancery, the oldest business court in the United States, specializing in corporate law. The Delaware Court of Chancery uses judges rather than juries and is experienced in complex corporate law matters. The Delaware court maintains the most advanced and up-to-date corporate case law, ensuring regulatory predictability and reducing liability and litigation among Delaware LLCs.
These predictable and clear laws allow companies to more accurately assess the likely outcome of litigation or the opportunity to settle a case. The legal protections and limitations of liability provided by Delaware's well-established law make it one of the most respectable states for businesses in the United States.
A Delaware LLC requires minimal corporate structure for its management: there are no mandatory provisions for corporate meetings, directors, a secretary, or minimum capital. A Delaware LLC can be formed by a single member (member-managed), who can also act as manager (manager-managed).
Delaware LLC Taxes and Duties
Delaware LLCs can choose to be treated as C-Corporations (subject to corporate tax) or as tax-transparent entities (disregarded entities). Profits of a Delaware LLC that chooses tax transparency are passed through to its members and taxed at the personal level. Members of the Delaware LLC pay personal income taxes on the LLC's profits in proportion to their ownership interest, whether the profits are distributed or retained.
This means that a Delaware LLC is not considered a separate entity for tax purposes: if its members are non-U.S. tax residents, they will be required to pay U.S. taxes only on their U.S.-sourced income (territorial taxation). If the members' country of residence taxes their foreign-source income, they may be subject to taxes on foreign profits in their country of residence, depending on local law.
Corporations incorporated in Delaware are confidential: details of members, managers, and officers are not disclosed in the company's charter documents and are not available to the public. Delaware also offers one of the fastest corporate registration procedures and among the lowest incorporation costs in the United States.
Delaware LLCs are excellent vehicles for international professional services, international trade, e-commerce, Amazon FBA, and merchant account access.
Delaware LLC vs. UK Ltd: A Detailed Comparison
Many international entrepreneurs consider a Delaware LLC as an alternative to a UK Ltd (Private Limited Company). Both are corporate structures established under common law jurisdictions, but they present substantial differences in terms of taxation, privacy, compliance requirements, and operating costs. The following table compares a Delaware LLC with a UK Ltd on all parameters relevant to a non-resident foreigner intending to operate remotely.
| Parameter | LLC Delaware (USA) | UK Ltd (United Kingdom) |
|---|---|---|
| Legal basis | Delaware Limited Liability Company Act — Common Law USA | Companies Act 2006 — Common Law UK |
| Corporate form | LLC — limited liability company with no minimum capital | Private Limited Company (Ltd) — requires at least £1 of capital |
| Taxation of foreign income (non-residents) | Zero Tax — Foreign-source income is exempt from Delaware state tax and federal tax if the LLC is foreign-owned without ECI | Corporation Tax at 25% on worldwide income if the Ltd is considered UK resident (management and control in the UK) |
| Tax transparency (pass-through) | Yes — a Delaware LLC can be a tax-transparent entity (disregarded entity). Profits and losses pass through to the members | No — a UK Ltd is always an independent tax entity. There is no pass-through |
| Corporate tax rate | 21% federal (on U.S. income only) + 8.7% Delaware state (on Delaware-derived income only) | 25% Corporation Tax on worldwide income (19% for profits under £50,000) |
| VAT / Sales Tax | No sales tax in Delaware | Mandatory 20% VAT above £90,000/year |
| Privacy and anonymity | High — Details of Delaware LLC members and officers are not public in the incorporation documents | Nothing – director names and PSCs (Person with Significant Control) are public on Companies House |
| Public register | Only the LLC name and Registered Agent. No personal information is visible | Director, secretary, PSC, registered address and annual financial statements are all public on Companies House |
| Annual reporting obligation | Form 5472 + Form 1120 to the IRS (even without income). No public budget | Confirmation Statement + Annual Financial Statements filed at Companies House (public) + Corporation Tax return to HMRC |
| Incorporation cost | 800 USD (one-off with Studio Panama Italia) | 12–50 GBP at Companies House |
