“Our company makes IP software and we’d love to get a toehold in the U.S. We know some states are better than others when it comes to incorporating south of the border, but we’re intimidated by the cost and paperwork. We’d love to hear from CEOs who have made the move and can help us decide where to plant the flag.”
Delaware is by far the most attractive state to incorporate a company. The state does not require you to physically set up shop, providing you have a permanent address (mail box, in which you can forward your mail to another location … even Canada). We incorporated in Delaware several years ago simply because the state has the most attractive corporate tax incentives of all states. I suggest you acquire the services of an attorney in that state and have them file all the necessary paperwork (including your virtual address if required). The beauty is that Wilmington, DE is only a twenty minute drive from the Philadelphia airport which is very convenient for cross-border travel. Check out the list of incorporated companies in Delaware and you will be surprised to see the company you would keep. Good luck on your venture south!
Jay Zawadzki, CA+S
Perhaps one of the best kept secrets in U.S. state incorporation practice is Nevada. A state well geared toward business, it has some of the most favorable laws regarding incorporation, liability, and asset protection. Nevada Corporate Planners (NVINC.com) may be the best service for assistance in the field.
Otherwise, the venerable Delaware still stands head and shoulders above many states for many of the same reasons. Taxation, business law (including the Chancery), asset protection, etcetera. Several small services set up to help with this, not the least of which is the aptly named Company Corporation (Corporate.com).
Delaware is the best state to incorporate your US business in, and Nevada is the best state in which to establish a pro forma Nexus (they have no corporate income tax!)
In response to the question regarding top US cities to incorporate: I am a CA and CPA originally from Montreal and currently living in Boston, Massachusetts. I have done considerable research on the subject. My general feeling is that New Hampshire is one of the best places for a Montreal-based company to set up shop due to its low tax stucture and proximity to Boston’s technology base.
For information about specific cities, you could look at INC magazine’s published list of the top 25 cities in the U.S. to do business in, in its March issue.
Most states do not require lengthy incorporation processes or excessive costs and I would recommend looking at the tax treatment of management fees between US and Canadian parent companies for corporate structure. Hope this information was useful, please feel free to contact me via e-mail for further information.
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