Can Non U.S. Clients Form Delaware LLCs? YES!

The Delaware Corporate law structure does not impose restrictions on foreign ownership or management, and it does not require a Delaware LLC to have any presence in Delaware except for a registered office and registered agent such as Harvard Business Services, Inc.

The only document required to be filed in Delaware to create the LLC, is the Certificate of Formation. Unlike other states, Delaware requires very little information to be made public in order to form an LLC. The Certificate of Formation filed with the Delaware Secretary of State is required to contain only two articles: the name of the Delaware LLC and the address of the Delaware LLC’s registered office and the name and address of the Delaware LLC’s registered agent in Delaware. At Harvard Business Services, Inc. we serve as registered agent for 30,000 companies.

In Delaware, your anonymity is maintained because members and managers are not required to be named in or to execute the Certificate of Formation. Preparation, execution and filing of the Certificate of Formation must be handled by an authorized person or entity such as Harvard Business Services, Inc. An authorized person is an individual or entity that forms an LLC on behalf of the members by filing the necessary formation documents with the Secretary of State and returning them to the members. Normally, the authorized person is the LLC’s registered agent or attorney. The powers of the authorized person are just to execute the filing of the document with the Division of Corporations. Once the document is filed the authorized person will release the LLC to the initial member(s). The legal instrument that releases the LLC to the initial member(s) is called the “Statement of the Authorized Person”, this statement is prepared and signed by your agent and is not provided to the State of Delaware. It is NOT required to be filed publicly in Delaware.

Why would someone from outside the U.S. file in Delaware? The advantages to our non U.S. clients bear considering. When all the LLC’s income is “Non-United States Source Income” (as defined by the IRS), the non U.S. members of the LLC are typically not subject to U.S. federal income taxation. Our non U.S. clients can take advantage of Delaware’s freedom of Contract and strong U.S. legal infrastructure, without having to provide any member information for public record, and the ability to operate anywhere in the world they choose, without being subject to filing U.S. tax forms.

For help determining if there is US source income, view the helpful Summary of Source Rules for Income of Nonresident Aliens provided by the IRS http://www.irs.gov/businesses/small/international/article/0,,id=96459,00.html

For detailed information regarding US Source income the 2nd chapter of the publication 519 from the IRS is very helpful http://www.irs.gov/publications/p519/ch02.html

For more information or questions regarding the benefit of the Delaware LLC for non U.S. clients please feel free to call or email us at 1-800-345-CORP or info@delawareinc.com!