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Looking to start a business in Delaware? You're joining 98,356 small businesses that employ 205,354 workers—nearly half of Delaware's workforce.
Delaware's got a reputation as the corporate capital of the world, yet ranks 43rd in business friendliness with small businesses facing 95,976 regulatory restrictions—more per capita than any other state. Let's cut through the complexity and show you exactly how to launch your Delaware business in 2025.
7 Steps to Starting a Business in Delaware
1. Choose Your Business Structure
2. File Your Formation Documents
3. Get Your Federal EIN
4. Register for Delaware Taxes
5. Obtain Business Licenses
6. Open Business Banking
7. Secure Business Insurance
1. Choose Your Business Structure
Your business structure in Delaware determines taxes, liability protection, and ongoing costs. LLCs cost $110 to form plus $300 annual franchise tax, while sole proprietorships have no state filing fees but leave you personally liable.
Sole Proprietorship: No filing fees, but you're personally liable for business debts
LLC: $110 minimum state filing fee plus $300 annual franchise tax—protects personal assets
Corporation: Higher complexity but needed for outside investors
Partnership: For multiple owners without LLC formality
2. File Your Formation Documents
Filing your Certificate of Formation with Delaware Division of Corporations costs $110 for LLCs. Online filing processes in 3-5 business days, mail takes 7-10 days.
Certificate of Formation: Basic LLC document with member names and registered agent
Registered Agent: $109 annually after first year if hiring a service
Operating Agreement: Not filed with state but legally recommended
Corporate bylaws: Required for corporations, optional for LLCs
3. Get Your Federal EIN
Your EIN is free from IRS.gov, though services charge $99 for domestic customers. You'll need this before opening bank accounts or hiring employees.
Federal EIN: Apply free at IRS.gov or pay for expedited service
Processing time: Immediate online, 4 weeks by mail
Required for: Bank accounts, employees, tax filings
One per business: Can't transfer between entities
4. Register for Delaware Taxes
Delaware's gross receipts tax hits all businesses at 0.0995%-0.1995% of total revenue. Register through the Division of Revenue before making your first sale.
Gross Receipts Tax License: Required for all Delaware businesses
Withholding registration: If you'll have employees
Corporate income tax: 8.7% flat rate for corporations
No sales tax: Delaware has none, saving compliance costs
5. Obtain Business Licenses
Your Delaware business license costs $75 annually per location. Cities like Wilmington, Dover, and Newark require additional permits.
State business license: $75 annually or $225 for three years
Local permits: Check with New Castle, Kent, or Sussex County requirements
Professional licenses: Required for contractors, healthcare, real estate
Home business permits: May need zoning approval in residential areas
6. Open Business Banking
Separate business banking protects your LLC liability shield. Most Delaware banks require your EIN and formation documents to open accounts.
Business checking: Most banks require EIN and formation documents
Business credit card: Build credit history separate from personal
Merchant services: For accepting payments if retail or service business
Online banking: Essential for managing cash flow and gross receipts tax
7. Secure Business Insurance
Delaware doesn't mandate general liability, but workers' comp becomes required with your first employee. Professional services need liability coverage.
General liability: Protects against customer injuries and property damage
Professional liability: For service businesses and consultants
Workers' compensation: Required with first employee
Commercial auto: If using vehicles for business
How to Get a Business License in Delaware?
Your Delaware business license costs $75 annually through the Division of Revenue, and you'll need one for each physical location. Most businesses complete the online application in 15-20 minutes and receive approval within 5-7 business days.
What Are the Best Cities to Start a Small Business in Delaware?
The best Delaware cities for small businesses are Wilmington (15,664 businesses in New Castle County), Dover (state capital advantages), Newark (University of Delaware market), and beach towns like Rehoboth ($4 billion tourism industry). Each city offers different cost structures and customer bases.
Wilmington: Highest business density, train access to Philadelphia and NYC
Dover: Government contracts, 30-40% lower rents than Wilmington
Newark: 24,000 university students create built-in customer base
Middletown: Fastest-growing area in southern New Castle County
Pro-tip: Visit your target city during different times to assess actual foot traffic and competition before signing any leases.
