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.
You can opt for Nevada domestication LLC or a business corporation process depending on the type of business you have formed in your home state. The popularity of domesticating is largely due to the fact that it offers several benefits like the ability to keep and maintain the same company structure as well as keeping the same tax ID (EIN). If you have a corporation in your domicile state then through the Nevada domestication corporation process, you will be able to not only maintain the same corporation in a new state but also keep your existing business bank account and line of credit.
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
If you move your business to Nevada then there are several other benefits that you can enjoy. Some of the benefits are:
- 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.