The primary reason to incorporate in Delaware is the many protections Delaware’s laws and courts offer. Delaware’s strong and well-proven asset protection shield protects the personal assets of company owners. This shield protects both Delaware corporations and Delaware LLCs.

There are two major reasons for Delaware’s dominance of the corporate incorporation business. The other major reason corporations choose to incorporate in Delaware is the quality of Delaware courts and judges. Delaware has a special court, the Court of Chancery, to rule on corporate law disputes without juries.

Delaware has been preeminent as the place for businesses to incorporate since the early 1900s, and its incorporation business, supplemented by the growth in numbers of such “alternative entities” as limited liability companies, limited partnerships and statutory trusts, continues to grow smartly.

The Top 10 Reasons to Incorporate in Delaware

• The Corporate Law Expertise Of The Delaware Court of Chancery.
• The Extensive Precedent of Delaware Corporate Case Law.
• The Flexibility Of Delaware Corporate Statutes.
• Corporate Attorneys Are Familiar With Delaware Law.
• Angel and VC Investors Prefer To Invest In Delaware Corporations.

Reasons Not to Incorporate In Delaware 1) Your business is not going to be funded by venture capital. You’ll need to pay taxes on any revenues that originate in your home state, and you’ll be subject to annual reporting requirements both in Delaware and your home state. 3) Delaware has a franchise tax.

The state has no value-added taxes (VATs), it does not tax business transactions, and it does not have use, inventory or unitary tax. There is no inheritance tax in Delaware, and there are no capital shares or stock transfer taxes.

Delaware The state’s 8.7% flat corporate income tax rate leads to tax collections that are the fourth highest in the country, and combined with a personal income tax, they help allow Delaware to charge no sales tax.

The financial industry made up more than 38% of Delaware’s total GDP in 2011, far ahead of the next-highest-producing industry, real estate. Delaware’s business-friendly environment, with cheap incorporation fees and friendly corporate law, has made the state a haven for public companies.

Delaware No conditions – Delaware is sales tax free! However, for businesses, Delaware does impose gross receipts tax – which constitutes some percentage of the receipts of goods sold by the business in the given state. So, while Delaware residents get a break from sales tax, they may be paying for it in other ways.

Social Security and Railroad Retirement benefits are not taxable in Delaware and should not be included in taxable income. Also, Delaware has a graduated tax rate ranging from 2.2% to 5.55% for income under $60,000, and 6.60% for income of $60,000 or over.

1) Delaware consistently ranks as one of the “Best Places to Retire.” The criteria used by this January 2020 Wallethub study is some of the best I’ve seen. They covered affordability, health-related factors, and overall quality of life. Delaware ranks #6!

Delaware doesn’t tax “intangible assets,” and this encourages companies to move parts of their business to Delaware to avoid taxes in other states. This has led to Delaware being labeled a “tax haven.” It is the laws of states other than Delaware that allow this system to work.

How Your Delaware Paycheck Works. When you get paid, your employer takes out income taxes from your paycheck. For Delaware residents, it also includes state income taxes, as well as local taxes for people who live or work in Wilmington.

In Delaware in fiscal year 2015, 41.2 percent of total tax revenues came from license taxes. Income taxes accounted for 40.6 percent of total state tax collections. Education accounted for 28.2 percent of state expenditures in fiscal year 2015, while 19.2 percent went to Medicaid.

Tax Benefits of Living in Delaware

• Delaware is one of five U.S. states that levies no sales tax of any kind.
• Delaware’s income tax rates are relatively low.
• Social security income is not subject to state income tax, nor is the first $12,500 of investment or pension income.

10 Reasons to Move to Delaware

• No Sales Tax in Delaware. Delaware is one of just five states in the nation that imposes ZERO sales tax, which makes it a shopper’s paradise!
• Other Tax Advantages.
• Perks for First-Time Homebuyers.
• Central Location.
• Educational Opportunities.
• Top Retirement Destination.
• Clean, Beautiful Beaches.
• Arts & Culture Abound.

The state of Delaware does not impose a tax on personal and real property. However, real property may be subject to school district property taxes, county property taxes, any municipal property taxes, and vocational school district taxes.

Retiring in Delaware is a good idea but like in anything, there are pros and cons. The benefits include lower taxes, lovely beachy views, and a vibrant senior community. However, the high population density may be a problem for a retiree looking to keep a low profile.

The cost of living in Delaware City, DE is 1.3% higher than in Baltimore, MD. You would have to earn a salary of $60,776 to maintain your current standard of living. Employers in Delaware City, DE typically pay 3.6% more than employeers in Baltimore, MD.

2021 Delaware crime rates Delaware has the lowest population in the South Atlantic region with only 973,000 people. So while The Blue Hen state had fewer instances of property and violent crime, its crime rates per 1,000 residents made it the third highest in violent crime and fourth in property crime in the region.

Top 6 Cities to Retire in Delaware

• Wilmington.
• Dover.
• Milford.
• Smyrna.
• Newark.
• Middletown.

Wilmington

Delaware places ranked by per capita income

Newark

These are Some of the Best Places to Live in Delaware

• Claymont.
• Wyoming.
• Lewes.
• Yorklyn.
• Ocean View.
• Milton.
• Rehoboth Beach.
• Seaford.

An amount below 100 means Delaware is cheaper than the US average. A cost of living index above 100 means Delaware, Delaware is more expensive….Delaware cost of living is 102.7.

• Happy Valley. Neighborhood in Wilmington, DE.
• Rehoboth Beach. Town in Delaware.
• Forty Acres. Neighborhood in Wilmington, DE.
• Trolley Square. Neighborhood in Wilmington, DE.
• Pike Creek. Suburb in Delaware.
• Hockessin. Suburb in Delaware.
• Highland. Neighborhood in Wilmington, DE.
• North Star. Suburb in Delaware.

The 20 Worst Places to Live in Delaware

• Newark. Newark is a city in New Castle County in Delaware that has a population of more than 33,000 people.
• Elsmere. Elsmere is a suburb of Philadelphia in the Delaware Valley that has a population of 6,049.
• Smyrna.
• Camden.
• New Castle.
• Bridgeville.
• Georgetown.
• Harrington.

Delaware is a better state to retire compared to Maryland. Delaware is more tax-friendly, less heavily populated, and surrounded by peaceful retreats (including 28-mile coverage of beaches along the coast). That’s not to say that Maryland doesn’t have benefits, because it certainly does.

Things to Consider Before Moving to DE. Top Places to Live in this Mid-Atlantic State….Tax Rates

• Property Tax: 0.56%. The effective real-estate tax rate is 6th lowest in the US.
• Sales Tax: The state of Delaware does not currently collect sales tax.
• Income Tax: 2.2–6.6%. The state has a graduated income tax rate.