How to Set Up a Company in Delaware from India

Why Delaware specifically

More than two-thirds of Fortune 500 companies and the large majority of US venture-backed startups are incorporated in Delaware. That concentration is exactly why it's the default recommendation for founders with fundraising ambitions: US investors, their lawyers, and standard fundraising paperwork (SAFEs, priced rounds, stock option plans) are all built around Delaware corporate law, including its dedicated Court of Chancery for business disputes. Choosing Delaware doesn't make your company more fundable on its own, but choosing a different state can occasionally raise a question from an unfamiliar investor's legal team — friction worth avoiding if fundraising is genuinely on your roadmap.

If there's no US fundraising plan, Delaware's advantages matter much less, and the ongoing franchise tax (explained below) becomes a cost with no corresponding benefit. In that case, an LLC in Wyoming is usually the better fit.

Step-by-step incorporation process

1. Choose your company name — checked for availability against the Delaware Division of Corporations database.
2. Decide your authorized share structure — how many shares to authorize and at what par value. This single decision is what most affects your Delaware fees (both the filing fee and the annual franchise tax), covered in detail below.
3. Appoint a registered agent — mandatory, with a physical Delaware address, to receive legal and tax notices on the company's behalf.
4. File the Certificate of Incorporation — with the Delaware Division of Corporations.
5. Apply for an EIN — from the IRS. Non-resident founders can apply without an SSN, though processing can take longer without one.
6. Adopt bylaws and hold an organizational board resolution — appointing officers, authorizing stock issuance, and setting signing authority.
7. Open a US business bank account — remote-friendly options like Mercury support non-resident founders.
8. Set up your compliance calendar — Form 5472, the March 1 franchise tax deadline, and India-side FEMA/RBI reporting, from day one.

Documents you'll need

• Valid Indian passport (identity verification)
• Proposed company name and business purpose
• Decision on authorized shares and par value (get this reviewed before filing — see the franchise tax section below)
• Registered agent details
• A US business address (a virtual address is acceptable)

Cost breakdown

Delaware's Certificate of Incorporation filing fee depends on your authorized share structure, not a flat rate. For a standard startup structure — a large number of authorized shares (commonly millions, to leave room for future hires and investors) at a very small nominal par value (commonly $0.0001/share) — the filing fee typically lands near Delaware's practical minimum.

Delaware franchise tax, explained properly

This is the single most misunderstood cost of a Delaware C-Corp, and the one that catches founders off guard most often — including a real bill that can look absurd if you don't know this exists.

Delaware offers two calculation methods, and you're allowed to use whichever produces the lower tax:

• Authorized Shares Method (Delaware's default) — based purely on how many shares you've authorized, regardless of actual company value. A startup that authorizes 10 million shares (a common structure to leave room for future hires and funding rounds) can be quoted a franchise tax bill in the tens of thousands of dollars under this method alone — a real shock for a pre-revenue company.
• Assumed Par Value Capital Method — based on your total gross assets and issued (not authorized) shares. This almost always produces a dramatically lower bill for early-stage startups with millions of authorized shares but limited actual assets. Minimum tax under this method is $400.

Both the annual report and franchise tax payment are due together, every March 1, filed electronically through Delaware's online portal. Late filing triggers a $200 penalty plus 1.5% monthly interest on the unpaid balance.

Annual compliance checklist

• Delaware franchise tax + annual report — due March 1, using whichever calculation method produces the lower bill.
• Form 5472 + pro forma Form 1120 — federal information return for foreign-owned entities, due even at zero revenue. Missing it starts at a $25,000 penalty.
• Registered agent renewal — required continuously; lapsing this can put the company out of good standing.
• FLA & APR filing (India side) — yearly Foreign Liabilities & Assets return and Annual Performance Report, filed with the RBI, regardless of US entity type.
• Sales tax registration (if applicable) — required once you cross economic nexus thresholds (commonly $100k in sales or 200 transactions) in any US state.

Common mistakes to avoid

• Authorizing shares without reviewing the franchise tax impact — the single most expensive avoidable mistake on this page.
• Not selecting the Assumed Par Value Capital Method when filing the annual report, and defaulting into a far higher bill.
• Assuming zero revenue means zero filings — Form 5472 and the Delaware annual report are both still due.
• Choosing Delaware without a genuine fundraising plan — if there's no US venture capital or ESOP plan, the ongoing franchise tax is a cost with limited corresponding benefit.
• Letting the registered agent lapse, silently putting the company out of good standing.

Frequently Asked Questions