Delaware Offshore Company
The Delaware Limited Liability Company (LLC) is a legitimate US limited liability company internationally recognized and accepted. Investors who desire a US company with which to trade and or invest have the option of choosing a US company that has the advantage of being tax-free.
Though the Delaware Limited Liability Company is not an offshore company, when the Delaware Company is formed and incorporated by a non-US nationals and the business of the offshore LLC is wholly offshore, that is to say, conducted outside the United States, any income generated from such business activities under the LLC is tax free under US systems. As such, it is sometimes called the “Delaware offshore company” or “Delaware Company for non-residents”.
An LLC is not limited by shares and as such does not have any shareholders, the member of an LLC are called members. The LLC is a legitimate entity that is treated separately from the members. Because shares are not issued by LLCs there is no authorized capital requirement.
In a Delaware LLC, the assets of the beneficial owners is carefully protected, and the company is subject to “pass-through” or “flow through” taxation which means the LLC does not pay corporation tax; members are responsible for personal income the on profits distributed.
One or more members or organizers can form Delaware Limited Liability Companies, though it is often recommended the LLC have more than two members to benefit from tax exemptions. There is no limit on the number of members.
Take note, the US tax authority can categorize a Delaware LLC as a taxable branch of a foreign company if the members of the LLC are companies (non- resident, so it is best if the members of an Delaware offshore company in LLC form are persons rather that corporations
Similarly, if the LLC is treated like a Sole Proprietorship when owned by one member and the member is a non-resident alien, and the LLC derives its income outside of the US, the tax free benefit will be lost when treated like a Sole Proprietorship by the Internal Revenue Service (IRS)
Limited Liability companies are designed to protect the members (owners) from the debts and other obligations of the LLC. Such that the members risk in a Delaware offshore LLC limited to the investment in the LLC, personal effects property and assets are not subject to risk..
To be considered a Delaware offshore company, the company should be wholly owned by non-residents, though not necessary. The company cannot employ US residents as staff, nor can it have resident place of business in the United States.
Delaware Limited Liability company formation beings with the certificate of formation which contains: the name of the company; the name and address of the registered agent; and the address of the company. The member may choose to include the company’s by-laws. The name of the company must have the phrase Limited Liability or the appropriate abbreviation (LLC) affixed to it. Delaware LLCs may also include the words; Association, Institution, Union, Company, Foundation in the name.
The Management of an offshore LLC is normally performed by the members. but a non member manager may be employed, reporting directly to the members. There is no requirement to hold member meetings or maintain records. Annual financial reports are required, which sets out the distribution of profits to US residents.
The names of the members of an offshore LLC are not part of any document filed with the state. The members names are known only to the registered agent which is a statutory requirement. It will normally take seven working days to incorporate a Delaware offshore company in the form of an LLC.