Why founders pick Delaware
A Delaware LLC is a regular US limited liability company formed under Delaware law. The owner can live anywhere in the world. US citizenship, residency, a visa or an SSN are not required.
Delaware's reputation comes from its legal system, not from low taxes. According to the Delaware Division of Corporations, more than two-thirds of the Fortune 500 and nearly 70% of US-based companies that went public in 2025 are incorporated there.
The draw is the Court of Chancery, a business court without juries where judges hear corporate disputes full time, plus more than a century of case law and flexible statutes for both corporations and LLCs. Investors and their lawyers can predict how a dispute will play out. For a venture-backed startup that predictability matters a lot. For a solo consultant or a small e-commerce brand, it often matters very little.
LLC or C-Corp in Delaware
"A Delaware company" can mean two very different things.
- LLC — flexible, pass-through by default (the LLC itself pays no federal income tax), flat annual state tax, no annual report.
- C-Corp — built for shares, option pools and funding rounds. Pays federal corporate income tax, plus a Delaware franchise tax calculated from its shares or capital and an annual report due March 1.
If venture capital is not on the roadmap, an LLC is usually the better fit. If investors or an accelerator expect equity, a Delaware C-Corp is the norm. Our guide on LLC vs C-Corp covers the trade-offs.
One C-Corp trap is worth knowing in advance: authorizing millions of shares "for flexibility" can push the franchise tax into the tens of thousands of dollars under the Authorized Shares method, while the Assumed Par Value Capital method may bring the same company down to a few hundred. Share structure should be designed before filing.
How forming a Delaware LLC with Edeal works
Everything happens remotely. We handle the state paperwork; you make the decisions and provide the details.
What we do
- check whether Delaware actually fits your business, or whether another state would be cheaper and simpler;
- help you choose between an LLC and a corporation, and design the share structure for a corporation;
- check name availability and file the formation documents with the Delaware Division of Corporations;
- provide the mandatory registered agent with a Delaware address;
- prepare the internal documents, such as the Operating Agreement;
- obtain the EIN from the IRS and get the company ready for a bank account;
- give you a calendar of state and federal obligations.
What we need from you
- a passport for each owner;
- your preferred company name and one or two backups;
- a short description of the business and where your customers are;
- the list of members and ownership percentages;
- your residential address, which can be outside the US.
Timing
On average, a formation with us takes about 10 days. The exact timing depends on the state's workload, the entity type and the EIN: according to the IRS, applicants without a US address cannot apply online, so the number is issued by fax or mail. More in our guide to the EIN for non-residents.
If you want one team to handle it end to end, see our US company formation service for non-residents.
Delaware state fees in 2026
These are government fees paid to the State of Delaware, not Edeal's service fee. Figures per the Delaware Division of Corporations as of October 2026.
LLC
- Certificate of Formation: $110, one time.
- Annual LLC tax: $400 starting with the 2026 tax year. It was $300; Delaware raised it in 2026, and the first $400 payment is due by June 1, 2027. The 2025 tax ($300) was due by June 1, 2026.
- The amount is flat. It does not depend on revenue, profit or assets and is not prorated for a partial year.
- Late payment: a $200 penalty plus 1.5% interest per month on the tax and penalty.
- Annual report: not required for LLCs.
Corporation
- Certificate of Incorporation: from $109, depending on authorized stock.
- Franchise tax: minimum $175 under the Authorized Shares method or $400 under the Assumed Par Value Capital method, and you may use whichever is lower. The cap is $200,000 ($250,000 for Large Corporate Filers).
- Annual report: $50, filed with the tax by March 1. Late filing carries a $200 penalty plus 1.5% monthly interest on unpaid tax.
Delaware state taxes: what actually applies
- Annual LLC tax / corporate franchise tax. A charge for existing on the state register. Every entity pays it, profitable or not.
- Corporate income tax: 8.7% of federal taxable income apportioned to Delaware, according to the Delaware Division of Revenue. It applies to corporations doing business in the state. Corporations whose Delaware activity is limited to managing their own intangible investments may qualify for a holding company exemption.
- No sales tax. Delaware imposes no state or local sales tax. Instead, businesses selling goods or services in Delaware pay a gross receipts tax, with rates that vary by activity from a fraction of a percent to roughly 2%.
For a non-resident, Delaware taxes beyond the annual tax usually appear only with Delaware-source income: an office, staff, a warehouse or sales inside the state. An LLC that is merely registered in Delaware and operates elsewhere typically owes Delaware just the annual tax. The catch is that it may owe taxes in the state where it really operates.
Federal filings: the IRS ignores your state of formation
Federal rules are the same in all 50 states.
