Optimal Setup for a Digital Company

[Gante]

Hello,

Today, I am reaching out to ask for advice on the best setup for a company that operates exclusively through international digital sales.

We are considering Delaware as a potential jurisdiction, and I have a few questions regarding this:

1. What documents are required to set up a company in Delaware?
2. Which agent would you recommend to assist with the company formation process in Delaware?
3. As a French citizen, do I have the right to establish a company in Delaware?
4. What would the tax rate be for a company primarily selling outside the USA, operating solely through digital sales, and with no American employees?

If I have overlooked any crucial details, please feel free to let me know.

Additionally, if you have suggestions for other locations that might be a better fit, I would greatly appreciate your input.

Thank you in advance for your responses

 

[daniels27]

We are considering Delaware as a potential jurisdiction, and I have a few questions regarding this:

Delaware is mainly aime at companies you want to sell. Wyoming, New Mexico would be cheaper alternatives for your goal (most likely).

As a French citizen, do I have the right to establish a company in Delaware?

Yes. (But note that as a French resident, you have the honour to pay tax on the profit of your US company.)

What would the tax rate be for a company primarily selling outside the USA, operating solely through digital sales, and with no American employees?

Tax is the same as for a company registered where you are living / managing the company from.

Additionally, if you have suggestions for other locations that might be a better fit, I would greatly appreciate your input.

Wyoming, New Mexico. (There may be better ones, depending on your residence.)

 

[Gante]

Hello,

Thank you for your response. Which agent would you recommend for setting up a company in one of the states you mentioned?

Delaware is mainly aime at companies you want to sell. Wyoming, New Mexico would be cheaper alternatives for your goal (most likely).


Yes. And as a French resident, you have the honour to pay tax on the profit of your US company.


Tax is the same as for a company registered where you are living / managing the company from.


Wyoming, New Mexico. Most likely, a SASU will be the better fit as you have less complications with French taxes if you live in France.

 

[ilke]

We are considering Delaware as a potential jurisdiction

It could work. Not the best, not the worst. Fees are somewhat high and the secretary of state is quite slow, but the state is well-known and trusted. Other US states like Wyoming or Florida might make more sense based on the individual case.

What documents are required to set up a company in Delaware?

Nothing special. The registered agent may or may not ask for your ID. Otherwise just info about yourself, your address, name of the company.

Which agent would you recommend to assist with the company formation process in Delaware?

Harvard Business Services or A Registered Agent Inc. are quite good for the state. They are the most frequent/notorious virtual addresses/registered agents but the pricing and setup is reasonable.

As a French citizen, do I have the right to establish a company in Delaware?

Yes, of course. Nobody will stop you from doing that.

However, keep in mind, if you are resident in France, or other jurisdictions with applicable PE/CFC laws that would affect the company, you will be required to pay taxes, either as a corporate, or as a person with business activity.

What would the tax rate be for a company primarily selling outside the USA, operating solely through digital sales, and with no American employees?

0%. No ECI so no US tax, the LLC transparently distributes to you.

Additionally, if you have suggestions for other locations that might be a better fit, I would greatly appreciate your input.

Depends on your residency. Can you share it here?

 

[daniels27]

Thank you for your response. Which agent would you recommend for setting up a company in one of the states you mentioned?

Please see my notes here:

D

Post in thread 'Cheapest online offshore company formation destinations to utilize non dom benefits'

Jan 4, 2025

What does the fees look like? for EIN, mail forwarding address, incorporation fee, name reg fee, annual audits need?, annual renewal fee?, Why did u choose new mexico when most people say go for wyoming or delware?

There is a good overview of the popular states here:
https://wyomingllcattorney.com/Form-a-Wyoming-LLC/vs-Nevada-Delaware-New-Mexico

Wyoming is cheapest and often chosen because Wyoming has no corporate taxes. Nevada is their competitor.
New Mexico is best for a bit more anonymity and lower carrying cost.
Delaware has extensive case law and is thus chosen for...

• daniels27

• 

 

[Gante]

Depends on your residency. Can you share it here?

Yes sure , i from France

 

[daniels27]

Yes sure , i from France

To be honest, you are probably best helped with a French company (unless you are relocating elsewhere). Of course, you can add a US entity, but in the long run, it will cause you nothing but troubles.

• Banking access will be more difficult
• Credit Card acceptance will be difficult and expensive
• Tax problems with the French authorities in regards to the US LLC, how is it taxed etc.

And there will be 0 tax savings possible. You pretty much can only lose.

(The exception would be if you are a multi million dollar venture able to set up a corporate headquarter in a low tax jurisdiction, adding a Irish subsidiary solely for payment processing and banking access, etc. Then, it would make sence. But I am not so sure of this is the case with you.)

 

[Gante]

To be honest, you are probably best helped with a French company (unless you are relocating elsewhere). Of course, you can add a US entity, but in the long run, it will cause you nothing but troubles.

• Banking access will be more difficult
• Credit Card acceptance will be difficult and expensive
• Tax problems with the French authorities in regards to the US LLC, how is it taxed etc.

And there will be 0 tax savings possible. You pretty much can only lose.

(The exception would be if you are a multi million dollar venture able to set up a corporate headquarter in a low tax jurisdiction, adding a Irish subsidiary solely for payment processing and banking access, etc. Then, it would make sence. But I am not so sure of this is the case with you.)

I'm ready to move to another country if I have to ,France is hell.

 

[daniels27]

I'm ready to move to another country if I have to ,France is hell.

Good choice! You have any preference? Switzerland is getting full, but Malta, etc. still have space. What is the business about?

 

[ilke]

I'm ready to move to another country if I have to ,France is hell.

As @daniels27 said, you will not really gain anything by registering a US company while living in France, because the company will still be a tax resident of France.

When you accept relocation, you have quite a lot of options.

If you want to stay in the EU (not particularly recommended but also very understandable), maybe Cyprus or Malta to best match the current lifestyle. Hungary and Bulgaria have good tax opportunities but harder to get around without the language.

Otherwise of course a lot of LatAm - Costa Rica, Dominican Rep., Paraguay... and some Asian options too.

 

[Gante]

No, I don't necessarily have a preference, I'd just like a place where I can work in good conditions and spend part of the year. As for my business, I work in the telecoms sector.

Good choice! You have any preference? Switzerland is getting full, but Malta, etc. still have space. What is the business about?

 

[daniels27]

No, I don't necessarily have a preference, I'd just like a place where I can work in good conditions and spend part of the year. As for my business, I work in the telecoms sector.

Then maybe Japan, Thailand, Vietnam and the Philippines each a couple of months and then a US LLC that nobody cares and all is tax free? I think @NewHorizonsParaguay is giving out free residencies in Paraguay, while others prefer Peru. I think it is a matter of taste.

 

[diro]

There are hundreds of providers, as you can see in the thread referenced above. Setting up a company like that costs less than $500.

Since you're from France, you could just move to the French-speaking part of Switzerland like so many others have, it comes with some benefits. Otherwise, yeah, Malta, Cyprus, Bulgaria, or Portugal are the ones we've discussed here on OCT plenty of times already if you want to stay within Europe.

 

[Marzio]

Malta, etc. still have space.

Malta has 1,783 people per square kilometre, more than three times the next most densely populated country in the EU

What is the company revenue?