Best location for corporation setup with no physical location?

WY is definitely a great choice to incorporate in as long as you do not establish nexus in CA. Mr. Turmell is correct regarding the 1099 and if you do have a shareholder or owner that is also a W2 employee in CA you are forced to file with CA, drowning you in the franchise taxes. CA is very tight with the IRS and even stating you're incorporated in WY but you then claim home office write-offs for this entity in CA, you may be indirectly establishing nexus in CA. This is very common. Also, you would need to setup a WY bank account. I am not a CPA and this is a very good question to ask yours.

You may also find that your registered agent that is required in WY and any other State (including CA), can assist with setting up a possible Virtual office, mail forwarding, phone and fax forwarding with a local WY area code to fully firm up the fact that you are a WY Domestic entity. I did not choose WY for other reasons but my registered agent ( Incorp Services, Inc., www.incorp.com ) assisted me all the info and filed everything I needed to get my business going. Since then, I have expanded and did foreign file into other States and so far, they have done all the work and their cost was rather low compared to some other agents I spoke with.

Again, if you do eventually claim an office, a W2, or anything tying you to CA or any other State, you will be registering with those States as well.

Hope that helped.

I suspect that you will, in fact, be conducting business in all of the locations and, thus, will have to file in each jurisdiction (though I will restrict my discussion to the U.S. locations, because I am not familiar with Canadian law).

You should form the corporation in one of the states where a founder is located. Please see Why (not) incorporate in Delaware? and Why (not) form an LLC in Nevada?

You should seek the services of a tax advisor who is familiar with multi-state corporate issues right away.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Personally, I like Wyoming. The extra fees that Nevada piles on for "business licenses" (aka "tax") are ridiculous. I used to have a bunch of companies in Nevada, but now have them all in Wyoming for what it used to cost me just for one in Nevada.

Wyoming is inexpensive, safe, and gets the job done. I use a site called FreeRegisteredAgent.com that sets up the entire thing in Wyoming for $124 - which INCLUDES THE STATE FEES AND THE FIRST YEAR OF REGISTERED AGENT SERVICE! The company I was using before was charging me more than that just for the registered agent service alone. There are of course about a million other companies that can set this up for you, but I have had very good experiences with this company.

If you are going to be doing $ distributions to your shareholders/members, then they are going to have tax events to consider. I believe that if you're just doing one-off distributions to the California member which would be most common in a start-up, that this would just be 1099 income, but you're talking about salaries. If your company has a salaried employee in California, they will probably have to foreign-qualify there. Since you're a startup though, I wouldn't imagine that you would be starting people on actual salaries for a while though. As always, it is probably best to consult with a knowledgable CPA.

Good luck in your venture! It is awesome to read about entreprenuers doing their thing!