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Three Reasons Why Businesses Are Relocating to Nevada

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For years, Delaware has been hailed as the incorporation capital of the world. Businesses of all shapes and sizes flock to the First State for its business-friendly legal framework and favorable tax climate.

February 27, 2024
Author: NCH

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However, times have changed. More and more businesses are leaving Delaware and relocating to other, more business-friendly states like Nevada. 

One prime example of this is TESLA CEO Elon Musk. Last month, Musk decided to move his social media platform X, formerly known as Twitter, to the Silver State. His bold decision to move X to Nevada got other business owners thinking: what does Nevada have that Delaware doesn’t?

In this blog, we’ll discuss why more and more businesses are moving to Nevada. We’ll also explore the benefits of incorporating in the said state. 

Join us as we uncover the appeal behind starting a business in the Silver State.

Three Reasons Why Businesses Are Relocating to Nevada

There are three main reasons why more and more businesses are moving to Nevada. These are as follows:

Strong Liability Protections

Liability protection is one of the primary reasons why hundreds of businesses choose Nevada as their legal home. 

The state is known for having the strongest personal liability protections in the country. Its policies strictly adhere to the “corporate veil,” which refers to the limited liability that corporate shareholders and directors have.

According to Nevada laws, the corporate veil will only be pierced in cases with evidence of fraud and other similar types of criminal activity. For example, if a company incurs debt, creditors cannot go after the personal assets of its owners or shareholders. 

They can only pursue the company’s assets unless they prove that there was fraudulent activity on the owner’s part. This policy provides entrepreneurs and investors with a significant level of security. They can build and grow their business in Nevada without the risk of lawsuits. 

Anonymity

Nevada is one of the few states that have comprehensive privacy laws for business owners. The state allows you to incorporate your business without disclosing your personal information to the general public or the IRS. 

But what about Nevada corporations? Although corporations are generally required to disclose the names of their directors and officers, the state allows corporations to have nominee directors and officers. 

Nominees assume the actual role of the actual owner of the company on paper. They’re allowed to have some signatory authority on the corporation. However, they have no control over its operations or funds. 

Moreover, Nevada corporations can use bearer stock certificates. Bearer stock certificates are tools that offer you an added layer of privacy. It’s a unique form of ownership documentation that stipulates whoever physically holds the certificate is considered the owner of the shares it represents. 

This feature makes it difficult to prove the ownership of a corporation, allowing owners like you to stay anonymous

Favorable Tax Climate

Nevada has no individual or corporate income taxes. Instead, they have a Gross Receipts Tax (GRT) imposed on businesses with revenues of over $4,000,000. 

The rate for Nevada’s GRT depends on what business category a company falls under. But typically, it ranges from 0.05% to 0.3%, which is relatively low compared to other states.

Aside from this, there are other tax types that Nevada doesn’t have, such as:

  • Inventory tax
  • Franchise tax
  • Estate tax
  • Corporate share tax

This favorable tax climate allows businesses to reduce their tax burdens effectively and encourages them to invest in innovation. 

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These three factors combined make Nevada an appealing choice for businesses that need stability, privacy, and tax savings. 

Benefits of Incorporating in Nevada

Besides these advantages, there are other benefits to incorporating in the Silver State, like:

Easy Incorporation

Nevada’s incorporation process is relatively simple. All you have to do is submit your formation documents to the Secretary of the State via mail or through their business portal, Silverflume. 

Moreover, the filing fees for incorporation in Nevada are relatively low. If you want to start a corporation, you have to pay $150 for your annual list. Meanwhile, LLCs must pay $425 to file their Articles of Organization. 

No Residency Required

There are no residency rules when it comes to foreign corporations. You can incorporate your business in Nevada even if you live in another state or overseas. 

Pro-business Programs

To promote entrepreneurship in the state, the Nevada Government’s Office of Economic Development has developed several programs to support and incentivize aspiring young entrepreneurs. 

One example of this is the Emerging Small Business (ESB) Program, designed to encourage the development and growth of small businesses in the Silver State. The ESB Program is designed to help small businesses find work with state and local government agencies. 

Nevada also has a Business Opportunity Fund and a Small Business Development Center. These two resources offer training and financial aid to new ventures, which they can use to grow and expand their operations. 

It’s also worth noting that Nevada has a venture capital program called Battle Born Venture, funded by the State Small Business Credit Initiative (SSBCI). 

Through this program, high-potential startups in Nevada can gain access to loans and growth accelerator programs. It was primarily created to help local entrepreneurs get the funding to scale their businesses. 

Discover The Nevada Edge Today

Although Delaware is still the incorporation capital of the world, there’s no denying that Nevada has become a compelling alternative for those who want stronger liability protections. 

With a favorable tax climate and programs that promote growth and development, the state has attracted several businesses looking for a more pro-business environment. 

If you need help reincorporating or starting your own business in Nevada, NCH is here to assist you. 

NCH is one of Nevada’s leading business formation service providers. Our business specialists will guide you through the incorporation process, from completing your formation documents to finding the perfect registered agent for your business. 

We aim to provide exceptional service and support to our clients. That’s why we’ve made it our mission to help you kickstart your business on the right foot. 

Discover the Nevada edge today. To learn more about our incorporation services, visit our website here or call us at 1-800-508-1729 to schedule a consultation.

Disclaimer: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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