| Annual maintenance costs | 300 USD Delaware franchise tax + Registered Agent cost | 13 GBP Confirmation Statement + mandatory accounting (variable UK accountant fees) |
| Incorporation speed | Instant — among the fastest in the US | 24–48 hours via Companies House online |
| Bank account | You can open an account at U.S. banks (Chase, Bank of America, Mercury) with an EIN. You can also open a corporate account remotely | Can be opened at UK banks, but compliance is increasingly stringent for non-residents. Often requires in-person or video calls |
| Access to digital platforms | PayPal USA, Stripe, Wise Business, Revolut Business, Amazon FBA, Neteller | PayPal UK, Stripe UK, Wise Business, Revolut Business, Amazon FBA UK |
| International reputation | Maximum — 65% of the Fortune 500 is incorporated in Delaware. Court of Chancery specializes | High — the UK is a strong and globally recognised jurisdiction |
| Minimum structure required | No director, secretary, minimum capital, or mandatory meetings. Only one member is required | At least one director (natural person), one registered PSC. Secretary optional. Meetings not mandatory |
| CRS (automatic information exchange) | No — the US does not participate in the CRS | Yes – the UK joins the CRS and exchanges information with Italy/EU |
| Ideal for | International entrepreneurs, digital nomads, e-commerce, holding companies, offshore businesses with US reputability and zero taxes on foreign income | Business with UK/EU clients, local UK operations, service companies with UK presence |
For international entrepreneurs and digital nomads who don't physically operate in the UK or the US, the Delaware LLC offers decisive advantages over the UK Ltd: zero tax on foreign income, tax transparency (pass-through), complete member anonymity, no CRS membership, and no public accounting. The UK Ltd remains a valid choice for those with clients or direct operations in the UK market, but for those operating remotely and seeking legitimate tax optimization, the Delaware LLC is the most efficient corporate structure.
Delaware Corporation Tax: Detailed Tax System
Delaware LLC Tax Residency: A corporation organized or incorporated under the Delaware General Corporation Law is a tax resident of Delaware and the United States.
Delaware LLC Tax Basis: Federal income tax is levied on U.S. effectively connected income (ECI), while Delaware state income tax is levied on Delaware-sourced income.
Delaware LLC Taxation: Delaware limited liability companies can choose to be taxed as a C-Corporation or as a disregarded entity. Alternatively, an LLC can choose to be treated as a transparent entity for the purposes of its member's personal income: in this case, it is not subject to federal corporate income tax, and profits and losses are reported on the members' personal tax returns.
Therefore, if the owners of the Delaware LLC are non-U.S. residents (and not subject to U.S. personal income tax) and the LLC does not operate and generate profits from the United States, does not lease or own property in the U.S., has no U.S. employers, and no effectively connected income (ECI), the offshore income accrued by the Delaware LLC cannot be taxed in the United States.
Delaware LLC Tax Rates
| Tax item | Rate / Details |
|---|---|
| Federal Tax (C-Corp) | 21% |
| Delaware State Tax | 8.7% on Delaware-derived income |
| Income from foreign sources | Exempt from Delaware state tax |
| Long-term capital gains (>12 months) | Applicable federal tax rates; offsettable capital losses, carry forward 3 years, carry forward 5 years |
| Short-term capital gains (≤12 months) | Taxed as ordinary income |
| Dividends between US companies | 70% deductible; up to 80% if participation is 20–80% |
| Dividends from foreign entities | They can be deductible income |
| Withholding tax on non-residents | 30% on dividends, interest and royalties (reducible via tax treaty) |
| Interest and royalties | Generally included in the tax base |
| Personal holdings (passive income) | 15% on retained earnings |
| Sales tax (VAT) | It does not exist in Delaware |
| Property tax | It doesn't exist in the US |
Foreign Source Income and Delaware LLCs
Corporations are taxed on worldwide income, including income from foreign subsidiaries and foreign-source dividends received. Double tax relief can be achieved through tax treaties, tax credits, or by claiming a deduction for foreign taxes paid. A foreign subsidiary more than 50% owned by US tax residents is considered a controlled foreign corporation (CFC); certain undistributed income (Subpart F income) retained in a CFC will be subject to tax.
