NEVADA A BUSINESS FRIENDLY STATE IN THE USA
The primary driving force behind the rise in the number of small businesses in Nevada registration is its “business-friendly state” tag. Surely, Nevada offers a host of benefits to small businesses and medium sized enterprises (SME’s) but the low-regulation environment and streamlined new business documentation approval process lays the foundation for the pro-business environment.
Introduction – About Nevada
The state of Nevada enjoys a strong economy and is home to 254,337 small businesses. The Real Gross Domestic Product (GDP) of the state was $146.22 billion in 2018 and the economy grew at an annual rate of 3.3%. The city of Las Vegas is one of the most popular business locations in the state and is home to 55,856 companies. Why start a business in Nevada? There are several reasons why Nevada is a favorite among entrepreneurs and start-ups and this includes the various advantages the state offers.
Advantages of Incorporation in Nevada
The first question you would probably be faced with is – why start a business in Nevada? Nevada, like any other state in the U.S has its own advantages and disadvantages but there are several benefits that support overall business growth. Let’s look at some of the advantages:
Nevada Tax Benefits
State and Federal Taxes are applicable to startup Nevada businesses as well as existing businesses. What makes the state of Nevada different is the variety of tax benefits that new and existing businesses can derive. The benefits can be classified as under:
- Pro-Business Tax Structure: The state of Nevada has been attracting new businesses and one of the catalysts is the pro-business tax structure. It has experimented with different business policies to ensure entrepreneurs and start-ups face minimal hiccups in forming and conducting their business. It is almost a “No tax” state and a start-up Nevada business can benefit from the following:
- No Personal Income Tax
- No Corporate Income Tax
- No Inventory Tax
- No Estate Tax or Gift Tax
- No Unitary tax
- No Franchise Tax
- No Special Intangiable Tax
- No Inheritance Tax
- Tax Abatement Programs: If you have a “why start a business in Nevada” list then the tax abatement programs offered by the Nevada Governor’s Office of Economic Development (GOED) should be on the list. Tax abatements are applicable on different aspects and expenses of a business like capital equipment purchases and real or personal property. Tax abatement programs help you bring down the overall operating costs of your business leading to savings. Some of the top programs include:
Privacy and Anonymity
One of the finer aspects of the why start a business in Nevada list is the amount of privacy and anonymity that a start-up can enjoy. The best way to enjoy privacy is by hiring a reliable Nevada registered agent as they will ensure the business is able to avoid embarrassing situations especially in front of their clients. This is possible as an agent will receive any notices from the office of the Secretary of State as well as meet any state department officials like sheriffs on your behalf. As a result, a business in Nevada will also be able to maintain anonymity. Thus it is one of the greatest benefits of the privacy protection as it helps towards protecting business owners from creditors and litigation.
Whether you form an LLC or a business corporation, the state of Nevada ensures privacy to all shareholders, corporate officers, directors, vice-presidents, managers, and members among others. As a result, identities of primary members or directors of a Nevada business remain undisclosed.
Limited Liability and Statutory Protection
Why start a business in Nevada? There are several benefits and the pro-business law of Nevada makes it easier for businesses to form and operate in the state. A highly attractive state for new businesses, the state provides excellent limited liability protection and asset protection options to business owners.
A private corporation in Nevada can benefit from NRS 78.225 on stockholders liability. According to the statute, there is no individual liability applicable for a Nevada business except for payment for which the shares in question were authorized for issue or as specified in the subscription agreement.
Further, Nevada Statutes NRS 78.747 states that a director, stockholder, or officer of a business corporation will not be individually liable for any liability or debt of the said corporation unless such an officer or director is the alter-ego of the Nevada business entity.
One of the salient aspects of forming an LLC business in Nevada is that the business entity will not be liable for any personal debts of the members. Hence, any property or bank accounts of the limited-liability company cannot be taken by creditors thus providing the LLC with protection.
No IRS Information Sharing
The Internal Revenue Service (IRS) is a federal agency and it has an Information Sharing Agreement (ISA) with almost 33 states but Nevada is definitely not one of them. This is one of the salient aspects of the why start a business in Nevada list and benefits. It is important to understand though that the sole purpose of the Information Sharing Agreement (ISA) is to fight abusive tax avoidance.
Nevada, unlike other states has no information sharing agreement with the IRS and hence corporate or personal financial records are not provided to IRS. This is more so because Nevada does not have any corporate or personal income tax. This definitely provides anonymity and privacy to any Nevada business.
One of the advantages that a Nevada business corporation has over other forms of businesses is the stock flexibility. This refers to the fact that corporate obligations towards real estate or services can be easily handled through the issuance of stock and the value of such stock can be determined by the director.
When you think about starting a business in Nevada; stock flexibility is definitely a reason to consider. In fact, a Nevada Corporation can issue a variety of stocks with different values and these stocks can be sold or exchanged for real estate, goods, cash etc. The information pertaining to the stocks have to be mentioned in the articles of incorporation.
