Nevada is home to more corporations than all the states combined, including 99.9% of all Fortune 500 Companies. In 2004 alone, more than 40,000 corporations were formed in the state. Here’s why.

Financial privacy

Nevada designed its unique corporate structure after Delaware, the former corporate hotspot. Under Nevada law, company owners and investors are allowed to remain completely private. In most other states, one has to publicly file the names and addresses of the company’s stockholders, directors, and offices. With such an arrangement, a simple call to the secretary of state can give anyone access to corporate information.

Nevada, on the other hand, only requires the name of the president, secretary, treasurer, and directors. The vice presidents and stockholders are protected from public knowledge. This way, a business owner can assume the post of vice president, allowing him complete control of the company while staying out of the public eye.

Shareholder Privacy

In Nevada the privacy of share holders is paramount. This is perhaps the most common reason why companies choose Nevada as their business home. While other states require at least basic background information, Nevada doesn't even ask who owns the stock. ln this state, the company's ownership is not kept on file or considered a matter of public concem.

IRS independence

In 1992, then Governor Bob Miller received an information exchange offer from the Internal Revenue Service (IRS). The IRS was offering the Nevada government a reciprocal arrangement with their business database in exchange for information on all Nevada corporations and residents. In a true display of its respect for privacy, Miller refused to take any part in the program.

Excellent asset protection

In the US, when a corporation gets sued, the initiator must file the case in the state of incorporation. This is why corporate statutes are a major consideration when choosing where to incorporate. In most US states, these statutes are designed to limit the liability of directors, officers, stockholders, and other representatives. Nevada’s statutes, on the other hand, have defined all possible cases of fraud. This way, the representatives’ personal assets are protected even when the corporation files bankruptcy, gets sued, or finds itself in any unfortunate situation.

Exemption from state taxes

Nevada is one of the few remaining states who do not impose taxes on the income of its citizens and corporations. While there are a few tax deductions exclusive to corporations (as opposed to individuals), Nevada taxpayers can structure their finances on their own to minimize their tax liability. It is not promoting tax evasion – it only opens opportunities for legal tax avoidance.

No minimum capital

While most states require a capital of at least $1,000, Nevada has no minimum capital requirements. That means you can start a small corporation in Nevada with a tiny capital right out of your pocket.

No corporate structure

Nevada allows one person to play president, director, treasurer, and secretary at once. Other states require at least three directors or officers. Nevada also recognizes corporations formed via phone, fax, or mail, so that one doesn’t need to be in the state to incorporate or hold annual meetings. This way, you can start your corporation and work with your team outside of Nevada, and live and work from any state.

Protection across state borders

Nevada corporations are covered by Nevada law, no matter where it conducts business. For instance, when a Nevada corporation gets sued in another state where it is authorized to operate, Nevada law will prevail in most cases.

Use of nominee officers

Nevada is the only state that supports the use of nominee officers. Nominee officers work like spokespersons – they serve as legal representatives for conducting all aspects of your business. They can sign documents as the president, director, secretary, and treasurer (but not as the vice president, who has full signatory control), but have no real control over the company.

How it works

First, note that not everyone can use Nevada’s pro-business stance to their advantage. The above strategies work best for self-employed people who actually manage the business themselves. To incorporate in Nevada, one has to work with his or her current company outside Nevada, placing it in a position that provides services or resources to the Nevada Corporation. You can then divert your taxable profits to Nevada, where it will be exempted from state taxes.