Introduction to Nevada Domestication

Nevada Domestication

When businesses grow their past strategies and methods may not fit their present needs or future goals. This is when a business has to make an informed decision. Some businesses choose to expand or shift the business to another state and such a decision can often be motivated by several reasons right from tax benefits to state infrastructure. There are different ways to change the state of business formation like dissolving existing business and forming a new one or opting to form a foreign entity. There is a third option and it is known as domestication. One of the popular moves is Nevada domestication as the state provides tax shelter and a favorable business environment.

What is Nevada domestication?

Most business owners have the notion that in order to move a business to Nevada they will have to either dissolve their existing business or opt for foreign qualification but there is a more attractive and better alternative – domestication. Domestication is basically a process that involves the “transfer” of an existing business entity from its domicile state to a new state or jurisdiction. If you are planning to relocate your business from anywhere in the US to the state of Nevada, you will have to undergo the process of Nevada domestication.

Why move your business to Nevada?

Nevada has a strong and vibrant economy and it is home to the largest entertainment industry in the world. There are several reasons why business owners find Nevada domestication an attractive proposition. One of the top reasons why entrepreneurs prefer to move their business to Nevada is tax benefits and incentives. When it comes to business and other taxes, Nevada State does not collect:

• Individual or corporate income tax
• Franchise tax
• Inventory tax
• Estate tax
• Unitary Tax
• A Minimal Employer Payroll Tax of just 0.63 percent

• Nevada has close proximity to California and the West Coast markets and this leads to reduced storage or shipping cost
• The state offers highly competitive utility rates especially for commercial businesses
• Nevada does not require businesses to share their list of company-held assets, which will be highly beneficial for a Nevada domestication LLC or corporation
• The state has a Catalyst Fund, which has been created solely to fund businesses relocating or domesticating to Nevada
• Nevada State has several incentive programs for small businesses including the Silver State Works program. Post Nevada domestication, you can earn almost $2,000 for every state-qualified employee that you employ.

Domestication vs. Foreign Registration

If you are planning to expand or relocate your business to another state you can either choose Nevada domestication or opt for a foreign registration. Some entrepreneurs prefer foreign registration while some business owners want to simply relocate or move their business to Nevada. What would be your choice? In order to understand which will work better for you, it is important to identify the difference between registering your business as a foreign entity and moving your business to Nevada.

What is the difference between domestication and foreign registration?

If you already have an existing business and you are looking at Nevada as a prospective state for expanding or operating this business, there are two options. You can opt for foreign registration or choose Nevada domestication but there are certain important aspects to consider as they will help you make an informed decision. So, let us look at the difference between domestication and foreign registration.

• Basic business difference: If you are planning to move your business to Nevada from any other state then it is considered to be domestication. If you are planning to expand your business in Nevada and also operate in the domicile state then you will require foreign registration.
• Formation process: If you have opted for Nevada domestication then you will have to file the “Articles of Domestication” along with the filing fee. It is important to note that when you opt for domestication, you can form an LLC in Nevada as well as business corporations. If you want to register as a foreign company then your business will go through a foreign qualification process and you will be required to provide a certificate of good standing from the domicile state.
• Filing Requirements: When you form a Nevada domestication LLC or corporation, you will be the owner of a single business and hence you will have to file for a state business license, taxes, and initial reports for the domesticated business. If you form a foreign business then you will have to fulfill the requirements for each state – the domicile state and the foreign state.

Moving Business to Nevada

If you are thinking of moving your business to Nevada then it is important to understand how the Nevada domestication process works and what documents or filings are required from your end. The Nevada Domestication Corporation and LLC processes are quite similar. Let’s look at the process of each type of business.

How to move your LLC to Nevada?

If you already have formed a limited-liability company in another state and are planning to move your business to Nevada then domesticating your LLC in the state is one of the best options. It is fairly easy to relocate your business in Nevada although you will have to check in advance if your state allows Nevada domestication of LLC e.g., Arizona and Texas allow businesses to domesticate to Nevada but New York and North Carolina don’t. The process of domestication of a limited-liability company is as follows:

• Your limited liability company needs to be authorized for Nevada domestication. Check with the Secretary of State of the domicile state to ascertain if this is possible.
• If it is allowed then the first step to move your business to Nevada is to obtain a certificate of good standing from your home state
• Your business will be considered a foreign entity and you need to file Articles of Domestication with Nevada Secretary of State pursuant to NRS 92A.270 for Nevada domestication of LLC.
• Hire a reputable registered agent in Nevada for service of process as it is mandatory in the state
• You will have to apply for a business license in Nevada and also change state of operation with the IRS
• You need to dissolve your existing LLC in the home state as a part of the Nevada domestication of LLC process

We can help you to move your LLC to Nevada!

How to move your Corporation to Nevada?

Nevada is one of the several states that allow domestication of a foreign entity. If you have incorporated in any state and want to proceed with Nevada domestication of corporation then there is a process for the same. Domestication will require state approval and the process is easier than conversion or foreign qualification. It is important to ensure that the board of directors as well as shareholders of the said corporation has approved Nevada domestication. The process of domestication of a business corporation is as follows:

• Your business corporation needs to be authorized for Nevada domestication. You need to check with the Secretary of State of the domicile state to ascertain if this is possible.
• If Nevada domestication of corporations is allowed then the first step is to obtain a certificate of good standing from your home state. You will also be required to submit the charter documents of the existing corporation
• The next step in the Nevada domestication of corporation process is to file Articles of Domestication with Nevada Secretary of State pursuant to NRS 92A.270. You will have to dissolve the corporation in the domicile state to proceed with Nevada domestication.
• It is mandatory in Nevada to hire and maintain a reputable registered agent for service of process
• You will have to apply for business license in Nevada and also provide IRS with the new state incorporation information for tax purposes

We can help you to move your LLC to Nevada!

Ready to move your Business to Nevada

Nevada has a strong economy and offers domestic or foreign business owners a favorable tax climate. The state also offers affordable commercial properties so that when entrepreneurs move their businesses to Nevada they can benefit from low startups costs. If you are thinking of Nevada domestication of LLC or a corporation then IncParadise can provide meaningful assistance.