I’ve been asked this question a lot over the years especially by folks building remote-first businesses. And honestly, I’ve asked it myself more times than I can count. Where should you actually set up your company? Does it matter? Short answer: yes. Longer answer: it depends, but there are some patterns that keep coming up, and I’ll share what’s worked for me (and what hasn’t). The Mistakes I Made Early On When I started my first company, I didn’t think much about incorporation. I just picked whatever state my lawyer told me, paid the fees, and moved on. That came back to bite me later when I started working with contractors in other countries and dealing with state-by-state tax quirks. It was a mess. So after spending way too much money (think low six figures over a few years) on legal consultations, I started digging into which states make sense for remote companies, especially ones that plan to grow without a physical HQ. Why I Keep Coming Back to Delaware I'm not the only one who says this. Founders, investors, and even lawyers seem to agree: Delaware is solid. Here’s what I’ve seen in practice. 1. Tax Simplicity If your company earns money outside of Delaware (which it probably will), you won’t be taxed on that income at the state level. That’s a big deal when you're remote and your clients or users are everywhere. It just cuts down on the noise. 2. The Legal System Doesn’t Waste Time Delaware has a special court just for business matters. No juries. No drawn-out trials. Judges who actually understand corporate structures make the calls. In one case I dealt with (minor internal IP issue), we were able to get clarity in weeks instead of months. That would’ve dragged out forever in another state. 3. No Surprise Fees Compared to other states, Delaware is transparent. You know what your annual costs are going to be. I’ve dealt with states where hidden fees pop up a year later and throw your books off. Delaware’s system is boring. And that’s a compliment. Real Talk: You’ll Still Hit Legal Snags It doesn’t matter how clean your docs are or how well you structure things. Stuff will happen. I’ve had to deal with employee agreements gone wrong, grey areas with contractors, and people challenging IP ownership. In one case, a cofounder left unexpectedly and tried to claim partial rights to something they hadn’t touched in months. Because we were registered in Delaware, the process for resolving it was surprisingly quick. Other states? I’ve seen similar cases cost founders tens of thousands just to get a basic answer. Quick Example From A Project I Helped Build A while back, I worked on a developer tool that started as a quick CLI project. It got some traction internally, then externally, and now it’s part of a toolkit we use called TDZ Pro. It helps with automated deployments. Not flashy, but useful. We didn’t even consider incorporating it outside of Delaware. It gave us clean separation from the rest of our operations, and that simplicity saved us time later when we dealt with licensing and compliance abroad. Should You Avoid California? Unless you absolutely need to be there, maybe for an accelerator or team reasons, I’d stay away. High fees. Heavy regulation. Unpredictable tax enforcement. A bunch of well-known startups have moved out. You can look that up yourself. I’m not here to bash California, but for a remote-first software business, it’s not ideal. Final Word If you’re still deciding where to incorporate, start by asking what kind of problems you’re most likely to face. For me, those were remote team logistics, global customers, and needing fast legal clarity when something went sideways. Delaware has held up. It’s not perfect, but it’s consistent, and that goes a long way when you're already dealing with startup chaos. Been through this yourself? I’d love to hear what worked for you. Share in the comments. Been through this yourself? I’d love to hear what worked for you. Share in the comments.

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

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