Starting a Business: Where to Incorporate
I say where you live is best. The students of the University of Illinois College of Law agree.
They published Home Is Where the Most Economically Beneficial Laws Are: Finding the Best Location to Incorporate Your Business on their blog, The Illinois Business Journal.
For the majority of small businesses, incorporation in one's home state is often the easiest and least expensive option. This is because most states have laws that require entrepreneurs to re-register a Delaware company in the state where it is actually doing business, and unfortunately, re-registration involves more than a few hours of paper work. Not only will the new business be subject to all the same taxes and fees as an in-state company, but there is also the added expense of registering as a "foreign corporation" in the home state and any annual fees in both states. (Footnotes omitted)