- A single-member LLC is a disregarded entity by default: no entity-level federal income tax. Whether a non-resident owner owes US tax depends on whether the income is effectively connected with a US trade or business.
- A single-member LLC owned by a foreign person must file Form 5472 attached to a pro forma Form 1120 for any year with a reportable transaction with its owner, even with zero income. Paying formation costs or funding the bank account counts. According to the IRS, the penalty for failing to file is $25,000, and the package cannot be e-filed. See our guide to Form 5472 for foreign-owned LLCs.
- A multi-member LLC is treated as a partnership and files Form 1065.
- A C-Corp files Form 1120 and pays corporate income tax itself.
"No tax due" and "nothing to file" are not the same thing. Most expensive mistakes we see from non-residents are missed forms, not unpaid tax.
Is Delaware an offshore jurisdiction?
No. An offshore haven usually means zero tax, no reporting and hidden owners. A Delaware LLC sits on a US state register, pays an annual state tax, files federal returns when required, and banks run full KYC on its beneficial owners.
The myth rests on two facts: a company with no Delaware activity owes no Delaware income tax, and the state does not require LLC members to be listed in the Certificate of Formation. Neither hides the owner from the IRS or the bank. And your home country may tax the income of a pass-through LLC directly in your hands. Delaware does not change that.
When Delaware makes sense, and when it does not
Delaware earns its cost if you are raising venture capital, investors require a Delaware C-Corp, you need an option pool, or co-founders want strong, predictable corporate law behind their agreements.
For a freelancer, agency or marketplace seller without investors, the $400 a year buys little, and operating physically in another state adds a second set of fees. We cover this in detail in do you really need a Delaware LLC. For comparison, see Wyoming LLC, Florida LLC and Florida vs Delaware LLC for non-residents.
Doing business in another state
Forming in Delaware does not exempt you from the rules of the state where you actually work. An office, employees, a warehouse or inventory in Amazon FBA centers creates nexus there. The Delaware LLC then registers as a foreign LLC in that state: another filing fee, another registered agent, annual reports and that state's taxes, including sales tax. Our article on nexus across multiple states explains how this works.
That is why our first questions are about where your customers, inventory and team are, not which state sounds best.
FAQ
Can a non-resident form a Delaware LLC without visiting the US?
Yes. The formation documents are filed with the Delaware Division of Corporations remotely, and the EIN is obtained without a trip to the US. You do not need a US address, an SSN or a visa. The one legal requirement is a registered agent with a Delaware address, which Edeal provides.
How much does a Delaware LLC cost to keep each year?
The state charges a flat annual LLC tax of $400 starting with the 2026 tax year, due by June 1 of the following year. There is no annual report for LLCs. On top of that you pay for a registered agent, bookkeeping and federal filings; for a single-member LLC owned by a foreign person that means Form 5472 with a pro forma Form 1120.
Is Delaware a tax-free state?
No. Delaware has no state or local sales tax, but it charges a gross receipts tax on businesses selling goods or services in Delaware, an 8.7% income tax on corporations doing business in the state, and an annual tax or franchise tax on every LLC and corporation. A company that only exists on paper in Delaware usually owes just the annual tax there, but it may owe taxes wherever it actually operates.
Is a Delaware LLC an offshore company?
No. A Delaware LLC is a US entity on the state register. It pays an annual state tax, files federal information returns with the IRS when required, and banks verify its beneficial owners before opening an account. Delaware is chosen for its corporate law and the Court of Chancery, not for secrecy or zero tax.
Does a Delaware LLC with no income still need to file with the IRS?
Usually yes. According to the IRS, a single-member LLC owned by a foreign person files Form 5472 with a pro forma Form 1120 for any year with a reportable transaction with its owner, such as the owner paying formation costs or funding the bank account. The IRS penalty for failing to file is $25,000. The Delaware annual tax is also due whether or not the LLC earned anything.
Should I form a Delaware LLC or a Delaware C-Corp?
If you do not plan to raise venture capital or issue stock options, an LLC is usually simpler: flat state tax, no annual report, pass-through taxation by default. If investors or an accelerator expect shares, a Delaware C-Corp is the standard. Decide before filing, because converting later costs more than forming correctly.
What happens if my Delaware LLC does business in another state?
Having an office, employees, inventory or other physical presence in another state usually creates nexus there. The LLC then has to register in that state as a foreign LLC, pay its fees, appoint a registered agent there and handle its taxes. You end up maintaining two states instead of one.
Not sure Delaware is right for you? Book a consultation and we will review your business model, entity type and taxes before you file.