How Do You Incorporate a Business Outside of Your Home State?

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 15, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

If you choose to incorporate outside of your home state, you will have to qualify as a foreign corporation in your own home state. For example, you form your corporation in Delaware, Wyoming or Nevada (these are the most popular states for incorporation) even though you are actually physically present and operating in a different state. This means your business will be considered a foreign corporation in your home state. (The use of “foreign” is not to be confused with non-based U.S. corporations.)

The Mechanics of Incorporating

When deciding on a location to incorporate, you must first ask yourself where you will be conducting all or the majority of your business. Also consider the benefits provided by the state including ownership, privacy, tax benefits, and publicly traded growth potential. The first step to incorporating is to form a corporation or LLC. Once you have decided, you will need to file in the court with jurisdiction in the state in which you choose to incorporate. In Delaware, for example, all corporate matters are handled in the Court of Chancery.

Some states require that you file fictitious name, or DBA (“doing business as”), papers. In simple terms, DBA is your official business name. You will also have to file tax forms for that state and comply with certain formalities of the corporate laws for that state. To ensure all of these steps are taken, some states require you to obtain a registered agent in the state to oversee this process on your behalf.

Taxes and Fees for Foreign Corporations

In most cases, registering as a foreign corporation or limited liability company (LLC) will subject you to all of the same taxes and fees as an in-state company. It is important to balance the tax and corporate protection benefits of incorporating in one state with the costs of registering as a foreign corporation in your home state. Additionally, if you plan on setting up offices or engaging in business in more than one state, we recommend you consult with an attorney who is familiar with the foreign corporation rules.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption