Guide
Do you need a Delaware C corp? A test for non-US founders
Updated
Delaware is the default in a very specific situation, and a costly reflex outside it. The distinction is whether American investors or American operations are already real.
What Delaware actually costs
- Incorporation
- A state filing fee from $109, varying with authorised stock, per the Division of Corporations fee schedule revised 1 August 2026. Same-day and 24-hour services carry additional fees, and one-hour and two-hour priority services are priced separately.
- Annual report
- $50 for a non-exempt domestic corporation, $25 if exempt.
- Franchise tax
- Minimum $175 using the authorised shares method, or a $400 minimum under the assumed par value capital method, with a $200,000 maximum for both. Due on or before 1 March each year; missing it means a $200 penalty plus 1.5% interest per month on tax and penalty.
- Registered agent
- A commercial cost, not a state fee, and one you will pay every year for as long as the entity exists.
Figures from the Division of Corporations fee schedule and its annual report and franchise tax page, read 15 August 2026. Federal and state income tax are separate questions for the IRS and your adviser, and nothing here is tax advice.
The test
- Are US investors already at the table? A term sheet or a named fund is a reason. An intention to raise in the US in two years is not yet one.
- Are there US operations? Employees, an office, inventory, a US bank account customers insist on. These create obligations of their own, regardless of incorporation.
- Do US customers require a US supplier? Some enterprise and public sector buyers do. Most do not, and will happily contract with a foreign company.
- If none of the above, price the flip instead. Ask an adviser what it would cost to insert a US holding company later, for your cap table, today and after your next round. That number, not the incorporation fee, is the real decision.
What a flip involves
A flip exchanges the shares in your existing company for shares in a new US parent, so the old company becomes a subsidiary. Every shareholder and option holder is party to it, and each of them has a tax position in their own country. It is administratively straightforward and legally routine, and it is materially cheaper before a complex cap table, employee options and multiple share classes exist. Founders who wait until an investor demands it usually pay more and do it under time pressure during diligence.
The whole of this page is a description of published fees and common practice. Whether a US structure is right for you, and what it costs you personally, needs advisers in both countries who have seen your full position.