It is very easy to open a business in Uzbekistan. You can register a legal entity (LLC) and open a bank account without leaving home. Registration of a legal entity is such an easy and inexpensive procedure that sometimes potential business partners register a business even without a clear plan of what this business will do. From what I know, it is almost as easy to register a limited liability company (hereinafter referred to as the "company") in Kyrgyzstan, Kazakhstan and Tajikistan. This is generally good for startups. But, at some point in the life of a startup, it becomes necessary to register a company in one of the foreign countries. This is almost always due to obtaining financing from foreign venture investors or the need to receive money from clients.

Why Delaware?

I will write separately about the registration of a company in countries popular among Central Asian startups, such as London, Singapore or Estonia. Here I will write about the opening of a company in Delaware, USA. As I wrote earlier, there are several reasons why most startups choose Delaware to register a company. This is, among other things:

1. A convenient, understandable and relatively cheap procedure for registering a legal entity. Registration of the company can be carried out within a few hours.
2. Favorable corporate legislation: Delaware has a well-established corporate legislative framework. This includes laws governing corporate governance, shareholder rights, and mergers and acquisitions (M&A).
3. Court system: Delaware has a specialized court system for resolving business disputes. 
4. Tax benefits: Delaware has a favorable business tax structure, with no sales tax and low income tax rates. The advantages for startups include a convenient tax regime regarding options, M&A and capital gains.
5. Widely recognized: Delaware is a respected jurisdiction and recognized as a leader in corporate law. This can make it easier for businesses to raise capital and attract investors.

It must be said that almost no one thinks so deeply about all the advantages of registering a company in Delaware. Often the reasons are formulated as "the investor said so" or "everyone does so." Whatever it was, choosing Delaware, it is unlikely that the founder will regret his choice, because any venture investor or accelerator in any country in the world is likely to be ready to invest money in a Delaware company. But at the same time, we must also not forget about the legal restrictions on the withdrawal of capital, which may limit your local venture investors in their actions. In Uzbekistan, for example, companies cannot withdraw more than 10 thousand US dollars to invest in foreign companies. If you plan to attract investments from local funds, then you should consult with lawyers on this issue.

Registration of a legal entity

By registering a company, I will mean several actions necessary for the successful start of the company's work, namely: registration of a legal entity – a corporation, issue of shares, registration with tax authorities and opening a bank account. There are three ways to register a legal entity: do everything yourself, use the services of "registrar sites" or use the services of consultants (usually lawyers). It should be borne in mind that these paths are not interchangeable and the choice depends on your specific case. 

He is his own "registrar"

In fact, the procedure for registering a company in Delaware is very simple and with a strong desire, the founder will be able to register his corporation himself through the website of the Delaware Department of Corporations. A short instruction in English can be read here. So, to register a corporation through the Corporate Department's website, you need to:

1. Choose the form of ownership of a legal entity. This is usually a choice between “LLC” and “Corporation". For most startups that want to attract external financing, the choice is obvious and it is a corporation. I will write the difference between “LLC” and “Corporation” and why startups should register the latter in the following articles.

2. Get the services of a registered agent. According to the laws of the state of Delaware, every company registered in Delaware must have a registered agent (in short, this is your legal address). If you have a registered office in Delaware, you can act as your registered agent yourself. If not, then you need to use the services of companies that provide a legal address. Here is a list of several companies that operate in Delaware (Disclaimer: This is not an advertisement. The list is not final and there are hundreds of such companies):

• Northwest Registered Agent 
• LegalZoom
• Incfile
• Rocket Lawyer
• InCorp
• SunDoc Filings

3. Come up with and reserve the company name here. You need to come up with the main part of the name and choose the ending from the following list (while the most common is “Inc.”): Inc., Corp., Incorporated, Corporation, Association, Company, Club, Foundation, Fund, Institute, Limited, Society, Syndicate, Union.

In fact, this process can be skipped, because it costs $75 to reserve a company. I advise you to check the absence of a similar name here and proceed to the next step. If you think that you have the most unique name and it can be booked in a couple of days ahead of you, then follow the instructions above.

4. Draw up a Certificate of Incorporation, which translates as a Certificate of legal registration, but, in fact, this is "our" company charter. The Delaware Corporate Department also helps entrepreneurs here and gives detailed instructions here. The charter of a Delaware company may be on one page, or it may be in twenty pages (an additional fee is charged for each additional page). In addition to the company name, it is necessary to include in the articles of association information about the registered agent, the legal address in Delaware (this is the address that one of the companies in paragraph 2 above will give you), the number of shares, the nominal value of each share, the name and address of the authorized person (usually the founder himself). You can specify your foreign address (in Astana, for example).

5. Send the charter for registration to the Corporate Department. To do this, you can use the online registration service here or send the signed document by mail to: Division of Corporations - John G. Townsend Building – 401 Federal Street – Suite 4 – Dover, DE 19901.

The cost of registration will depend on the speed of registration and starts at $89, plus $ 9 for each additional page in the charter starting from the second page. I recommend using the "next day service" for an additional fee of $ 100.

