From Zero to Hero Demystifying the Process of Delaware Company Formation!

From Zero to Hero Demystifying Delaware Company Registration

In today's globalized business environment, an increasing number of entrepreneurs and business owners are choosing to incorporate overseas to benefit from more flexible legal frameworks, favorable tax policies, and broader international market recognition. Among the many offshore jurisdictions, the U.S. state of Delaware stands out as one of the most popular destinations.

According to a recent Wall Street Journal report as of 2025, over 70% of publicly traded companies in the United States are incorporated in Delaware, and more than one million companies worldwide have been registered there. These figures clearly highlight Delaware’s status as a global hub for corporate registration.

So, what makes Delaware so attractive? And for entrepreneurs new to overseas incorporation, how can they start from scratch and uncover the secrets behind it?

Why Delaware?

First and foremost, Delaware boasts a highly business-friendly and mature legal system. As early as the late 19th century, the state had already enacted modern corporate laws. In the early 20th century, it established a specialized court system-the Court of Chancery-to handle corporate disputes. This court operates without juries and is presided over by expert judges, delivering decisions known for their predictability and consistency-critical factors for businesses.

According to a Bloomberg report from early 2025, Delaware's corporate law is widely referenced and emulated globally, with many countries drawing inspiration from its legal framework when drafting their own corporate laws.

Second, tax policy is another key draw. Delaware does not impose state income tax on companies that do not operate locally. Businesses are only required to pay annual fees and a one-time registration fee-greatly benefiting multinational and startup companies. Additionally, there is no high tax on franchises, and companies are not required to maintain a physical office in the state. This means that a company headquartered in China can incorporate a legal entity in Delaware without needing a local office or employees.

Third, privacy protection is a major advantage. When registering a company, there is no requirement to disclose the identities of the actual owners. Shareholders, directors, and officers can be represented by a registered agent, offering a high level of confidentiality. According to a March 2025 Forbes report, an increasing number of tech startups and crypto-related businesses have chosen to register in Delaware, largely due to its strong privacy protections and favorable legal environment.

From Zero to One How to Register a Delaware Company

For those new to the process, registering a company in Delaware may seem complex and unfamiliar. In reality, by following a few key steps, the process can be both efficient and straightforward.

Step 1 Choose the Type of Company

Delaware allows the formation of various types of entities, including Limited Liability Companies LLCs, C Corporations, and S Corporations. For most international businesses, an LLC is the most common choice due to its flexibility in taxation and limited liability protection. C Corporations are typically more suitable for companies planning to go public on U.S. stock exchanges.

Step 2 Appoint a Registered Agent

Under Delaware law, every company must have a Registered Agent based in the state to receive legal and official documents. The agent must have a physical address in Delaware. Many professional service providers offer this service, typically charging between $100 and $300 annually.

Step 3 File the Registration Documents

The registration process is usually completed online. First, conduct a name search to ensure the desired company name is available. Then file the Certificate of Incorporation for corporations or Articles of Organization for LLCs, and pay the associated registration fee. Currently, the filing fee for an LLC is approximately $90, while for a C Corporation it is around $89.

Step 4 Obtain an EIN Employer Identification Number

After registration, the company must apply for an EIN from the Internal Revenue Service IRS. This number is necessary for opening a bank account, signing contracts, and filing tax returns. Non-U.S. residents can apply online or through an authorized agent.

Step 5 Annual Compliance and Fees

Each year, Delaware companies are required to pay franchise taxes and annual fees. LLCs must pay a flat annual tax of $300, while C Corporations pay between $170 and $375, depending on the number of authorized shares. Companies must also submit an annual report to keep their information up to date.

Real-World Example How Chinese Companies Use Delaware to Go Global

In recent years, more and more Chinese companies have chosen to incorporate in Delaware to enter international markets. For instance, in early 2025, a Shenzhen-based AI technology company, Zhisuan Tech, registered a subsidiary in Delaware as a stepping stone for expanding into the North American market. In an interview with First Financial Weekly, the CEO stated that the decision was based not only on Delaware’s tax benefits and legal protections but also on the state’s high recognition in global capital markets-key advantages for future fundraising and potential IPO plans.

Similarly, some cross-border e-commerce platforms are leveraging Delaware’s incorporation advantages to quickly establish overseas operations. A Hangzhou-based entrepreneur revealed in an April 2025 interview that by registering a Delaware LLC, he successfully opened multiple branded stores on Amazon U.S., set up a U.S. bank account, and registered trademarks-all within just two weeks.

Conclusion

Starting from scratch and incorporating a company in Delaware is not complicated, as long as one understands the legal framework, tax policies, and registration procedures. As globalization continues to accelerate, more businesses are setting their sights on international markets. Delaware, with its mature corporate ecosystem and flexible registration mechanisms, remains the top choice for companies aiming to go global.

For entrepreneurs looking to expand overseas, understanding and mastering the Delaware incorporation process is undoubtedly a crucial first step toward unlocking the doors to the international market.