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I've formed the impression from reading business news articles for several years that Delaware is often the state of choice for any small business to incorporate within. I guess there's something about the state law in Delaware that makes it a particularly attractive state for incorporating. I don't have specifics because this is just a general impression that I've developed from many different sources, but I've been unable to confirm it's accuracy.

But I don't actually intend to move to (or to do a significant fraction of my overall business endeavors in) DE, so in doing some research on this option while planning to remain in RI, I've encountered some RI state laws that seem to make RI-based businesses that incorporate in other states (as described above) subject to additional RI state taxes, thus making the option of foreign incorporation moot in RI.

So although I realize that this question could be interpreted as subjective (and thus, not well-suited to an SE Q/A community), my question is simply: Is there an ideal state in which to incorporate in the USA, and if so, why is it ideal? If someone can address the issues I raised in the second paragraph, I'd also appreciate that. This is perhaps a second question, but I think it's closely enough related that posting it as a separate question might be the wrong thing to do. In particular, if some states are known to make it more difficult (or impossible) to take advantage of foreign incorporation in states that are ideal for incorporating like DE, then I'd appreciate insights on that issue to. My impression as a Rhode Islander is that RI is indeed one such state, but perhaps there are other states that don't create obstacles to foreign incorporation, and if anyone here can list such states in your answer, then that would be a big help too.

I know, I know, this could perhaps be broken up into 2-3 questions, but again, I think they are all pretty closely related, so I'm posting as just one for now. Naturally I welcome suggestions for improving the question.

Kevin Ford The Submariner
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    Hi CopyrightX, I suggest focusing the question on just one aspect, perhaps focusing on what you would consider ideal since that may differ from scenario to scenario. Additionally, you could [edit] to define how this relates to freelancing and what you hope to gain from incorporating as a freelancer. – jmort253 May 22 '13 at 02:54
  • Dear @jmort253. Sorry, I had the impression that this site was not a redux of the old, now-closed Freelance Workers: For freelance workers, contractors, and consultants community. I thought that this community was a Q&A site for self-employed and freelance workers. If this comment seems sarcastic, then I apologize for that's not the intent: you're an old hand here on SE, I know, so I'll defer to your judgment, and my apology is sincere. – Kevin Ford The Submariner May 22 '13 at 03:03
  • I guess I didn't think of that group of workers as being people who would incorporate, but there are apparently some benefits to doing so that I didn't think about. There's obviously some overlap here with OnStartups, but questions about incorporating as a freelancer/self-employed do appear to fit the scope. Thanks for clarifying. – jmort253 May 22 '13 at 03:54
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    It's an excellent question, but IMHO asked at a wrong site. http://answers.onstartups.com/ seems to be a better place for it. – Be Brave Be Like Ukraine May 22 '13 at 04:27
  • @bytebuster - I'm not 100% sure it's off-topic anymore. Freelancers/self-employed share a lot in common with startups, and many freelancers consider themselves to be small businesses. We have an overlap here with OnStartups that we may want to discuss in meta to figure out how to address these. If we close every question just because it can also be asked on OnStartups, then we might unintentionally leave out a significant number of problems that could be well-served by this community. Is there a way we could edit this to make it clear CopyrightX isn't talking about a "Startup"? – jmort253 May 22 '13 at 06:53
  • @jmort253 I don't particularly disagree. Just IMHO, I'm concerned about the word of "incorporate". I'm quite aware that "incorporate" may be understood as an independent contractor, e.g. "John Smith the Private Entrepreneur" company (which is the case for Ukraine), but I guess it does not apply for U.S. – Be Brave Be Like Ukraine May 22 '13 at 07:01
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    @bytebuster and others - This is a great question that will help define the site scope. I started a meta discussion on this post here: http://meta.freelancing.stackexchange.com/questions/18/how-do-we-deal-with-questions-that-might-be-on-topic-on-other-sites-like-onstart – jmort253 May 22 '13 at 07:11

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