Unlike Australia, where company registration is handled federally through ASIC, US business entities are formed at the state level. Each state has its own formation rules, fees, taxes, and reporting requirements. Choosing the right state is one of the most important decisions you will make.
Delaware — the default choice for Australian businesses
Delaware is the most popular state for business formation in the United States — over 60% of Fortune 500 companies are incorporated there. For most Australian businesses setting up a US subsidiary, Delaware should be the default choice. Its advantages include:
- A specialised business court (the Court of Chancery) with extensive case law providing legal certainty
- No state corporate income tax in most cases for out-of-state operations
- Fast formation processing
- Annual franchise tax of just US$225/year for C-Corp subsidiaries
- The preferred jurisdiction for US venture capital and institutional investors
Other states
You should only consider forming in a state other than Delaware if all your staff, offices, and business operations are in one specific state. If your business will have physical operations, employees, or a warehouse in a specific state, you may need to register there as a foreign entity anyway. California, Texas, Florida, and New York are common choices based on where business activity actually occurs. Keep in mind that some states (like California) impose additional annual taxes regardless of revenue — California charges a minimum US$800/year franchise tax for all LLCs.
We help you evaluate the best state for your specific situation during your initial consultation. The right choice depends on your business model, revenue expectations, investor requirements, and where your US customers are located.