Delaware: The First State

Rivers and forests shape Delaware's landscape, in contrast to the headquarters of global players that define its economy. This East Coast state is home to just over a million people (as of 2024), which puts it in 45th place nationally by population. Delaware has only three counties, the fewest of any state, and at just under 6,500 km² it is the second-smallest state in the country.

If you set up your company in Delaware, you're in the best of company: Fortune 500 corporations, startups and family businesses. A competitive business climate, a great location with reliable infrastructure and a highly skilled workforce make Delaware one of the best states for your investment.

The “First State” is home to more than a million companies and the birthplace of world-class businesses such as Coca-Cola, Bank of America and AT&T.

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1Top address in the Mid-Atlantic region

U.S. News & World Report credits Delaware with an efficient business climate, ranking it sixth. According to Forbes, Delaware has the second-lowest business costs in the USA, 25 percent below the national average. That is all the more remarkable because the Northeast is generally seen as a high-cost region.

These are surely among the reasons why companies like FMC Corporation and JP Morgan Chase operate out of Delaware. They also benefit from very favorable tax conditions: alongside a corporate income tax of 8.7%, there is no sales tax and no VAT, although Delaware does levy a gross receipts tax on business revenue. Tax liabilities are reduced if a company has a significant payroll or property in Delaware, and local investment is rewarded.

The “First State” offers an economic environment you won't find anywhere else in the Mid-Atlantic region. It's an outstanding place to start a company and position it strategically.

2Number 1 in the nation for patents per capita

In the "First State", a collaborative spirit meets interdisciplinary strength, and together they drive a wealth of innovation. Plenty of high-performing incubators and co-working spaces amplify the effect. The track record includes some big names in today's business world, among them DuPont, Gore and Incyte.

Startups in Delaware benefit from a diverse workforce and an ideal location at the center of more than 100 top universities. A business-friendly legal and regulatory climate is just one of the many advantages that make innovation easier in Delaware. The “First State” ranked eighth both in the “U.S. State Innovation Index” (Bloomberg, 2020) and in the “Most Innovative State” rating (WalletHub, 2021).

3An exceptional talent pool

Delaware has the highest concentration of chemists, chemical engineers and chemical technicians in the country, and you'll find top talent in every other field too. In science, engineering and health, Delaware has the fourth-highest concentration of PhDs. All in all, it has one of the best talent pools in the nation.

Besides the universities already mentioned, a high concentration of research labs and research-intensive companies keeps standards high, not only for the talent but for employers as well.

4Major investment in the Port of Wilmington

The Port of Wilmington is a strategically located deepwater port at the confluence of the Christina and Delaware rivers, just 100 kilometers from the Atlantic Ocean. It serves more than 200 million North American consumers and is North America's leading fresh fruit port, with the largest dockside cold storage complex on the continent.

In 2018, the Emirati port operator Gulftainer signed a 50-year lease with the State of Delaware. Over that period, Gulftainer will invest 600 million dollars and increase the port's capacity fivefold, establishing it as the largest logistics facility on the Delaware River.

5Income tax in Delaware

Delaware levies an income tax of 2.2 to 6.6%, depending on income. On top of that, you pay federal income tax.

6Corporate income tax in Delaware

Delaware levies a corporate income tax of 8.7%. On top of that, you pay federal corporate income tax.

7Sales tax in Delaware

The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).

7.1Sales tax rate in Delaware

Delaware has no sales tax.

You'll find more state profiles in our overview of all US states. Which state is right for your company is covered in the guide Which US state is best for your company? Everything about forming a company in the First State is on our Delaware page. And our sister site zerotax.llc shows you how to run a US LLC with no US permanent establishment completely tax-free.

8Our services for Delaware:

Delaware is one of the six states where we form companies for you. You'll find entity types, services and fees under Company formation in Delaware, and whether Delaware suits your plans is something we can work out together in a consultation.

In short

• At just under 6,500 km², Delaware is the second-smallest state and home to just over a million people.
• Companies value its business climate, its Mid-Atlantic location and its talent pool, especially in chemistry.
• Delaware levies a 8.7 percent corporate income tax and a gross receipts tax, but no sales tax.
• Income tax ranges from 2.2 to 6.6 percent, plus federal income tax.

How we help you

• US Company FormationLLC, Inc or LP in Delaware, Florida, California, New York, Texas or Wyoming.
• Delaware holdingThe holding above your US companies, with one consolidated tax return.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• Form an LLCThe US LLC with a permanent establishment, turnkey in six states.
• Company formation consultationEntity type, state and tax consequences, before you commit.