Florida is not only known for its sunshine and beaches but also for its favorable business environment. If you are considering starting a business or expanding your existing one, Florida might just be the place for you. In this comprehensive guide, we will walk you through the process of registering your company in Florida and explore the advantages and disadvantages of incorporating in Florida compared to Delaware. We will also provide key insights into the business landscape and popular companies in Florida, along with state facts to help you make an informed decision.
Pros of registering a business in Florida vs Delaware
When considering where to register a business, it’s important to weigh the pros and cons of different states. Florida and Delaware are two popular options for entrepreneurs. This paragraph explores the advantages of registering a business in Florida compared to Delaware, highlighting factors such as tax benefits, business-friendly laws, and flexibility in company structure.
✔️Business-friendly legal environment
Florida is known for its business-friendly legal environment, which includes streamlined regulations and a supportive framework for entrepreneurship. The state offers an efficient online registration process, making it quick and convenient to incorporate a business.
Additionally, Delaware is renowned for its well-established and respected corporate law, which provides businesses with clear guidelines and a strong legal infrastructure to operate within.
✔️Access to financial resources
Florida has a robust financial ecosystem, with a wide variety of funding options available for businesses. The state is home to many banks, venture capital firms, and angel investors that actively support entrepreneurs. To find out more about the institutions based in Florida, please click here. The availability of financial resources can be advantageous for businesses seeking investment or startup capital.
On the other hand, Delaware is known for being a major hub for corporate entities, offering access to a network of renowned banks and financial institutions. The state’s laws provide flexibility and protection for corporations, limited liability companies, and limited partnerships, making it an appealing choice for businesses seeking sophisticated financial services.
✔️ Corporate-friendly tax policies
Florida has a pro-business reputation and is known for not imposing a state income tax on corporations, making it an attractive choice for businesses looking to reduce tax expenses and increase profitability. The state also offers a range of programs, incentives, and resources to help companies succeed.
However, although Delaware imposes a state income tax, its corporate tax rate is relatively competitive, and its tax structure may be favorable for businesses that have significant intellectual property or intangible assets.
✔️ Court expertise and jurisdiction
Florida’s courts are acknowledged for their experienced judges and flexible procedural rules. The state’s judicial system is composed of the Supreme Court, six district courts of appeal, 20 circuit courts, and 67 county courts, each playing a distinct role in delivering justice across the state.
In terms of procedural flexibility, Florida courts have implemented rules that allow for efficient and expedited litigation. The Florida Rules of Civil Procedure, for example, promote fair and just resolution of civil cases while also ensuring a timely and streamlined process. The wealth of experience and expertise among Florida judges contributes to the state’s reputation for having a strong and competent judiciary.
On the other hand, Delaware is widely recognized for its specialized court system, the Court of Chancery, which has a longstanding history of handling corporate disputes and complex business cases. The state’s expertise in corporate law and its business-friendly legal precedents make Delaware an appealing choice for businesses concerned about litigation and seeking a predictable and experienced judicial system.
✔️ Privacy and confidentiality
Florida stands out for its strong privacy protection for businesses, which is increasingly important in today’s digital world. The state provides comprehensive data privacy laws and regulations, such as the Florida Information Protection Act (FIPA), which requires businesses to take specific measures to safeguard sensitive information. Additionally, Florida’s courts uphold privacy protection and have a track record of strict enforcement of privacy laws and business contracts.
Although Delaware also offers privacy and confidentiality protection for businesses, its laws are not significantly different from other states. However, Delaware’s robust privacy laws, including allowing for anonymous directors and managers, can be an advantage for businesses that prioritize discretion and protection of personal information.
Cons of incorporating in Florida compared to Delaware
The section below explores some of the cons of incorporating in Florida compared to incorporating in Delaware, highlighting potential disadvantages that business owners should keep in mind.
❌ Higher registration fees
Although Florida offers several advantages for businesses, it is important to consider the relatively higher registration fees in the state when compared to Delaware, which is widely recognized for its lower incorporation costs.
