Tesla’s decision to relocate to Reno, Nevada, back in 2014 sparked a national debate, which led to companies relocating to the desert state from their home state. But why? What did Elon Musk discover about Nevada that made him think such a big, expensive move was worth it? What did other companies like Apple and Microsoft learn that inspired them to make the same move?
This post will examine why startups are transferring to Nevada and what you need to know before moving.
Five Reasons Why Companies Are Moving to Nevada
Moving Tesla from California to Nevada was not an impulse move for Musk. In reality, it’s more calculated than most people think. There are five reasons why companies are moving to Nevada.
Unrivaled Tax Breaks
Nevada is a unique state, earning significant tax revenue from its casinos. But instead of pocketing this extra money, Nevada passes these tax savings to individuals and businesses.
As a result, the state was able to remove major tax types, including the following:
Corporate income tax
Personal income tax
These tax breaks could mean a lot to entrepreneurs needing help raising funds. They can use the money they save and reinvest it in their company.
In many states, annual business filings require the inclusion of significant financial information about both the business and its principals. Nevada, however, takes privacy very seriously and requires only minimal filing requirements. They don’t require companies to have a formal information-sharing agreement with the IRS.
The fact that the State of Nevada collects such limited information at the time of filing means there’s little to share about you or your Nevada business with anyone, including anyone trying to claim against you.
Unprecedented lawsuit and asset protection
Unlike other states, Nevada doesn’t believe that the individuals controlling businesses should be in danger of losing their personal assets because of business matters. Nevada also doesn’t believe that businesses should be responsible for the personal liabilities of their controllers.
Because of this strong “pro-business” stance, Nevada’s courts have taken firm measures to prevent lawsuits against a Nevada business from personally affecting its representatives.
No Residency Required
You can use and maintain a Nevada business even if you’re not a resident of Nevada. Matter of fact, you can establish one without ever visiting Nevada.
Form your business by mail, fax, or phone, and you, as the business owner, never have to visit the state or conduct annual meetings. If, however, you want the tax benefits that come from forming your business in Nevada, you’ll need to set up business operations in Nevada. This is where having a Registered Agent comes in handy.
No Minimum Capital Required
Many states require an LLC or corporation to have at least $1,000 in the capital. But you can organize a Nevada startup with little capital if desired.
Things to Keep in Mind When Moving to Nevada
Before you think about transferring your company to the desert state, there are a few things you need to consider. For instance, your options on how to move your LLC to Nevada.
You can either dissolve your current LLC and create a new one in Nevada or register as a foreign LLC. Certain states allow the domestication of LLCs, one of the easiest ways to transfer to Nevada. But you can choose between the two options we’ve mentioned if they don’t.
Suppose you want to demolish your current LLC and create a new one in Nevada. In that case, you’ll have to pay certain taxes for the transfer and create a new employer identification number.
However, suppose you decide to register as a foreign LLC in Nevada. In that case, you need to file an Application for Registration of a Foreign Limited Liability Company to the Secretary of the state.
Typically, the filing fee for foreign LLCs is around $425. This includes the documents you typically need to start an LLC, like a business license and your initial list of managers.
Foreign LLCs are perfect if you want to operate in your home state. But it’s worth noting that doing so means you’ll have to file two annual reports in your home and Nevada.
These facts about Nevada made it the ideal choice for big companies like Tesla, Microsoft, and Apple. These advantages in Nevada can also give your business the support and edge it needs to thrive.
If you’re ready to turn your dream business into a reality, look no further than Nevada Corporate Headquarters. Our comprehensive asset protection strategies are second to none. From business entity formation to accounting and taxes, building business credit, and estate planning, they are proven to help businesses successfully launch and grow.
Contact us today and go from business idea to open for business.