Reply to post: Delaware is a tax haven

Delaware is a tax haven

Not many people know this:

RE: > Uber Technologies Inc. ... is a Delaware corporation

Delaware is a tax haven which also shelters/hides companies from normal legal&financial recourse, approximately of the order of Bermuda or the British Virgin Isles ("BVI").

The legal/financial sheltering is subtle and obscure/obfuscated, but serious. For example:

* corporate bank accounts are exempt from normal creditor recourse such as attachment

* directors, executives, etc can be exempted from the normal legal requirements such as duty of care, lack of bad faith, improper personal benefit, fraud, misconduct, violation of the law, self-dealing, conflicts of interest, etc.

.

This is well-known amongst American corporate structurers, but very very few people outside that milieu are aware of it. Joe Bloggs would have his guard up on seeing a company based in a well-known tax-free legal-lite dodgy-friendly jurisdiction like Bermuda or BVI, but just naturally assumes that because Delaware is an American State it is all normal and legal and above board.

Actually, you have about the same legal traction vs a Delaware company as you do vs a Bermudan $10 shell company, despite the appearance of a normal open Western jurisdiction, and they both pay the same amount of tax, viz. 0.

(Granted, the Delaware company WILL have to pay US Federal tax on domestic US operations (offshore operations have always been tax-free historically, but not sure of the situation following Trump's cleanup), but this is only ~2/3 of the withholding tax payable if attempting to repatriate those US earnings to a Bermudan/BVI parent company. So it's still a substantial discount on the next-best structure for a US-heavy company.)

Delaware corporate-homing is a triumph for PR/public image/optics. All the benefits of Bermuda/BVI and none of the corporate-image backlash.