In this section, we’ll be looking at the taxes and fees for an LLC in Delaware vs Florida.
| Fee type | Delaware LLC | Florida LLC |
|---|---|---|
| LLC Filing Fee | $110 | $125 |
| Same Day Service | Yes – $100 | No |
| Annual Franchise Tax | $300 | No |
| Change Registered Agent Fee | $50 | $35 |
| Certificate of Good Standing | $125 | $260 |
❌ Shareholder rights
Businesses opting to register in Florida may find it beneficial as the state offers certain legal protections and benefits to corporate shareholders, such as the opportunity to file derivative lawsuits and the right to access corporate information. Moreover, the state’s corporate laws provide flexibility in the formation and regulation of corporations, which has attracted many small businesses to register there.
On the other hand, Delaware has long been recognized for having an extensive legal framework that provides comprehensive protections and benefits to shareholders. This includes the Delaware Court of Chancery, which has a broad jurisdiction over corporate matters and a reputation for providing decisions that are favorable to shareholders. Investors are more familiar with Delaware’s corporate law system, and as a result, some institutional investors and venture capitalists may request that businesses incorporate there.
❌ Lawsuit-prone environment
Florida has been ranked as one of the top states for lawsuits, with a legal environment that can be more plaintiff-friendly than some other states. According to data from the NAIC (National Association of Insurance Commissioners), litigation trends in Florida have consistently been much higher than any other state. For example, Florida property lawsuits account for 76% of insurer litigation in the state, indicating a high level of legal activity. Furthermore, a report highlights that Florida leads the nation in lawsuits per capital, with over 59,400 cases filed from March 2022 to March 2023. This data reflects the significant volume of lawsuits in Florida, further supporting its reputation as a state with high litigation rates.
Delaware, on the other hand, with its well-established legal system, can provide businesses with a stable and predictable legal environment, reducing the risk of costly and unpredictable litigation.
❌ High insurance costs
Florida and Delaware have different business insurance costs, with Florida often experiencing higher rates compared to Delaware. The cost of business insurance in Florida can be influenced by several factors, including the state’s geographic location, population density, and industry risks. Florida’s high business insurance costs can be attributed to various factors, including its susceptibility to natural disasters such as hurricanes, which can result in increased property and liability risks for businesses. Additionally, Florida’s vibrant tourism and hospitality sector, along with its large population, can contribute to higher liability and workers’ compensation insurance costs.
On the other hand, Delaware’s business insurance costs tend to be lower compared to Florida. While Delaware is not exempt from natural disasters, its location further inland and its smaller population may contribute to reduced insurance rates. Moreover, Delaware’s business-friendly environment, favorable legal system, and lower risk profile in certain industries may also contribute to lower insurance costs for businesses operating in the state. Ultimately, the specific insurance costs for businesses in Florida and Delaware will depend on various factors, including industry type, location, and specific risk exposures.
❌ Higher cost of living and labor
Choosing where to register a business can heavily impact expenses, and there are notable differences between Florida and Delaware. Florida typically has a higher cost of living compared to Delaware, which can lead to higher overall business expenses, including labor costs. This may make it more challenging for businesses to attract and retain highly skilled employees, especially those in competitive industries. In contrast, Delaware’s lower cost of living can provide businesses with cost savings on employee salaries and other expenses, increasing their overall competitiveness and potential profitability.
❌ Limited corporate legal advantages
While Delaware is renowned for its corporate-friendly legal system, businesses based in Florida may not enjoy the same level of legal advantages and protections. Delaware’s corporate laws offer greater flexibility and protection, particularly for larger or publicly traded companies. This can be a crucial factor for businesses seeking to optimize their corporate structure, protect shareholders’ interests, or attract institutional investors.
How to register a business in Florida?
Registering your business is a crucial step in ensuring that your business is legitimate and recognized by the state and local government. In the section below, we will provide you with an overview of the steps required to register a business in Florida and some resources that can help you through the process.