How Much Money Do You Need to Start Your Business in Delaware?
Starting a business in Delaware requires $110 in formation fees plus $300 annual franchise tax minimum, but realistic budgets range $3,000-$10,000. The gross receipts tax of 0.0995%-0.1995% applies to revenue regardless of profit, demanding extra cash reserves.
What Are Your Required Delaware Business Filing Fees and Processing Times?
Your required Delaware filing fees total $110 for LLC formation, processed in 3-5 business days online. The $300 annual franchise tax due June 1st catches many owners unprepared—late payment triggers $200 penalty plus 1.5% monthly interest.
- LLC Formation: $110 state fee, 3-5 days processing
- Registered Agent: $109 annually after first year if hiring service
- Business License: $75 per location annually
- Expedited Processing: Additional $100 for 24-hour turnaround
What Hidden Costs Should You Budget for Your Delaware Business?
Hidden Delaware costs include the gross receipts tax on all revenue, registered agent fees of $109 yearly, and local permits varying $75-$500 by city. These ongoing expenses surprise owners who budget only for initial filing fees.
- Gross Receipts Tax: 0.0995%-1.92% depending on business type
- City Licenses: Wilmington, Dover, Newark each have separate requirements
- Professional Licenses: $100-$500 for regulated industries
- Annual Report: Required to maintain good standing
What Are the Real Startup Costs Beyond Filing Fees in Delaware?
Real Delaware startup costs reach $5,000-$15,000 including equipment, marketing, and working capital. Small business failures often stem from undercapitalization, not lack of customers—budget for 3-6 months operating expenses.
- Working Capital: 3-6 months expenses as buffer
- Equipment/Inventory: Often largest upfront investment
- Professional Services: $500-$1,500 for accountant and attorney
- Marketing: $500-$2,000 for website and initial advertising
Your next move: Calculate three budget scenarios—minimum, realistic, and ideal—then fund for realistic while planning to reach ideal within year one.
What Support Resources Can You Access for Your Delaware Business?
Your Delaware support resources include free SBDC counseling at University of Delaware, Delaware State, and Delaware Technical campuses, $60.9 million in SSBCI funding, and county-specific business managers.
The state ranks first in venture capital spending per capita, offering unique funding access.
SBDC Centers: Free one-on-one business counseling statewide
SSBCI Programs: Four programs offering loans and equity up to $5 million
EDGE Grants: Expansion funding for growing businesses
Regional Managers: Direct assistance in each county plus Wilmingto
n
Your next move: Schedule your free SBDC consultation before filing anything—they'll identify specific programs and resources for your business type.
What's Your 30-Day Action Plan to Start Your Delaware Business?
Your 30-day Delaware launch plan includes choosing your structure and name in week 1, filing formation documents and tax registrations in week 2, securing licenses and insurance in week 3, and setting up operations in week 4.
This timeline gets you operational while maintaining full compliance.
Week 1: Research competition using SizeUp Delaware, choose structure, reserve business name
Week 2: File Certificate of Formation ($110), get federal EIN, register for Delaware taxes
Week 3: Apply for state business license ($75), obtain local permits, secure insurance quotes
Week 4: Open business bank account, set up accounting for gross receipts tax, create Google Business profile
Pro tip: Block these 30 days on your calendar now—squeezing startup tasks around your regular schedule typically stretches launch to 90+ days.
What's Your Bottom Line for Delaware Business Success?
Delaware small business success means navigating the state's highest-in-nation regulatory restrictions and controversial gross receipts tax while leveraging no sales tax advantages and $60.9 million in state funding programs.
With 98.5% of Delaware businesses classified as small yet the state ranking 43rd in business friendliness, success requires understanding these complexities upfront, budgeting beyond the $110 filing fee for ongoing costs like the $300 annual franchise tax, and actively using support resources through SBDC counseling and regional business managers.
Your Next Move: Download Delaware's business checklist from the Division of Small Business website and schedule your free SBDC consultation to create a customized roadmap for your specific business type and location.
