If you do business in the U.S., why not incorporate there? You’ll enjoy Made-in-America status, potential tax breaks and extra protection for your Canadian business should you be sued in the States. PROFIT surveyed the costs and advantages of three popular locales for foreign incorporations.
Delaware
Cost: One-time fee of US$89, plus annual reporting and franchise fees of US$65.
Advantages: No state tax, provided you do no business in Delaware; anonymity of directors, officers and shareholders, who are not listed in the articles of incorporation; and a pro-business judiciary.
Nevada
Cost: Initial fees totaling US$610, including a correspondent fee ($30), which is paid to someone who carries your application into the state (you can’t incorporate by mail). The annual reporting fee is US$85.
Advantages: Nevada charges no corporate tax, won’t share your financial information with federal tax authorities and protects the anonymity of shareholders.
Wyoming
Cost: Initial state fee of US$130, plus annual fees based on the value of your physical assets in Wyoming. The rate works out to about $2 on every $10,000 in assets.
Advantages: No corporate tax, and you can assign your Canadian incorporation date to your new Wyoming corporation, making it look more established.
While Do-it-yourself incorporation will save you lots of hassles, it won’t save you a ton of money: Web-based services do the job for less than US$200, while big law firms charge around US$1,000. The fees include one year of service from a registered agent, who resides in the state of incorporation and accepts legal documents on your behalf. Additional years cost around US$150, with bulk discounts available. After all, people buy big in America.
© 2003 Deena Waisberg