1. Choose a business entity
Determine the most appropriate business entity for your company. Options include a Corporation, Limited Liability Company (LLC), or Partnership. Consider consulting with a legal professional to understand the advantages and disadvantages of each option.
2. Choose a business name
Select a unique name for your business that complies with Florida’s naming requirements. Conduct a search on Florida’s Division of Corporations website to ensure the chosen name is available and not already in use.
3. Appoint a registered agent
All US companies must appoint a registered agent who will serve as the point of contact for legal correspondence and process service in Florida. The registered agent must have a physical address in Florida.
4. File necessary forms
Prepare and file the appropriate documents to register your business with the Florida Division of Corporations. The required forms may differ based on the chosen business entity. You can file the forms online through the Division’s website or mail them to the Division by printing and completing the necessary forms.
5. Obtain an Employer Identification Number (EIN)
All companies must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This nine-digit number is used for tax purposes and is required when conducting business operations in the United States.
6. Obtain necessary permits and licences
Depending on the nature of your business, you may need to obtain specific permits and licences to operate legally in Florida. Check with the Florida Department of Business and Professional Regulation to determine the requirements for your industry. Below, find three examples for industries that may need an additional license.
- Professional Services Industry: Businesses providing professional services, such as legal firms, consulting firms, or advertising agencies, may require licenses specific to their profession or industry to ensure compliance with professional standards and regulations.
- Information Technology Industry: Businesses engaged in information technology services such as computer repair companies, data processing companies, software developers, and web designers may require licenses to ensure compliance with state regulations and cybersecurity standards.
- Insurance Industry: Businesses involved in the insurance industry, such as insurance agencies, may require licenses to ensure compliance with state insurance laws and regulations.
7. Fulfil tax obligations
Register with the Florida Department of Revenue to meet your tax obligations. This includes sales tax, payroll tax, corporate income tax, and any other applicable taxes based on your business activities.
8. Comply with additional requirements
Non-U.S. companies may have additional obligations and requirements to fulfil at the federal level. Consult with an attorney or tax advisor to understand any specific compliance requirements for your business.
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It’s important to note that the process for registering a business can vary based on factors such as the chosen business entity, industry, and specific circumstances of the non-U.S. company. Seeking legal assistance and consulting with professionals in the U.S. can provide valuable guidance and ensure compliance with all necessary regulations and requirements.
How to set up a US Subsidiary
An important consideration for foreign companies wishing to do business in the USA is whether and when to form a US entity. In this eBook, discover when and why businesses should consider setting up a US entity.
Yearly Comparison of Business Registrations in Florida vs Delaware
Year after year, Florida witnesses a considerable number of businesses registrations. In recent years, the state has experienced an upward trend in business registrations, competing closely with Delaware. Below is a comparison of the business registration statistics between the two states:
Below is a yearly comparison of business registrations in Florida, specifically LLC registrations, corporation registrations, statutory trusts, and total business entities:
Florida
2021:
LLC Registrations: 278,066
Corporation Registrations: 143,302
Statutory Trusts: 1,480
Total Business Entities: 2,684,869
2022:
LLC Registrations: 307,517
Corporation Registrations: 156,888
Statutory Trusts: 1,557
Total Business Entities: 2,987,160
Delaware
2021:
LLC Registrations: 1,291,911
Corporation Registrations: 370,404
Statutory Trusts: 25,547
Total Business Entities: 1,825,050
2022:
LLC Registrations: 1,403,986
Corporation Registrations: 386,254
Statutory Trusts: 26,900
Total Business Entities: 1,966,110
FOOTHOLD AMERICA
Well-known International Companies doing business in Florida
Florida is an attractive destination for international companies seeking to expand their business into the United States. The state’s strategic location, diverse population, strong economy, and business-friendly policies make it a favorable location for companies from various countries around the world. Here are some popular non-US companies that are doing business in Florida:
Airbus
Airbus, a leading aircraft manufacturer based in France, has an engineering center in Miami, Florida. The center employs over 200 engineers and provides technical support and services to airlines in the United States.
