Delaware compliance advisory for foreign founders

I performed targeted web searches and content extraction to assemble authoritative, Delaware-specific compliance guidance for foreign (non‑US) founders forming or operating Delaware entities. Sources consulted include the Delaware Division of Corporations (formation guidance, franchise tax rules, BOI/CTA guidance), FinCEN (BOI/CTA updates and filing system), and IRS guidance (EIN procedures; Form 5472 requirements and mailing instructions; FATCA/FBAR references). Below is a concise summary of the research steps, analysis, and the key, actionable compliance points foreign founders must know for Delaware entities. Research steps taken - Performed broad web searches for “Delaware compliance advisory foreign founders” and similar queries to find authoritative state and federal sources and reputable professional advisories. - Extracted Delaware Division of Corporations pages (How to Form a New Business Entity; Corporate Transparency Act guidance; Franchise Taxes) for state-specific filing, registered agent, annual taxes/deadlines, and BOI references. - Extracted FinCEN BOI page for the latest CTA/interim final rule guidance affecting reporting companies and deadlines. - Extracted IRS guidance on obtaining an EIN and the Instructions for Form 5472 (12/2024) and Form 5472 (PDF) for foreign-owned U.S. disregarded entities (DEs) filing obligations and penalties. Key findings and practical guidance (high‑priority items for foreign founders forming/operating Delaware entities) 1) Formation & registered agent (Delaware rules) - Delaware requires every business entity to maintain a Delaware Registered Agent with a physical Delaware street address. The Division of Corporations provides forms, name reservation and filing options and recommends consulting counsel/CPA when selecting entity type. (See Delaware Division of Corporations: How to Form.) 2) Annual Delaware taxes, reports, and deadlines - Corporations incorporated in Delaware must file an Annual Report and pay franchise tax by March 1 each year. The minimum corporate franchise tax is $175 and the maximum stated on the Division site is $200,000; estimated taxpayers owing $5,000 or more must make quarterly estimated payments (40% due June 1, 20% Sept 1, 20% Dec 1, remainder March 1). Penalties: $200 for late annual report; interest at 1.5% per month on unpaid tax balances. Delaware requires electronic filing of domestic corporation Annual Reports. - Delaware LLCs, LPs and GPs do not file an annual report but must pay an annual tax of $300, due by June 1. - Notifications of Annual Report and Franchise Taxes due are sent to Delaware Registered Agents in December each year. 3) Beneficial Ownership Information (Corporate Transparency Act) — FinCEN status and Delaware guidance - FinCEN issued an interim final rule (published March 26, 2025) that revised the definition of “reporting company” under the CTA so that domestic entities created in the U.S. (previously treated as “domestic reporting companies”) are exempt from BOI reporting; the revised definition covers entities formed under the law of a foreign country that register to do business in a U.S. state (i.e., foreign-formed entities registering in the U.S.). - Under the interim rule, foreign reporting companies registered to do business in the U.S. before March 26, 2025, had a filing deadline of April 25, 2025; those registered on or after March 26, 2025 have 30 calendar days after notification their registration is effective to file. FinCEN’s BOI e‑filing system and FAQs are the filing mechanisms and guidance. - Delaware’s Division of Corporations links to FinCEN guidance and provides a list of third‑party service providers that can assist with BOI reporting. 4) Federal tax filing & information returns for foreign-owned US entities - EIN: Form an entity with the state first, then obtain an Employer Identification Number (EIN) from the IRS. An EIN is typically required to open a U.S. business bank account, hire employees, and file U.S. information returns. The IRS page on obtaining an EIN has guidance (and references to BOI when applicable). - Form 5472 & pro forma Form 1120 (critical for foreign-owned single-member US LLCs): The IRS instructions (12/2024) require a foreign-owned U.S. disregarded entity (DE) — i.e., a U.S. LLC wholly owned by a foreign person — to file Form 5472 for reportable transactions with related parties and to attach Form 5472 to a pro forma Form 1120. The foreign-owned U.S. DE has to use a dedicated mailing address (or fax) for these filings and cannot e-file Form 5472; penalties are severe: $25,000 for failure to file or maintain required records, plus an additional $25,000 if the failure continues beyond 90 days after IRS notification. - Filing mechanics & deadlines: Form 5472 is filed as an attachment to the DE’s pro forma Form 1120 by the pro forma 1120 due date (including extensions). A foreign-owned DE that needs an extension must file Form 7004 (marked “Foreign-owned U.S. DE”) to request an automatic extension, and use the IRS-designated fax or mailing address in the Form 5472 instructions. 5) Other federal obligations (high level & references) - Withholding: Payments to foreign persons (dividends, certain interest, royalties) may be subject to U.S. withholding tax (Forms 1042/1042‑S). Tax treaties can reduce withholding rates — consult a tax advisor for treaty analysis. - FBAR & FATCA: Foreign individuals and entities with U.S. exposure should consider FBAR (FinCEN Form 114) and FATCA/Form 8938 requirements where applicable (IRS FATCA guidance and comparisons of Form 8938 and FBAR are relevant). - ITIN (Form W-7): Individual foreign owners needing a U.S. TIN may apply for an ITIN using Form W‑7 when required for reporting. 6) U.S. bank account opening & KYC / practical matters - U.S. financial institutions will require KYC documentation; banks typically want: EIN, formation documents, Certificate of Good Standing, registered agent info, and valid IDs for beneficial owners and signatories. Some banks require in‑person visits; others and some fintechs offer remote onboarding for foreign-owned entities. Check bank policies and consider ordering a Certificate of Good Standing or certified copies at formation time if the bank requests them. 7) Employment & state tax considerations - If hiring employees who work in Delaware, register with Delaware’s Division of Revenue and the relevant payroll withholding systems; Delaware withholding and unemployment tax registration may be required. Nexus rules for state income and sales taxes depend on activities; consult a tax professional for nexus and gross receipts tax obligations (Delaware also imposes gross receipts tax administered separately from franchise taxes). 8) Practical recommendations for foreign founders forming Delaware entities - Obtain and maintain a Delaware Registered Agent and physical street address in Delaware (required). - File the correct entity formation documents with the Delaware Division of Corporations and order Certificates of Good Standing if needed for banking or contracting. - Obtain EIN from the IRS after state formation; obtain ITINs for individuals if necessary. - Evaluate whether the entity will be a disregarded entity or elect corporate classification; if foreign-owned DE, prepare to comply with Form 5472 / pro forma 1120 filing and recordkeeping. - Determine BOI/CTA filing obligations under FinCEN’s current rule (note: FinCEN’s March 26, 2025 interim final rule changes reporting scope and deadlines for foreign firms) and, if required, file BOI via FinCEN’s e‑filing system within applicable deadlines. - Track Delaware franchise tax and LLC tax deadlines (Corp: March 1; LLC/LP/GP tax: June 1) and pay on time to avoid penalties. - Consult specialized US counsel and an international tax CPA experienced in foreign‑owned US entities for tax treaty, withholding, payroll, FBAR/FATCA and state‑nexus issues. If you’d like, I can now use this research to draft the requested deliverables: a comprehensive blog post (SEO-optimized with your provided meta tags and slug), a newsletter draft using your template name, and a checklist/one‑pager for foreign founders summarizing filings and deadlines. Tell me which deliverable(s) to prepare first.