While the legal framework in Nevada is favorable to companies, one of its most appealing aspects is that a business entity doesn’t have to be physically present to enjoy the benefits of incorporation here and many are doing so. Estimated to account for 80 percent of the 71,036 new business entities incorporated here last year, out-of-state incorporations are fast becoming a boon to Nevada, contributing mightily to the nearly $57 million total levied by the state through licensing and other fees for new companies as well as annual renewals for the 239,909 businesses in good standing with the Secretary of State’s office.Last week, the Business Press examined some of the misconceptions about incorporating in Nevada among out-of-state businesses, primarily the erroneous idea that incorporating a business in Nevada allows owners to avoid taxes in the state in which they reside and do business.
That fallacy is maintained and sometimes even encouraged by a few resident agents, who derive their income acting as an out-of-state corporation’s official in the jurisdiction and are therefore the main beneficiaries of increased activity. The intense competition to register business entities here have lead to other practices among a small number of resident agents that skirt the ethical boundary.
Despite the actions of a few bad apples, out-of state incorporations are a legitimate and lucrative business, with Nevada becoming the third largest jurisdiction in terms of new incorporations per population density behind traditional leader Delaware as well as South Dakota. As the Legislature looks to beef up the state’s attractiveness this legislative session by broadening the base of legal protection, the industry is only expected to grow.
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