Siemens
Siemens, a German multinational conglomerate, has offices and facilities throughout Florida, providing a range of solutions and services, including healthcare technology, building automation, and digital solutions for industrial customers.
Bayer
Bayer, a German multinational pharmaceutical and life sciences company, has a significant presence in Florida. With multiple facilities and offices throughout the state, Bayer’s activities in Florida include research and development, manufacturing of medical products, and crop science.
Novartis
Novartis, a Swiss multinational pharmaceutical company, has a significant presence in Florida, with research and development facilities and offices in the state. The company’s activities in Florida focus largely on oncology and neuroscience research.
State Facts for expanding your business in Florida
Florida boasts a thriving economy, stunning beaches, and an enviable quality of life, making it an ideal destination for business growth. In this section, we will explore key state facts regarding workforce, quality of living, and talent pools that make Florida an appealing choice for expanding businesses. Join us as we uncover why Florida is the perfect place to expand your business, offering a high-quality workforce and exceptional quality of living.
👌 Hiring
When it comes to expanding your business in Florida, the state offers a rich and diverse talent pool. Florida is home to several top-ranking universities and colleges, including the University of Florida, Florida State University, and the University of Miami, which produce graduates with expertise in a wide range of fields.
In terms of available talent, Florida has a particularly strong presence in hospitality due to its thriving tourism industry. This abundance of low-skilled labor makes it easier for businesses in the hospitality sector to find employees to meet their staffing needs.
However, beyond the hospitality sector, Florida also boasts a thriving tech industry, with a strong presence of skilled professionals in areas such as technology, tech sales, marketing, and more. Companies looking to fill positions in these fields can tap into the talent pool offered by Florida’s universities and colleges, as well as experienced professionals already established in the state.
Overall, Florida provides abundant opportunities for businesses to find talented individuals across various industries. Whether it’s hiring graduates from prestigious institutions or recruiting experienced professionals, the state offers a diverse talent pool to meet the needs of expanding businesses.
👌 Cost of living
Expanding businesses to Florida offers the advantage of a relatively affordable cost of living compared to many other states in the USA. According to Talent.com, the average annual wage in Florida is approximately $56,333, providing employees with a competitive income to support their living expenses.
When comparing specific cities, there are variations in the cost of living, such as Miami and Tampa. Miami generally has a higher cost of living compared to Tampa. The differences can be seen in housing, transportation, groceries, and other key factors that impact the overall cost of living.
For instance, the median home price in Miami is around $585,000, whereas in Tampa it is approximately $409,000. Similarly, the average monthly rent for a one-bedroom apartment in Miami might be roughly $2,400, while in Tampa it could be closer to $1,600.
These figures provide a general comparison, but it’s important to note that cost of living can vary even within specific cities and individual circumstances. Businesses planning to expand to Florida should recognize these differences and consider how they may affect the overall cost of living for their employees.
👌 Talent pools
Florida boasts a rich talent pool that attracts major tech companies. According to a survey by Forbes, Florida ranked No. 9 nationally as a talent pool for 26 of the biggest tech companies in the nation, including Amazon, Microsoft, and Google. This indicates the availability of skilled professionals in various technology-related fields.
Furthermore, Florida’s talent pool is not limited to the tech industry. The state’s diverse economy and vibrant business environment attract talent across various sectors, including healthcare, finance, hospitality, and more. The combination of a strong talent pipeline and favorable business conditions make Florida an attractive destination for companies looking to expand their operations.
👌 Quality of life
Florida has been ranked highly for its overall quality of life. The state’s warm climate, beautiful beaches, and diverse culture make it an attractive destination for tourists as well as residents.
According to a report by US News & World, Florida ranks ninth overall in the United States for its quality of life.
Florida also has ample access to healthcare facilities, including several renowned hospitals such as the Mayo Clinic in Jacksonville and the Cleveland Clinic in Weston. The state’s healthcare system has been ranked as the fifth-best in the nation according to a report by WalletHub.
The state’s natural charm and abundant recreational activities, such as fishing, boating, and golfing, also contribute to its high quality of life rating. Furthermore, Florida’s low state income tax rate is appealing to many residents.
