Setting Up A Business In Nevada or Delaware

I've heard a lot of things about Nevada and Delaware being great for businesses because of the fact that they don't tax corporations. But I don't live or directly do business out of these states. So if you set up a business in Nevada or Delaware what else do you have to do in the state that you actually operate the business out of?

Basically I'm wondering what I have to do to properly set up a business in Nevada or Delaware to avoid having to pay taxes on the income the business generates.

I've been wondering this for a while and hopefully this is the appropriate place to ask as I would assume a lot of people do this for their ecommerce business or website.

 

Until you are netting $50,000 or so per year from your business it is not worth it. Even then it would be questionable. To much hassle and expense for to little benefit.

 

Can you explain more in detail?

 

I did a bit of research on this a few years ago when I was incorporating my offline business. Both my accountant and attorney basically said it wouldn't be worth the time or expense because I would still have to register in my own state as a "foreign corporation" and would still have to pay the usual taxs to my own state (sales tax, payroll taxes etc.)

This was about 5 or 6 years ago, so things may have changed. Your best bet would be to find an CPA or a tax attorney and get a professional opinion.

 

Ok I figured it wouldn't make much sense because I didn't know how you would actually get around being registered in the state you operate the business out of and paying the taxes in that state.

Thanks guys

 

Most states have become pretty savvy about this kind of thing. Taxes would have to be paid at least on any direct income you draw from the business, plus (I believe) on any dividend income from it. So in a way, it's not really worth it from a tax standpoint.

Now if you were really worried about liability and corporate veil issues, then these states are supposedly (I haven't looked too deeply, as I don't have enough to claim) better for asset protection.

 

If you are like most people where your house is your major asset, you can get much the same asset protection more cheaply and easily with a living trust. You can set up a living trust on your own with some software from www.nolopress.com The major thing with a living trust is that you must actually record the deed transfering the property from you to your trust with the county clerk. If you fail to take that step you are just wasting your time.