6 Reasons Why Businesses and Individuals Should Move to Delaware

For buyers and businesses, Delaware has serious curb appeal.

When Carol Ann Pala tells out-of-state clients that the taxes on a Delaware beach property are around $1,200, their eyes widen. “That’s not bad,” they’ll reply in surprise to Pala, a global reach Ocean Atlantic Sotheby’s International Realty real estate agent.

So, imagine their delight when they learn Pala is referring to an annual payment. “They think you’re lying,” she says. And no wonder: Many paid more than $10,000 in annual taxes in their former state. Some buyers have saved $4,000 to $5,000 a year after relocating, notes Theresa Ferenbach, an agent with Crown Homes Real Estate.

Low taxes and an affordable cost of living are kind to many newcomers’ wallets. However, there are other economic advantages to living or doing business in the state, known as the nation’s “corporate capital.”

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Here are six reasons why moving to Delaware is a savvy investment.

The business climate

CNBC’s America’s Top States for Business survey ranks Delaware among the business-friendliest states. Credit Delaware’s General Incorporation Law, which passed in 1899.

The law closely mirrored the New Jersey act making it easier to incorporate in the Garden State. However, it wasn’t until New Jersey enacted antitrust legislation in the early 1900s that Delaware eclipsed its neighbor. Today, more than 1 million companies, including 63% of the Fortune 500, are incorporated here, according to the state’s website.

Wilmington–based Corporation Service Company, or CSC, has played a part in the growth. It was founded by savvy attorneys Christopher Ward and Josiah Marvel, who helped write Delaware’s law to simplify corporations’ formation. CSC has expanded its services and now has offices in 140 jurisdictions in the U.S. and abroad.

Businesses also appreciate Delaware’s Court of Chancery, established in 1792 as a court of equity. In short order, the court amassed a significant body of case law. “Delaware’s judiciary is second to none when it comes to resolving complex business disputes efficiently and fairly,” says Scott Malfitano, vice president of CSC and chair of the Delaware Workforce Development Board. “This remains a significant factor in drawing new business to the state.”

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CNBC’s America’s Top States for Business Survey ranks the First State among the business-friendliest states. More than 1 million companies are incorporated here, including 63% of the Fortune 500 and Wilmington’s Corporation Service Company (above).
CNBC’s America’s Top States for Business Survey ranks the First State among the business-friendliest states. More than 1 million companies are incorporated here, including 63% of the Fortune 500 and Wilmington’s Corporation Service Company (above). Photo by Jacob Owens.

Tax incentives

Delaware has no state or local sales tax for businesses—there is a gross receipts tax—and no sales tax for consumers.

The business opportunities

Many of Pala’s clients purchase a beach home for retirement. But, as it turns out, many aren’t ready for the porch rocking chair. Retirement “drives them crazy,” she says. “Within six months, they’ve started something else.”

One couple, for instance, decided to buy a restaurant. Another wants to build a performance venue, and a third seeks a location for a medical spa. “They’re adding to the economy,” she says.

No matter the service or offering, the entrepreneurs benefit from Delaware’s low cost of doing business and the complementary services. CSC, for one, remains in Delaware partly due to the “best-in-class legal resources,” Malfitano says. “It’s a compelling foundation to grow our international business.”

The downtowns

Delaware has more than 10 Downtown Development Districts seeking to stimulate private investment within a certain radius. Wilmington, Dover, Delaware City and Milford are among the cities in the program.

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“We encourage the DDD area because it’s the biggest bang for the buck in terms of tax incentives,” explains Sara Bluhm, Milford’s economic development and community engagement administrator. Small businesses such as a print shop and fitness studio have leveraged the perks. To draw larger companies, the city is building a new corporate park.

In Wilmington, CSC purchased the Pennsylvania Railroad Station in 2020 to create CSC Station next to the train station.

In many downtown areas, real estate investors can also benefit, Bluhm notes. Tax incentives exist for investors who want to buy and renovate older homes.

The value

In eastern Sussex County, Ferenbach has had clients from Florida who purchase a beach home for the equity, which is bound to increase over time. “Florida’s numbers are going down, down, down,” she says.

She’s also seen an increase in New Yorkers at open houses in Middletown, a hotbed for new construction. City dwellers tired of living on top of each other appreciate that they can afford a spacious, new single-family home on a nice-sized parcel.

“If you want to visit Mom and Dad, who still live in New York City, it’s just a few hours away,” she says.

The location

Thomas Jefferson called Delaware the Diamond State because of its advantageous location on the Eastern Seaboard. That’s still the case. Residents can be in Washington, D.C., Baltimore and New York in a few hours.

“Since the pandemic, there has been a bit of a mass exodus from the New York and New Jersey area, especially since it is a reasonable train commute to New York,” says Kat Pigliacampi, an agent in Patterson–Schwartz’s Greenville office.

Proximity is a plus even within the state. It’s a short drive from northern New Castle County to the beaches, and within Delaware’s 1,954 square miles, there are multiple options. “Delaware offers affordable housing in diverse settings—from city to countryside, suburbia and small town, plus beaches,” notes Susan Coulby, senior communications manager for the Delaware Prosperity Partnership. The nonprofit public-private organization leads Delaware’s economic development.

Although varied, these communities are close enough to give Delawareans one to two degrees of separation, a characteristic that Gov. John Carney calls “a state of neighbors,” Coulby says.

The tight network benefits residents who want to get involved and business owners seeking referrals and new business. Working together to improve the state is a characteristic of the communities and the legislature. It does not take long for newcomers to become acquainted with the “Delaware way.”

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