The fact of registration is confirmed by sending a copy of the charter with the registrar's stamp by mail. You choose the courier at registration (Fedex, DHL or USPS Mail). If you are in Central Asia, you can wait until you receive a copy of the charter, or you can check the fact of registration using the same link that checked for the absence of identical brand names. On average, within two business days, you will become a happy founder with your corporation in Delaware.

Issue of shares, TIN and bank account

The most difficult part begins immediately after you have received confirmation of your company's registration. Unlike "LLC" or "LLP" in our understanding, a newly registered corporation does not yet have any shareholders, directors, or CEO. There is only an authorized representative – the registrar. 

At this stage, the "registrar" must "transfer" the company to the directors or director (equivalent to the supervisory board). The Board, in turn, decides on the issue of shares and the sale of shares to the founders. Next, a decision is made on approving the composition of the board of directors, appointing the General Director (President/CEO), appointing the secretary and other heads of the company, as well as a decision on opening a bank account. Each of these processes needs its own article, which I will do.

The path is easier

If you do not have a legal education in American law, or rather in the law of the state of Delaware, then this section is for you. With the development of technology, company registration procedures are also developing. A corporation in the USA can be registered much quickly and cheaply with the help of the same startups that you are trying to create. The market for company registration services is very saturated. In addition to registering, issuing shares, obtaining a taxpayer number and opening a bank account, for a small fee, such companies provide a bunch of "chocolates" so that you become their client. Below is a list of several companies that focus specifically on startups, with a brief description of the list of services and bonuses that they offer upon registration (The disclaimer again: This is not an advertisement. The list is not final and there are hundreds of such companies. I recommend, for example, to seek advice from ChatGPT from Open AI and make your own list):

Stripe Atlas is a service provided by Stripe. With Stripe Atlas, entrepreneurs and companies can easily register a business, open a bank account and accept payments through Stripe USA. Below are some advantages of Stripe Atlas services:

Ease of registration: Stripe Atlas makes it easy to register a business in the United States and undertakes the paperwork for issuing shares and obtaining a taxpayer number. The cost of the service package is 500 USD.

Banking assistance: Stripe Atlas will help you open a bank account in the USA through its partners, which can be difficult to do if you are not physically located in the USA. 

Payment processing: As a Stripe Atlas user, you can accept payments through the Stripe payment processing platform, which is used by many companies around the world. Stripe provides a free service for accepting the first 100 thousand dollars as a bonus.

Consultant Network: Stripe Atlas offers access to a network of consultants and resources to help you grow your business. 

Bonuses: Stripe Atlas users receive bonuses in the form of free or discounted services from Stripe partners such as Amazon Web Services and WeWork. For example, immediately after registration, startups receive 10 thousand bonus dollars to use Amazon Web Services cloud services.

Clerky is a legal startup that helps companies automate the process of managing their legal and corporate documents. The company offers various tools and services that make it easier for companies to comply with legal requirements and manage their legal documents. Some advantages of using Clerky include:

Simplicity: The Clerky platform is designed to be simple and easy to use. Clerky will be able to use even your most inexperienced June in legal matters. 

Price: the platform provides relatively low prices on the market. Registration of a company costs $ 99, not including state fees and other expenses (total about $ 400) and $ 299 for the development of additional documents (issue of shares, etc.). 

With you to the end: Clerky provides assistance with paperwork from the beginning of the startup's life in the USA and almost to the very end. In addition to registration, Clerky helps companies comply with legal requirements by providing access to up-to-date legal forms and documents, as well as alerting companies to any changes that may affect their compliance.

Firstbase is a startup that helps founders and entrepreneurs launch, manage and grow businesses online. The package of registration services includes: 

• The opportunity to register a company in Delaware, Wyoming, Texas, New York, California, Colorado and North Carolina
• All state duties
• The possibility of expedited opening of a bank account (without a taxpayer number)
• Expedited receipt of the taxpayer's number
• All necessary primary internal documents (including the issue of shares)
• Bonuses with a value of 250 thousand dollars. Of course, not all bonuses may be necessary specifically for your company, but, for example, bonuses such as 5 thousand dollars for Amazon Web Services will be needed by everyone.

Then what are lawyers for?

It is assumed that with the development of artificial intelligence, in a few decades, most of the professions that exist today will disappear. Among them may be the legal profession. If today it is possible to register a company for $ 500 using registrar sites, then it will be difficult for founders why they need to involve lawyers or other consultants in this process.

In fact, consultants have already stopped offering services for the initial registration of companies and making money on it, when it can be transferred to registrar sites. They will do it quickly and accurately. But, it is worth noting that such sites provide such tariffs, mainly due to the standardization of processes. That is, if you are registering your first legal entity or subsidiary in the USA, then such sites will suit you perfectly.

Startups that already have a legal entity in their country, have a number of investors with different investment documents (SAFE, Convertible Note, KISS, Preferred stocks) and want to structure a parent company in the United States, the situation may be slightly different. The individual needs of your startup may make registrar sites unsuitable for your needs. It is in such situations (and better in any situation) that you need to contact experienced legal and other consultants.

I hope this article will help you better understand the process of registering a company in Delaware and make the right decision for your startup. Good luck in your endeavors!

This material was prepared within the framework of the Project "Stimulating productive Innovations" with the support of the International Bank for Reconstruction and Development and the Ministry of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan.