There’s a reason many Fortune 500 companies are incorporated in Nevada. Conditions in the state are ripe for doing business and incorporating your company here can give you considerable benefits over staying in your home state. Nevada prides itself on being the best state in the country to do business in, and incorporating your company in the state can offer you considerable benefits for a relatively small outlay.
1. Nevada has multiple tax advantages compared to your home state
Nevada’s taxation system was formulated with business in mind. Say goodbye to corporation and income tax, taxes on corporate shares, inheritance tax, gift tax, unitary tax and franchise tax – Nevada has none of these. With such an impressive business-friendly system it’s easy to see how you could make savings over staying in your home state. Nevada is also home to competitive sales tax and property tax rates, making the conditions ripe for your business to prosper.
With fewer taxes it also makes it easier to administer your company accounts, so you’ll make considerable savings on your accountancy fees. The only additional cost your company will need to pay in order to reap these benefits is an annual $200 Business License Fee, which is payable to the secretary of state’s office upon incorporation of your company and each subsequent anniversary thereafter.
2. Less red tape and fewer restrictions
Nevada prides itself on keeping red tape and restrictions on your business to an absolute minimum. For example, if you’re incorporated in your home state, your state law may require you to hold any director and shareholder meetings in that state. This isn’t the case in Nevada, and you have the convenience of being able to arrange such meetings anywhere in the world. So if you want a directors’ meeting on your yacht in the South of France, no problem.
Your home state many require you to have more than one person serving as the officers and directors of your corporation. This isn’t the case in Nevada and if you want to be both CEO and CFO then you can. In Nevada you have the flexibility to structure your business in the way that works best for you, without any prohibitive restrictions getting in the way.
3. Nevada’s Business Court minimizes disruption from commercial legislation
The legal system in your home state could be costly, time consuming and disruptive to your business. In Nevada the Business Court is developed based on the popular Delaware model, and offers your company minimum exposure to the risks of commercial litigation. A comprehensive case management system is put in place early on, with an emphasis on facilitating early settlement, which minimizes your legal expenditure. The Business Court does not use a jury, unlike perhaps in your home state, and there is active participation from the judiciary in your settlement.
In an effort to minimise any disruption to the trading of your business hearings can be held quickly, and there is an extensive body of case law offering the security of predictable, uniform decision-making by the courts.
4. Benefits for your stock and shareholders
Most states place a restriction on the number of shares a corporation can issue, but you won’t find that here in Nevada; there is an unlimited ability to issue new stock. This is particularly useful if you’re considering the option of taking your company public in the future.
Corporations incorporated in Nevada also have the option of issuing new stock in exchange for capital, services or real estate. As a director you can determine the value of any such transactions and under Nevada law your decision is final.
5. Tight anonymity and privacy laws
Unlike many other states Nevada law has no requirement for the names of company shareholders to be filed with the state. This protects your privacy and keeps your name out of public records. All that’s required is an annual report listing all the assets your corporation has in the state of Nevada, and of course if everything is located in your home state this will take no time at all.
By incorporating in Nevada you can protect your anonymity; only one person needs to be named on the company’s public record and that can be anyone you like. Keeping your name out of the spotlight insulates you from appearing as a good target for litigation. In your home state you may have to declare everything in a public document, which can put you at risk from predatory individuals who are encouraged to bring litigation against you due to your considerable assets.
The extent of the advantages you’ll obtain from incorporating in Nevada will depend on the size and scope of your company. Historically large corporations have the most to gain from a move to the state, but there are also many benefits for smaller businesses, and particularly those that are wishing to trade as a public company in the future. If you’re in doubt speak to a business or financial adviser; they will be able to assist you through the process of incorporating in Nevada, and also offer an expert opinion so as to help you decide whether this is a prudent move for your firm.