v256.2 · business formation · US · verified 2026-04
Delaware company formation
Entity types, formation timeline, costs, ongoing compliance, banking realities, and 2024-26 regime changes for incorporating in Delaware.
Corporate tax
21% federal + Delaware 8.7% (Delaware franchise tax replaces state income tax for companies not doing business in DE)
Formation time
1-3 business days (24-hour expedited available)
Min capital
No minimum (typically $0.0001 par value × authorized shares)
Director residency
No US residency required for directors
Available entity types
C-Corporation S-Corporation LLC LP LLP Statutory Trust
Formation costs & timeline
Cost range: USD 90 state fee + $200-1,500 registered agent + $500-2,500 attorney/service
Timeline: 1-3 business days (24-hour expedited available)
Common setup paths: Online via Delaware Division of Corporations or services (Stripe Atlas, Clerky, Firstbase, Doola). Registered agent required (CSC, CT Corporation, Northwest Registered Agent typical $100-300/year).
Rate landscape & compliance
| Corporate tax | 21% federal + Delaware 8.7% (Delaware franchise tax replaces state income tax for companies not doing business in DE) |
| Franchise tax | Delaware franchise tax: $400 minimum (Authorized Shares Method) or $400 minimum (Assumed Par Value Capital Method); cap $200K for very large companies |
| VAT / GST | No federal VAT/GST; Delaware no state sales tax |
| Treaty network | US has 60+ income tax treaties (Delaware entities access these) |
| Shareholder residency | No US residency required |
| Public register | Officers and directors not publicly listed; only registered agent. Beneficial owners reported via CTA BOI (FinCEN) since Jan 2024 — non-public. |
| Annual filings | Annual franchise tax + annual report to Delaware. Federal IRS Form 1120 (C-Corp) or 1065 (LLC pass-through). State income tax filing only if doing business in DE. |
| Substance requirements | Pure paper-residence acceptable for non-Delaware operations. Federal tax substance rules apply for US tax residency. |
Recent regime changes (2024-2026)
Corporate Transparency Act (CTA) BOI reporting began Jan 1 2024; District court rulings (March 2025) paused enforcement against domestic companies pending appeal; foreign-formed entities still subject. Delaware franchise tax thresholds unchanged 2024-25.
Strengths
- Delaware Court of Chancery — world's most sophisticated corporate law court with 200+ years of precedent
- DGCL (Delaware General Corporation Law) is the gold standard — incorporated companies span 65% of Fortune 500
- 24-hour expedited formation available
- No US residency required for directors or shareholders
- Series LLC structure available for asset-segregation
- Standard VC/PE term-sheets assume Delaware incorporation
Drawbacks
- US citizenship-based taxation reaches global income for US-person owners
- Franchise tax stacks if authorized shares high (Assumed Par Value method usually lower)
- CTA BOI reporting since Jan 2024 (paused for US-formed in March 2025 ruling, scope volatile)
- Foreign owners must obtain ITIN/EIN, navigate FBAR + FATCA filings
- C-Corp double taxation (entity + dividend)
Typical uses & top industries
Typical uses:
Startup C-Corp (preferred by US VCs) Holding companies M&A vehicles LLCs for asset holding
Top industries:
Tech startups Financial services SaaS Pharma Biotech
Source: official Delaware registry/authority · Last verified 2026-04
See also: full business-formation directory