There is another aspect that is beneficial to a Nevada business and that is the existence of stocks or shares in the form of “bearer shares”. Such a share provides direct ownership of the said stock by any individual currently holding the shares. This is quite beneficial in emergency situations like hostile litigants wherein it eases the temporary transition in ownership.
One of the highlights of bearer shares is that it provides privacy as well as asset protection.
Fast and Super Easy Incorporation Process – How IncParadise helps
If you have decided to register a Nevada business corporation then IncParadise makes the registration an easy process. In the state of Nevada, a business corporation can be formed by one or more persons and it is legally recognized under the 2010 Nevada Code-Chapter 78 Private Corporations.
IncParadise has been assisting several start-ups with the formation of Nevada Business Corporation. As one of the most reliable agents in the state, we provide an easy and transparent process. We can help you form a corporation by providing the following services:
- Assist with the process of business name reservation
- Assist with the filing of the articles of incorporation
- Provide online assistance regarding any information pertaining to formation of a Nevada Business Corporation
- Assist with the application process for a Nevada certificate of good standing for an additional fee
- We can file the Nevada Initial List and apply for a Business License on your behalf
- We can help you obtain an EIN (Tax ID) from IRS on your behalf at an additional fee
- We will provide you with file stamped copy of Articles
- We also provide company bylaws and ready to fill Stock Certificates
Apart from the standard incorporation services, you can benefit from our Nevada mail forwarding and other additional services accessible through a secure online account.
Enjoy Tax Advantages in Nevada for your Business!
Cost of Doing Business in Nevada
The state of Nevada is considered as one of the most competitive markets for new businesses. If you want to know why you should start a business in Nevada then the answer lies in one of the factors that make this state so attractive. That factor is low overall cost of setting up a business. Apart from the zero inventory tax, Nevada boasts of a strong transportation infrastructure and a favorable geographic location.
The Nevada laws are pro-business and it is fairly easy to set up a Nevada business. Some of the factors contributing to the low overall cost of doing business include:
- Low licensing fee, annual fee, startup fee, and regulatory fee
- The state has an abundance of highly economical commercial and industrial real estates
- The utility rates for business or commercial operations are highly competitive and there are several incentive programs that provide rebates for electric utility customers like the Solar Energy Systems Incentive Program (SESIP).
- A Nevada business will benefit from lower shipping and storage costs due to the state’s proximity to California or west coast markets.
- Entrepreneurs and businesses can take advantage of the foreign trade zones (FTZs) in Reno and Las Vegas as such zones provide logistical benefits, duty reduction and elimination on specific goods and projects.
- The state provides really competitive air cargo costs that will benefit those businesses that require shipping by air.
- A Nevada business can benefit from the fact that the state doesn’t have any personal income tax, corporate income tax, unitary tax, and franchise tax.
- The state and county provide start-ups the opportunity to save costs and grow by utilizing a variety of Nevada business incentives.
Nevada Government Support for Businesses
The Nevada economy and markets have been changing and evolving constantly while providing positive outcomes. Due to the low cost of doing business, the number of start-ups being formed in the state have increased. Businesses are flourishing thus creation of new Nevada businesses or industrial hubs like the City of North Las Vegas are also experiencing rapid economic development. Amidst all this, the support structure provided by the Nevada State to small businesses are playing a key role.
Some of the key factors in the “why start a business in Nevada” list are the numerous incentive and pro-business programs being implemented by the state of Nevada, Department of Business and Industry. Let’s look at what type of support infrastructure is
- Procurement Assistance & Outreach (POP): Selling the products or promoting specialized services offered by a start-up Nevada business to the government can be quite an overwhelming process. Hence, the Procurement Technical Assistance Center (PTAC) implemented the Procurement Outreach Program (POP) with cooperative agreement with the Department of Defense (DOD) and Defense Logistics Agency (DLA) to provide assistance to small businesses in their efforts in contracting federal, state and local government projects.
- Financial Resources: If you are checking your why start a business in Nevada list or how is Nevada different, then financial support is definitely a driver of businesses in this state. The support is being offered by Nevada Governor’s Office of Economic Development (GOED) through accessibility to various financial resources. Some of the popular financial resources include Industrial Development Revenue Bonds (IDRBs), the Silver State Opportunities Fund (SSOF), the Nevada Microenterprise Initiative (NMI), State Small Business Credit Initiative, Nevada Catalyst Fund, and the U.S. Small Business Administration (SBA) loan programs.
- Nevada Opportunity Zones (OZ): Nevada Governor’s Office of Economic Development is responsible for implementing the Opportunity Zone program for new and existing Nevada business. The program is a type of tax incentive that has been designed to encourage long-term investments especially in low-income communities. There are specific areas that have been designated as opportunity zones and you will need to form your business in such a zone to derive benefit.