Delaware was the first state to join the United States, hence its nickname as “The First State”. Thanks to tax incentives and a superior judicial system in Delaware, it has become one of the most popular places in the United States for startups to register. More than half of the world’s top 500 companies have registered offices or branches in Delaware, and a third of the companies listed on the New York Stock Exchange are registered in Delaware.
1. The state constitution stipulates that the increase of existing or new taxes must be approved by three-fifths of state councils.
2. There are no sales taxes for state and local governments.
3. Reducing or deducting corporate income tax and gross tax revenues for businesses that are newly established or expanded.
4. Newly-built or expanded businesses established in designated areas may enjoy further reductions or deductions in respect of corporate income tax and gross revenue tax.
5. There is no personal property or inventory tax.
6. Corporate income tax is levied on the net amount of income and the newly purchased assets are allowed to depreciate quickly.
● Corporate Law
The corporate law structure in Delaware is sound and flexible. The procedure for setting up the company is simple and the cost is low. The company’s form enjoys convertibility when necessary. It prefers to protect the interests of investors, major shareholders, and management but not the minority shareholders. Consequently, many listed companies will choose Delaware as a proper place in the United States to register. If the company is an investment company there is no actual business meaning no office, no permanent staff, no direct industry, etc. In this case, setting up the investment headquarters in Delaware is a feasible option. Even if you later develop a business entity in a state, it is easy to solve the problem. You can apply for an “Outside State License.”
Delaware has two universities, three colleges, and four community colleges. The University of Delaware at Newark is the largest institution of higher education in the state. Delaware State University is located in Dover. The four-year private colleges include Wilmington College in Newcastle, Goldey-Beacom College in Wilmington, and Wesley College in Dover. The Delaware Technical and Community College System have four campuses in Dover, Georgetown, Wilmington, and Newark.
The Delaware State Highway Network is centered in Wilmington. Interstate highways connect directly to New York, Philadelphia, Baltimore, and Washington. The Philadelphia-Baltimore railroad crosses the northern part of the state for passenger transportation. Wilmington is the shipping destination and airport. It is only one and a half hour drive from Washington and New York City. The traffic is convenient and the location is moderate.
1. Corporate income tax: Most companies or employers are required to pay corporate income tax, but the nature or form of the business determines which taxes need to be paid.
2. Investment Tax Credits: Qualified companies enjoy a 3% corporate income tax credit. Purchases and leases of tangible assets in the course of business enjoy tax credits. The state encourages capital investment and tax credits can reduce the cost of investment expansion.
3. R & D tax credits: The state provides manufacturers and R & D companies with tax credits to expand investment, designed to eliminate barriers as well as promote growth and innovation. The project is similar to federal tax relief. According to the Corporate Consumption Tax Regulations of Chapter 63 of the state law, any foreign or domestic company may apply for a R&D tax credit.
4. Unified sales tax: This measure increases the attractiveness of the state’s tax environment. In contrast to the implementation of the three-factor calculation model in many states to determine net income, the unified sales tax policy of Massachusetts helps reduce the burden on businesses.
5. Tax Incremental Finance (TIF): The state’s incremental tax financing policy helps provide flexible and targeted tax incentives to promote job creation.
Massachusetts has a large number of institutions for higher learning. Harvard University in Massachusetts is a member of the Ivy League. It ranks first in the United States. There are three universities that belong to the Seventh-Column School: The Lady of Holland, Smith College, and Wellesley College. Science and technology-oriented universities include Massachusetts Institute of Technology (MIT), Worcester Polytechnic Institute and Clark University which is famous for its psychology and geography.
● Technology and Talents
Massachusetts ranks third in the US Biotechnology Development Index. Massachusetts’s high-tech companies rank first in terms of per capita and venture capital investment. Massachusetts offers one of the largest R&D tax credits in the country. Massachusetts occupies half of the Nobel Prize winners in the United States.
● Corporate Law
For Massachusetts companies, the government charges $275 if the registered capital does not exceed 275,000 shares. Each additional 100,000 shares will increase the cost of 100 US dollars. Shareholders may be natural or legal persons of any nationality. Shareholders’ information is not openly queried. Directors and senior officials may be natural persons of any nationality who have reached the age of 18 years. Their information may be publicly queried. The Massachusetts government requires the registration of a state company has an individual or company with a residence in the state as a registered agent and a registered address of the state.
South Carolina (SC)
South Carolina has strong industrial, scientific and technological strengths. It also has highly efficient labor resources, as well as more than 200 international companies. It is the state with the largest share of the state’s total labor force in international companies in the United States.
The vast railway and highway network is spread throughout the state. The total length of the road is nearly 100,000 kilometers. Charleston has 20 routes for scheduled flights. Georgetown Port can handle ocean cargo, and coastal canal that connects Miami and New York through this state.
● Housing Price
Although house prices have risen in the United States, there are still some cities where housing can be afforded. The U.S. News and World Report released the 2017 ranking of the most suitable cities for living in the United States. This ranking considers indicators such as the job market, value, quality of life, satisfaction and net inhabitants of the 100 most populous cities in the United States. According to this ranking, the business insider has sorted out American cities that have an average price of less than 250,000 and are livable. South Carolina is among them.
As we can see, different states have various advantages. Startups may choose the location that they register in according to their various needs and requirements.