How Family Offices Use Delaware for US Assets

US assets come with US rules. A foreign family that buys US real estate, private equity, or publicly traded securities directly in personal names risks US estate tax, withholding, and unlimited liability. A Delaware entity is the standard first layer of protection.

We form Delaware LLCs and C-Corps for family offices that need a US wrapper for real estate, venture investments, and operating subsidiaries.

Why Delaware for family office assets?

Delaware corporate law is predictable. The Court of Chancery handles business disputes quickly. Filings are fast, and the state has a well-known registry. For a family office, the choice of Delaware is rarely about tax — Delaware charges franchise tax, not income tax at the state level. It is about legal certainty and US counterparty comfort.

A Delaware LLC is the default for holding US real estate and passive investments. A Delaware C-Corp is used when the family office wants to run an active US business, raise US capital, or hold shares in a US startup that will attract institutional investors.

LLC or C-Corp: which one?

For US real estate and passive portfolio investments, a Delaware LLC is simpler. It has pass-through taxation for US tax purposes if owned by a US person, but for a foreign owner it is treated as a disregarded entity or partnership unless an election is made. The LLC provides liability protection and a clear US presence.

A C-Corp is the right choice for active businesses, US employee teams, or venture-backed startups. It pays 21% federal corporate tax and can issue multiple stock classes. If the family office invests in US startups, holding those shares through a C-Corp can make the cap table cleaner for future exits.

US tax and withholding

Foreign owners of US real estate face FIRPTA withholding — generally 15% of gross proceeds on sale — and US income tax on rental income. Portfolio interest may be exempt from US withholding, and dividends are usually subject to 30% withholding unless a treaty reduces it. US-source interest and royalties have their own rules.

The bigger risk is US estate tax. Non-residents get only a $60,000 exemption on US situs assets. A US LLC interest owned directly by a foreign individual is usually considered US situs. Many family offices avoid this by placing a foreign holding company — often a BVI company — above the Delaware LLC. The shares of the foreign holding company are not US situs.

Estate planning and FIRPTA

For US real estate, a foreign corporation above a Delaware LLC is a common structure. The LLC holds the property and signs leases. The foreign parent owns the LLC. On death, the LLC membership interest is not taxed in the US because it is owned by the foreign corporation. The property itself is still subject to FIRPTA on sale, but estate tax exposure is removed.

This is not a loophole. It is a documented structure used by international investors, subject to proper disclosure under CRS and local CFC rules. We coordinate with US tax counsel before any closing.

Banking for a Delaware family office entity

A Delaware LLC or C-Corp can open accounts with Mercury, Relay, or US branches of international banks. Foreign-owned companies need an EIN, a US address, and a clear purpose. For C-Corps with venture investments, Silicon Valley Bank, First Republic alternatives, and specialized fund administrators are relevant.

If the family office owns multiple US properties, each property often sits in a separate Delaware LLC, with a parent LLC or foreign holding company above them. This isolates liability property by property.

What records does the entity need?

A Delaware LLC needs an operating agreement, a membership ledger, and a current registered agent. A C-Corp needs bylaws, stock ledgers, board minutes, and annual franchise tax filings. Foreign-owned companies also need to file Form 5472 if they have reportable transactions with related parties. Clean records make bank accounts easier to open and exits easier to close.

Cost and timeline

Delaware LLC formation: $1,500–$2,500. C-Corp formation: $2,500–$4,000. Annual franchise tax: $300 for an LLC; C-Corp franchise tax starts at $175 plus annual report fee. EIN by paper fax for foreign owners: 4–6 weeks. Bank account: 2–6 weeks.

FAQ

Can a foreign family own a Delaware LLC? Yes. Foreign ownership is allowed.

Does a Delaware LLC stop US estate tax? Not on its own. A foreign holding company above the LLC is usually required to block estate tax on US situs assets.

What is FIRPTA? The Foreign Investment in Real Property Tax Act imposes US tax withholding on dispositions of US real property interests by foreign persons.

Wyoming or Delaware for US assets? Wyoming is cheaper and more private for passive holding. Delaware is better for US investors, active businesses, and institutional counterparties.

Do I need a US bank account? Yes, for receiving rent, paying US taxes, and holding US-dollar reserves.

Internal links: company incorporation, Delaware C-Corp standard, Delaware e-commerce structure, BVI holding company, pricing