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Is Delaware the cheapest place to incorporate?

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Is Delaware the cheapest place to incorporate?

#1

Post by ddxv »

I am living in Taiwan and want to create a startup. The business will be mostly open source and likely to have low to no revenue.

I see that US states like Colorado have no franchise tax. But I also saw posts here that Delaware is usually ultimately cheaper.

What is the recommendation for a company to manage an open source project? Sure it might be worth money, but likely not, so I would like to keep money tight.

thanks!

Re: Is Delaware the cheapest place to incorporate?

#6

Post by ddxv »

mytailorisrich wrote: post #5

How is it in Taiwan? I know nothing about it and the paperwork involved, but a quick search [1] suggests that the fee is NT$700, or about US$22, which does not sound expensive. [1] https://bizportal.moea.gov.tw/showPageEngDetail?search=16

Thanks for asking the obvious, which I hadn't though of yet. I've only heard fairly negative things about incorporating in Taiwan, but I don't know the specifics, and am unclear how much is repeated bias. I wil ask people who know more to explain that to me.

Re: Is Delaware the cheapest place to incorporate?

#7

Post by brudgers »

ddxv wrote: post #4
mnky9800n wrote: post #2

what is the point of having a company if it doesn't have any revenue?

That's a fair question. I felt like it was forcing myself to have some accountability and responsibility.

Before you start a Deleware C corp, discuss the idea with your lawyer. If you don't have a lawyer now, you will almost certainly wind up with one if you start a Delaware C corp because Delaware C corps have sophisticated filing requirements and non-trivial fines if you don't meet those requirements.

And honestly, a Delaware C corp would be "playing house." The hard work is finding customers/users not filling out forms and writing checks.

Good luck.

Re: Is Delaware the cheapest place to incorporate?

#8

Post by giantg2 »

brudgers wrote: post #7
ddxv wrote: post #4

Earlier quoted context omitted.

That's a fair question. I felt like it was forcing myself to have some accountability and responsibility.

Before you start a Deleware C corp, discuss the idea with your lawyer. If you don't have a lawyer now, you will almost certainly wind up with one if you start a Delaware C corp because Delaware C corps have sophisticated filing requirements and non-trivial fines if you don't meet those requirements. And honestly, a Delaware C corp would be "playing house." The hard work is finding customers/users not filling out form…

Probably better to go with an LLC. In many states they are low cost and have few requirements, but still provide limits on liability and provide a professional image. If the startup becomes successful enough to need a corporate structure, then you can hire the lawyer and go the more expensive route.

Re: Is Delaware the cheapest place to incorporate?

#9

Post by satya71 »

You'll need a Delaware C-Corp to receive funding. If funding isn't on the cards, a simple and cheap LLC is the best. Delaware C-Corp has a bunch of reporting requirements and a scary default tax treatment. It's not for the uninitiated.

As someone else noted, Taiwan-based company. If you must have a US entity, LLC is the best for a one-person company. If you do raise funding or become big, it's trivial to convert to a C-Corp.

Re: Is Delaware the cheapest place to incorporate?

#10

Post by satvikpendem »

ddxv wrote: post #4
mnky9800n wrote: post #2

what is the point of having a company if it doesn't have any revenue?

That's a fair question. I felt like it was forcing myself to have some accountability and responsibility.

Don't do it. I actually did something similar and it was a bad idea, simply because the business had not made any money and had to be shut down eventually. It really was "playing house" like the other commenter said. Make money first, then incorporate.
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