State leaders must address attack on Delaware’s primacy as the domicile of choice
According to recent press reports, our State of Delaware is under economic and legal assault that could jeopardize Delaware’s primacy as the “Domicile of Choice” for business incorporation.
Chomping at the bit to usurp Delaware are those states who lust after the revenue that we Delawareans enjoy in exporting our tax burden, as well as the Federalists who want Incorporation to be governed by National Law.
Our hope is that the Governor and State leaders would convene a Strategic Summit on the Delaware Business Advantage to examine Delaware’s vulnerability for erosion on these issues and develop longer-term strategies that will serve Delaware well for the next generation.
Such a forum would bring to the table the players whose businesses and jobs support the Delaware incorporation industry, as well as the ancillary industries that make Delaware a “Domicile of Choice” for litigation, captive insurance, trusts, etc.
A strategic approach would assess where Delaware is now, with a SWOT analysis that examines both our risks and our opportunities, and that concludes with focused strategic problem-solving.
It would take a “Congress” of 100-250 or so Delaware leaders who meet perhaps weekly over a few months with a “˜git “˜er done’ work ethic.
Deliverable would be a comprehensive updated approach to public policy and administrative practices designed to enhance and build “the Delaware advantage.”
Not in recent decades has such an approach taken place publicly.
It was Gov. Pete du Pont who nearly 40 years ago put in place the FCDA, the Financial Center Development Act that made Delaware the “Domicile of Choice” for Credit Card Banking Portfolios.
While it has felt strategic over time, it was an intuitive response by a business-minded governor to the Crisis du Jour, 18+% Interest Rates that exceeded the legal usury caps in New York and many other states.
A Washington story by the AFP (Agence France Presse agency) placed great attention on the anonymity of Delaware “shell companies” and the potential for their misuse for criminal and other sketchy purposes. It’s a fair criticism.
Reversion to Delaware’s treasury of assets that the State claims by Escheatment, too, seems to be a growing Achilles’ heel. It doesn’t seem long ago that New York and Delaware engaged in a death struggle over the States’ mutual claims to the same escheated assets.
Frankly, Delaware’s success in exporting the revenue side of its P&L to those outside Delaware continues to create something of a PR problem for the State.
Other opportunities abound, including Sales Taxes for Internet purchases. We’ve often wondered if, as a Sales Tax-free state, is there not some advantage that could accrue to Internet-selling companies that want to domicile and sell / deliver from Delaware?
Our State is blessed to have thousands of right-minded business people and leaders who can help resource a strategic approach to Delaware’s future in a way that it heads off problems and hopefully increases our prosperity.
Convening such a Strategic Summit on the Delaware Business Advantage seems like an intuitive thing to do.
What’s your opinion?
Do you think the Governor should convene a Strategic Summit on the Delaware Business Advantage to examine Delaware’s vulnerability for erosion on these issues and develop longer-term strategies that will serve Delaware well for the next generation?
We want to know. Send us your opinions to news@DelawareBusinessTimes.com, or make a comment on the story below.