Form a Delaware LLC from China: Complete 2026 Guide

What makes Delaware worth a look for someone in China: the state fee is $110 on paper ($110 online), and after that the state-level upkeep is $400 flat annual franchise tax (raised from $300 under Delaware House Bill 400, signed May 21 2026, effective retroactively for the 2026 tax year; first billed with payments due June 1, 2027), no separate annual report required. The state levies no tax on LLC income earned outside the state, though the flat annual tax applies regardless of activity. Delaware does not require member names on the public formation certificate. None of this changes your China tax position, which sits on top of the US picture, but it does mean Delaware itself adds little friction. Among the five states we cover, Delaware is the state most recognised by US investors and lawyers.

Founders in mainland China usually form a US LLC to sell to overseas customers, receive US-dollar payments through a US business bank account and run an e-commerce or software business that targets non-Chinese markets. Chinese tax residents are taxed on worldwide income, so the LLC does not take profit outside the Chinese tax system. The practical questions are how China's individual income tax (IIT) rules treat overseas entities you control, what reporting you owe in China, and how money can lawfully move between the US account and China.

Checklist once the EIN letter arrives: (1) Operating Agreement signed and stored; (2) bank account application submitted; (3) Stripe and/or PayPal applications, subject to their own review; (4) your Delaware annual obligation ($400 flat annual franchise tax (House Bill 400, raised from $300), first billed with payments due June 1, 2027) in your calendar; (5) Form 5472 with a pro forma 1120 on the federal calendar. Federal Beneficial Ownership Information reporting is not something you need to do: FinCEN's rule in force since August 14, 2026 permanently exempts all US-formed LLCs.

Choose Delaware when you're planning to raise US venture capital or want the state most investors and legal counsel are already familiar with, and you're comfortable with the flat $400 annual tax (raised from $300 by 2026's House Bill 400) regardless of your LLC's size. If your priorities lean another way, compare the other four states first, because moving a Delaware LLC to another state later means dissolving it and forming a new one.

The IRS international EIN line (267-941-1099) answers from 6 a.m. to 11 p.m. Eastern. China does not observe daylight saving, so when the US is on daylight time China is 12 hours ahead and the window is 6 p.m. to 11 a.m. Chinese time; once US clocks go back it is 13 hours and the window becomes 7 p.m. to noon. A morning call from China falls inside the window in both periods. Allow 45-60 minutes.

Forming from China is a five-step job. One: choose and check the name. Two: appoint a registered agent with a physical Delaware address. Three: file the Delaware formation documents. Four: obtain the EIN, entering "Foreign" or "N/A" where Form SS-4 asks for an SSN or ITIN; by phone on 267-941-1099 it takes about 45-60 minutes, by fax or mail 4-6 weeks. Five: open the business bank account online. No US trip is needed at any point.

Delaware is the common pick for a Chinese founder who expects US investors or acquirers. The flat $400 annual tax is predictable, and counsel on both sides will know the entity. Raise the Chinese classification and reporting position early, since diligence tends to ask about it.

Here is the first-year budget for a Delaware LLC owned from China. State filing: $110 ($110 online). Registered agent: typically $100-150 a year, or included in EasyBrise Global Launch at $295 for year one ($149 a year after that). EIN: free if you apply to the IRS yourself. Bank account: usually free at Mercury or Relay. Recurring state requirement: $400 flat annual franchise tax (raised from $300 under Delaware House Bill 400, signed May 21 2026, effective retroactively for the 2026 tax year; first billed with payments due June 1, 2027), no separate annual report required. Most founders land well under $500 all-in for year one.

Over five years, the state-level cost of a Delaware LLC is a $110 filing fee plus $400 a year for five years, so $2,110 in total, before the registered agent. That makes Delaware the most expensive of the five states on this measure. The same arithmetic across the five states runs from $50 to $2,110. For a Chinese owner, the bigger variable is not this US state cost but how China's individual income tax rules and foreign-exchange quota apply.

As a Chinese owner, your recurring dates look like this. State: Delaware's $400 annual tax is first billed with payments due June 1, 2027, and there is no separate annual report. Federal: Form 5472 with the pro forma Form 1120 is due on the return due date, April 15 for a calendar-year LLC, extendable with Form 7004. For the one-off EIN call, the IRS line (6 a.m. to 11 p.m. Eastern) is open 6 p.m. to 11 a.m. Chinese time in US daylight time (7 p.m. to noon in US standard time). Put the state date and the federal date in your calendar when the EIN arrives, because a missed Form 5472 carries a $25,000 minimum penalty.

Since 2018 China's individual income tax rules have included controlled-foreign-company provisions aimed at individuals who control entities in low-tax jurisdictions. Whether a US LLC falls inside them is not clear-cut. The question turns on a whitelist-style treatment of countries with comparable tax levels, and whether the United States qualifies for individual owners is a genuine grey area rather than a settled answer. Enforcement against individuals has historically been light, but light enforcement is not the same as legal clarity, so treat the point as open and get Chinese tax advice. On the US side the LLC files Form 5472 and a pro forma Form 1120 each year, with a $25,000 minimum penalty for a missed or incomplete filing.

The reason the whitelist question is unsettled is that the rules were written with companies and low-tax havens in mind, and applying them to an individual who owns a US limited liability company means reading provisions designed for a different fact pattern. A clear answer for the United States has not been published for individual owners. That does not mean the rules are being enforced against founders, and enforcement has historically been light, but it does mean you should record your reasoning and your adviser's advice.

Ask a Chinese tax adviser four things before forming. Does your ownership level engage the IIT controlled-foreign-company provisions? Does the United States count as a comparable-tax jurisdiction for an individual owner? What must you declare and when, and in which form? And how will you lawfully remit profit, given the foreign-exchange quota? Get the answers in writing, because the whitelist point is a grey area.