Introduction
Delaware is a state located on the Atlantic Coast in the Mid-Atlantic region of the United States. Delaware is located in the eastern section of the Delmarva Peninsula, between Delaware Bay and Chesapeake Bay, and is the second smallest state (after Rhode Island). 2007 estimates place the population of Delaware ranking 45th in the nation, but 6th in population density, with more than 60% of the population in New Castle County. Delaware is divided into three counties: New Castle, Kent, and Sussex. While the southern two counties have historically been predominantly agricultural, the northernmost county has helped lead the state to rank 2nd in civilian scientists and engineers as a percentage of the workforce and number of patents issued to companies or individuals per 1,000 workers. The history of the state’s economic and industrial development is closely tied to the impact of the Du Pont family, founder of E. I. du Pont de Nemours and Company, one of the world’s largest chemical companies.
The total area is 6,452sq km and in 2008 the population was an estimated 873,092. Predominantly English speaking; Spanish, French, Chinese and German are also among the other spoken languages I Delaware.
Economic and Business Environment
The chief industries of the state are Chemicals, agriculture, finance, poultry, shell fish, tourism, auto assembly, food processing, and transportation equipment.
The Chief manufacturing products of the state are nylon, apparel, luggage, foods, autos, processed meats and vegetables, rail road and aircraft equipments.
The chief industries of the state are Chemicals, agriculture, finance, poultry, shell fish, tourism, auto assembly, food processing, and transportation equipment.
The major livestock’s of the state are (Jan.2004): 25,000 cattle/calves ;( Jan 2003): 18000hogs/pigs; 251.2 mil. Broilers.
Taxation
Delaware is the country’s corporate tax haven, with over half of its publicly held corporations registered there, including 58% of the Fortune 500. Corporations are attracted by Delaware’s exemption from taxation of the subsidiaries of holding companies (so the holding-company headquarters are located in Delaware and the operating subsidiaries generally elsewhere). Financial institutions are attracted by its absence of usury limits. The fees paid by hundreds of thousands companies allow it to be one of five states with no sales tax. Combined state and local taxes in 2003 amounted to 7.3% of income, the 3rd smallest percentage in the US, ahead of only New Hampshire and Alaska. In Delaware’s state tax revenues come primarily from levies on personal and corporate income, inheritance and estates, motor fuels, cigarettes, state lottery, and alcoholic beverages.
Delaware’s individual income tax is a seven-bracket progressive schedule ranging from 2.2% to 5.55% for income under $60,000 and 5.95% for income over that amount. Personal exemptions are in the form of $110 tax credits per adult and per child. There is no general sales tax, but selective sales taxes (excises) are imposed on gasoline (23 cents per gallon) and other motor fuels, cigarettes (24 cents a pack) and other tobacco products, alcoholic beverages, amusements, insurance premiums, pari-mutuels, public utilities, and other selected items. The corporate income tax is a flat tax of 8.7%. As part of their business and occupational license fees, businesses are assessed a gross receipts tax ranging from 0.096% to 1.92%, with the highest rate applied to rentals. Except for rentals, license fees also include an annual flat fee (generally $75 per business establishment) and monthly exclusions from the gross receipts tax ($1million for manufacturers and $50,000 for most services). The annual franchise tax ranges from a minimum of $35 to a maximum of $165,000, calculated either according to the number of authorized shares in the company (the minimum applying to companies with 3,000 or fewer shares) or according to the assumed par value of capital (the minimum applying to assumed par values of less than $140,000, and the maximum reached at a par value of $660 million). As is true for most states, Delaware’s estate tax is set equal to the federal exemption from the payment of the federal death tax for the payment of state death taxes (estate taxes), and is, therefore, scheduled to be phased out by 2007 in tandem with the phase-out of the federal tax credit, absent countervailing action by the state. Revenue losses from the phase-out of Delaware’s estate tax are estimated at $7.6 million in 2003, $16.3 million in 2004, and $34.7 million in 2007. Delaware has repealed its gift tax. Other taxes include various state license fees, a lodging tax, a realty transfer tax and local property taxes.
Banking
At the end of 2002, there were 37 insured banks in Delaware. Delaware was home to six of the nation’s 41 insured credit card banks in 2002, including three of the nation’s five largest. These credit card banks manage or hold one-third of total credit card loans nationally. Total assets as of September 2002 for Delaware’s 37 insured institutions were $186 billion. Banking is Delaware’s most profitable industry: 12% of jobs and 36% of the gross state product are represented by the finance insurance and real estate (FIRE) sectors. Since 2001, however, FIRE employment declined steadily (as of 2003). As of late 2002, the median past-due loan rate increased, due to an increase in multifamily and construction loan delinquency rates, weakening credit quality among the state’s insured institutions. The median net interest margin (NIM) (the difference between the lower rates offered to savers and the higher rates charged on loans) in 2002 was above the level in 2001, but as long-term interest rates reached historic lows, and short-term interest rates declined to a lesser extent, asset yields and funding costs declined.
Offshore Banking
The main attractions of Delaware as a jurisdiction in which to incorporate a limited liability corporation or LLC are that it is tax advantageous for non-US residents, it is a politically and economically stable and ‘safe’ jurisdiction and it is governed by strict codes of practice which protect the LLC members and their assets, making Delaware offshore incorporation attractive for a growing number of business owners.
Advantages of banking off shore in Delaware include:
• Computerized fast and easy registration procedure with electronic
• Certificate of Incorporation/Registration. Among other papers you will receive a certified hard “copy” of a Certificate.
• You can do any business, which is not prohibited by law or requires licensing.
• There are no restrictions on citizenship or residency of owners.
• Corporate papers are identical to those of U.S. origin.
• Data on owners is not publicly available and will remain confidential.
• There are no preset limits on duration of business. Every company however that failed to pay annual fees for three years in a row will be liquidated.
• A liquidated company might be reopened upon execution of all dues and fees.