Overall, Florida offers an excellent quality of life with warm weather year-round, access to major healthcare facilities, and a wide range of recreational activities. However, it is important to consider the potential negative impacts of rapid urban growth when weighing these advantages.
Are you expanding to the USA? Let’s talk!
Foothold America is a trusted partner that can provide the expertise and guidance you need to navigate the complex legal landscape of establishing your business in the USA. Our team of experts specializes in US business expansion, including employment and we can provide you with customized advice and support at every step of the way.
Whether it’s helping you understand visa requirements, ensuring compliance with employment regulations, or assisting with payroll and tax obligations, we have you covered.
By partnering with Foothold America, you can have peace of mind knowing that you have a knowledgeable and experienced team on your side. We will work closely with you to understand your specific needs and help you build a solid foundation for your business in the USA.
Ready to take the next steps in expanding to the USA? Contact us today to learn more about how Foothold America can support you on your journey.
FAQ’s
Get answers to all your questions and take the first step towards registering your business in Florida.
The processing time for business registrations in Florida typically ranges from a few days to a few weeks, depending on the workload of the Division of Corporations.
Businesses in Florida must file an annual report with the Division of Corporations and maintain compliance with tax obligations, licenses, and permits.
Yes, Florida allows businesses to change their entity type through a legal process known as conversion or re-domestication.
Yes, Florida provides various resources and incentives for small businesses, including access to capital, training programs, and government contracts. Below are some examples of specialized resources and incentives available for small businesses in Florida:
- Access to Capital: The state offers several financial assistance programs and loans that aim to support small businesses. One notable program is the Florida Small Business Emergency Bridge Loan Program, which provides short-term, interest-free loans to businesses in times of disaster or economic downturns. Additionally, the Florida Opportunity Fund helps small businesses secure venture capital investment.
- Training and Development: Florida has a range of training programs and initiatives to enhance the skills and knowledge of small business owners and employees. For instance, the Florida Small Business Development Center (SBDC) network provides free consulting and training services to help businesses improve their operations, marketing strategies, and financial management. The SBDC also offers workshops and courses on various business topics.
- Government Contracts: Small businesses in Florida can benefit from government contracting opportunities. The state government has set aside a certain percentage of its contracts specifically for small businesses, ensuring a fair chance for small enterprises to compete and secure government projects. The Office of Supplier Diversity (OSD) assists small businesses in identifying and pursuing government contracts.
- Incubators and Innovation Hubs: Florida hosts a variety of incubator programs and innovation hubs that offer support and resources to startups and small businesses. These programs provide access to mentorship, office space, networking opportunities, and funding sources. Examples include the University of Florida Innovation Hub and the Tampa Bay Wave accelerator program.
- Tax Incentives: Florida offers several tax incentives to small businesses, reducing their financial burden. These incentives may include tax credits for job creation, research and development, and investment in specific industries such as manufacturing and technology. The Small Business Development Center can provide guidance on available tax incentives and eligibility requirements.
It’s important for small businesses in Florida to explore these resources and incentives to maximize their growth potential and navigate the business landscape more effectively.
Yes, Florida requires all corporations and LLCs to have a registered agent. This is a person or company designated to receive legal documents and official correspondence on behalf of the business.
The registration fee for a new Florida/Foreign LLC is $125.00. There are additional fees for changes of registered agent, articles of correction, and registered agent resignations.
The fees for a new Florida/Foreign Corporation includes a $50.00 filing fee for a Certificate of Name Change, an $8.75 fee for a Certificate of Registration Under Seal, and $52.50 fee for a certified copy of the application file.
It’s important to note that these fees are subject to change, and additional fees may apply depending on the specifics of the business. Additional fees may include fees for changes of registered agent, dissolution and withdrawal, foreign name registration and renewal, non-profit reinstatement, and profit reinstatement. Therefore, it is recommended to refer to the Florida Department of State’s Division of Corporations for the most up-to-date and accurate information.