Passive income retained in a foreign investment company (75% or more of the income is passive, or at least 50% of the assets held produce passive income) may also be subject to tax.
Anti-evasion and compliance regulations
Related-party transactions must be conducted at arm's length. If a company fails to comply, the IRS may increase its taxable income and the tax payable. Thin capitalization rules apply to disallow interest payments on excess debt, qualifying them as dividends.
Employment Taxes and Tax Credits in Delaware
Employment Taxes: Employers may be subject to a 6.20% Social Security tax on the first $127,200 of wages and a 1.45% Medicare tax on any wages. A 6.2% Federal Unemployment Insurance Tax (FUTA) is also levied on the first $7,000 of wages.
Tax credits and incentives: A tax credit or deduction is generally available for foreign taxes paid. Credits are also available for qualified research expenses (QRE) to develop new or improved products, processes, or software in the United States.
Compliance: A business in the United States can require an average of 11 payments and 175 hours per year to prepare, file, and pay taxes.
Delaware Personal Income Tax
An individual is considered a U.S. tax resident if they are a citizen, permanent resident, or physically present in the U.S. for 31 days in the current year and a total of 183 equivalent days in the current year and the two preceding years. Tax residents are subject to tax on their worldwide income. The federal tax rate is progressive from 0% to 39.6%; Delaware's state rates are progressive up to 6.6%.
Self-employed individuals may be subject to a 15.3% self-employment tax (12.4% Social Security + 2.9% Medicare). Capital gains from assets held for more than 12 months are subject to a maximum rate of 20%.
Other taxes in Delaware: There is no value-added tax (VAT) or sales tax in Delaware. Real estate and the transfer of assets are subject to local taxes. Estates are taxed in the United States. There are no estate taxes in the United States.
Legal Basis for Incorporating a Delaware LLC
| Voice | Details |
|---|---|
| Country code | USA |
| Legal basis | Common Law |
| Legal framework | Delaware Limited Liability Company Act (Title 6, Chapter 18, Delaware Code) |
| Corporate form | Limited Liability Company (LLC) |
| Responsibility | Limited to the extent of members' capital contributions |
| Capital | There is no minimum or maximum contribution requirement |
| Delaware LLC Members | One or more members, natural or legal persons, resident or non-resident. The identity of the members is not publicly disclosed |
| Manager LLC Delaware | Members can act as managers or appoint an external manager. Details are not publicly available |
| Registered Agent | Required in Delaware — an individual or entity with a physical address in the state that accepts legal documents on behalf of the LLC |
| General Assembly | No legal requirement for formal member meetings |
| Electronic signature | Allowed |
| Redomiciliation | Foreign entities and other U.S. companies can continue in Delaware |
| EIN | Mandatory — required by most banks to open a business bank account |
| Accounting compliance | Mandatory accounting records, which can be kept anywhere in the world. Annual IRS Forms 5472 and 1120 filings |
Delaware LLC for digital nomads, e-commerce, and Amazon FBA
The Delaware LLC is one of the most popular American corporate structures among digital nomads, e-commerce entrepreneurs, and Amazon FBA. Thanks to Delaware's international reputation (65% of the Fortune 500), its Court of Chancery specializing in corporate law, and its pass-through tax transparency, the Delaware LLC offers digital professionals a highly credible operating platform for accessing the American market.
With a Delaware LLC, you can open accounts on Stripe USA, PayPal Business, Wise Business, Amazon Seller Central, Shopify Payments, and any American merchant platform. For digital nomads operating from countries with territorial taxation—such as Panama, Paraguay , or Mexico —a Delaware LLC allows you to operate with a white-listed American company with zero taxes on foreign income, combining institutional credibility and tax efficiency.
