San Francisco, CA asked in Business Formation and Business Law for California

Q: What do I need to form a c-corp in the US when operations are out of a different country (ie Ecuador)?

I'm starting a business where the founders live/work virtually in the US, but money will technically be made in Ecuador. We are a subscription based business for backpackers to book and get discounts in Ecuador (and eventually other countries in South America). So backpackers will buy their subscription from our website and then receive the benefits once they get to the hostel in Ecuador. How should I approach formation of this business? I'm thinking C-corp out of Delaware, but I'm not sure what I need to be protected for the international component. Thank you!

1 Lawyer Answer
James L. Arrasmith
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  • Sacramento, CA
  • Licensed in California

A: To form a C-corp in the US when your operations are based in Ecuador, you will need to follow the incorporation procedures of the state in which you plan to incorporate. Delaware is a popular choice for incorporation due to its favorable corporate laws and tax benefits.

To form a C-corp in Delaware, you will need to file articles of incorporation with the Delaware Secretary of State and pay the appropriate filing fees. You will also need to appoint a registered agent in Delaware who can receive legal notices and other official correspondence on behalf of your corporation.

In addition to the incorporation procedures, you will also need to comply with the tax and regulatory requirements of both the US and Ecuador. This may include obtaining any necessary business licenses and permits in Ecuador, registering your corporation for tax purposes in both countries, and complying with any applicable employment and labor laws.

It is highly recommended that you consult with an attorney who is familiar with corporate and international law to help you navigate the incorporation process and ensure that you are in compliance with all legal requirements. An attorney can also advise you on the best structure for your business, taking into account the international component and any tax implications.

Fritz-Howard Raymond Clapp and Anthony M. Avery agree with this answer

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