Overview:

Setting ambitious goals and achieving them is the very essence of entrepreneurship. When one has achieved certain results in their business, they want to master new heights, for example, open a new company in another country.  

Today, we will talk about the USA and the best states where a foreigner can register a company on favorable terms. Originating a business entity in the United States is a good way to expand your business globally. An LLC or limited liability company is considered to be the best option for a company status in the US. 

To conclude in which of the 50 states, one federal district, and 5 territories it is better to start up a business for a foreign entrepreneur, we’ll use knowledge about the USA tax system in different states.

The Best US State to Register a Business Entity for a Non-resident

In which state is it better to incorporate a company for a foreign entrepreneur in America? By and large, all paths are free and a company may be registered in any of the 50 states, but some of them may indeed be more “attractive”. Which ones? To determine this, let's start with taxes first. 

The trustworthy and well-known organization — the Tax Foundation annually publishes the US State Tax Climate Rankings, which showcase the states with the most prosperous conditions for entrepreneurship in terms of laying taxes approach, tax diversity, and their rates.  It is an independent organization, which has been involved in tax research for more than 80 years already. Many reputable business publications refer to their reports. The study, which contains the entire methodology for calculating state ratings depending on taxes, can be found here.

TOP 10 US States for LLC Registration

This is a TOP ranking consisting of 10 US states with the best tax policies for registering a business entity:

1. Wyoming 
2. South Dakota 
3. Alaska 
4. Florida 
5. Montana 
6. New Hampshire 
7. Nevada 
8. Oregon 
9. Utah 
10. Indiana

You can also see a sketch of the tax policies of different US states below:

Let's take a quick look at the states to see how they earned their place in the TOP 10: 

Wyoming 

• Corporate tax rate: 0%
• Personal income tax rate: 0% 
• Sales tax rate: 4% 

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South Dakota 

• Corporate tax rate: 0% 
• Personal income tax rate: 0% 
• Sales tax rate: 4.5% 

Alaska 

• Corporate tax rate: 9.4% 
• Personal income tax rate: 0% 
• Sales tax rate: 0% (but at the local level, municipalities can raise it up to 7%) 

Florida 

• Corporate tax rate: 5.5% 
• Personal income tax rate: 0% 
• Sales tax rate: 6% 

Montana 

• Corporate tax rate: 6.75% 
• Individual income tax rate: from 1% to 6.9% depending on income 
• Sales tax rate: 0% 

New Hampshire 

This state has an additional Business Enterprise Tax, which was originally set at 0.75% of the tax base of the value of the enterprise. 

• Corporate tax rate: 7.9% 
• Personal income tax rate: 0% (5% on dividends) 
• Sales tax rate: 0% 

Nevada 

• Corporate tax rate: 0% 
• Personal income tax rate: 0% 
• Sales tax rate: 6.85% (locally up to 8.26%) 

Oregon 

• Corporate tax rate: 6.6% on the first million $, 7.6% on income over $1 million 
• Individual income tax rate: from 5% to 9.9% depending on income 
• Sales tax rate: 0% 

Utah 

• Corporate tax rate: 5% 
• Personal income tax rate: 5% 
• Sales tax rate: 4.7% (6.85% for Salt Lake City) 

Indiana 

• Corporate tax rate: 6% (by 2021 will be reduced to 4.9%) 
• Personal income tax rate: 3.23% + small county tax rate of up to 0.021% 
• Sales tax rate: 7%

Delaware

Delaware is one of the most popular jurisdictions in the United States for registering corporations. For several years in a row, it has been in 11th place, but you should also pay attention to it.

One of the benefits of Delaware is that there is no state income tax. There is another tax — the so-called franchise tax (it is fixed) in the amount of $300/year (the amount may vary depending on the company's turnover and the type of activity).

But huge corporations choose the state of Delaware because of the state's judicial system, which is even called the "Delaware Corporate Shield." Delaware laws provide the best protection for business owners' personal assets from creditors. Delaware has a separate court called the Court of Chancery. Its judges have extensive experience in resolving business disputes, and the state has the largest case base in the country. In sum, this allows even very complex economic disputes to be resolved quickly (within weeks, not years) and as "transparently" as possible.

To incorporate an LLC in Delaware with Clevver.io assistance is the right decision because pricing starts from 129 Euros here. Visit our site to learn more.

Final Thoughts

Do not forget about the simple truth: how many people — so many opinions. It is crucial to remember that you ought to focus on the needs of your business. You can concentrate on absolutely any indicators that are important for its prosperity. 

Such states as Delaware and Wyoming are definitely worth considering to open the LLC. These states provide excellent opportunities for registering companies by non-US residents + the cost of registering/maintaining companies in these states is one of the best in the country. Clevver specialists support the company incorporation in any of the 50 states on request.

DISCLOSURE NOTICE: Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be used, and cannot be used against Clevver or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation. Clevver does not provide any legal advice itself. Clevver works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.