A Delaware LLC is also the preferred structure for e-commerce , dropshipping, SaaS, digital consulting, and any online business that benefits from the reputation of an entity incorporated in the first state in the union. Unlike a New Mexico LLC (preferred for anonymity) or a Wyoming LLC (preferred for asset protection), a Delaware LLC is the natural choice when credibility with investors, business partners, and financial institutions is a priority.
Tax implications for Italian residents with Delaware LLCs
Italian tax residents who own a Delaware LLC must carefully consider the reporting requirements under Italian law, regardless of whether the LLC is tax-exempt in the U.S. The main tax implications for Italians are:
- RW Form (tax monitoring) — Participation in a Delaware LLC must be declared in the RW Form of the Italian tax return for the purposes of monitoring financial assets held abroad. Failure to do so results in penalties ranging from 3% to 15% of the undeclared value.
- IVAFE — The tax on the value of financial assets held abroad (IVAFE) applies to the participation in the Delaware LLC, currently equal to 0.2 percent of the value of the participation.
- Income taxation in Italy — If the Delaware LLC is treated as a disregarded entity, income is attributed directly to the Italian member and taxed at progressive income tax rates (from 23% to 43%), regardless of profit distribution. Italy does not automatically recognize the tax transparency of American LLCs: the Italian Revenue Agency may reclassify the LLC as an autonomous tax entity.
- CFC (Controlled Foreign Company) Regulations — If the Delaware LLC is owned by an Italian resident and operates under a preferential tax regime (as in the case of a foreign-owned LLC with zero federal taxes), the CFC regime set forth in Article 167 of the TUIR may apply, with all the LLC's income being taxed transparently in Italy.
- Italy-US Double Taxation Agreement — The bilateral agreement can reduce or eliminate double taxation, but its application depends on the specific structure of the Delaware LLC, the member's tax residency, and the nature of the income. The agreement does not apply automatically; it requires a case-by-case assessment.
- Permanent Establishment — If the Delaware LLC conducts business in Italy through a fixed location (office, warehouse, Italian employees), it may establish a permanent establishment subject to taxation in Italy. In this case, it may be required to open a local branch with the Italian Chamber of Commerce.
Annual accounting of Delaware LLC
Every foreign-owned Delaware LLC is required to file Form 5472 and Form 1120 with the IRS annually, even if there are no income or assets. Failure to file carries a penalty of $25,000 for each missed year—one of the most severe penalties in the U.S. tax system. This also includes paying the annual Delaware franchise tax of $300 and renewing the registered agent.
services annual accounting , including preparation and filing of IRS forms, franchise tax payment, deadline management, and ongoing support to keep the Delaware LLC fully compliant with federal and state requirements. This service is available for both LLCs incorporated by our firm and existing LLCs requiring a change of registered agent or accounting assistance.
Get a real US address in Delaware
in addition to the Registered Agent address physical address in the United States. Insurance companies, credit unions, banks, government agencies, clients, and platforms like PayPal USA, Wise, and Revolut require a corporate address other than the incorporation or Registered Agent address.
Studio Panama Italia offers an exclusive physical address in Delaware to receive mail, packages, and parcels, with scanning service available and shipping options to Italy or anywhere in the world. The Delaware address costs $350/year with an initial setup fee of $400 (first year total: $750, subsequent years: $350).
Get real proof of address in Delaware
In some cases, having a US address isn't enough: banks, credit unions, and government institutions require actual proof of address, such as a paper utility bill or invoice issued to the LLC at an address in Delaware. Studio Panama Italia offers a real phone line service, installed in the desired state, with a monthly paper invoice sent to the LLC's US address. Contact us to activate this service.
Open your LLC in Delaware
Quick, anonymous incorporation with zero taxes on foreign income. A US bank account is included in the service.
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