In the corporate world, Delaware has long reigned as the go-to jurisdiction for incorporation. But times are changing fast. A growing number of companies are rethinking their reliance on Delaware, and many are exploring quieter, (dare I say) smarter jurisdictions for the next chapter of their corporate governance.
Welcome to DExit, the emerging wave of companies exiting Delaware in search of stronger asset protection, streamlined legal processes, and tax-friendly policies.
At the forefront of this shift are Wyoming and Texas.
Why is this happening?
The Catalyst: Delaware’s Court of Chancery in the Spotlight
If you’ve been following the headlines, you’ve likely seen the fallout from the Delaware Court of Chancery’s decision invalidating Elon Musk’s $56 billion compensation plan at Tesla. While the ruling may be subject to appeal, its broader impact is already rippling through boardrooms and legal departments.
The once-unquestioned prestige of Delaware is being reexamined. Critics point to a rise in judicial activism and a shift in the Chancery Court’s posture that some say feels less business-aligned and more uncertain.
The result? A clear signal to companies that it’s time to evaluate their options.
The Case for Wyoming: Silent but Strong
While it hasn’t yet become a household name for incorporations, Wyoming is quietly emerging as a serious contender. The state’s secret weapon? A Chancery Court of its own, launched in 2021 to address business disputes with speed, sophistication, and discretion.
Some key points:
Streamlined Litigation. Most cases are resolved in 150 days or less – a stark contrast to protracted litigation elsewhere.
No Public Ownership Disclosure. This offers a significant advantage to trusts, investors, and asset protection structures.
Blockchain Leadership. Perhaps surprisingly, Wyoming continues to be a national leader in crypto and blockchain regulation, which is perfect for tech-forward companies.
Tax Savings. There’s no corporate income tax and a low annual franchise tax (just $60 for businesses with under $300,000 in assets).
Even though Wyoming isn’t yet flooded with high-profile filings (Exxe Group being the most notable to make the switch), its first full-time Chancery Judge appointment in 2025 shows it’s building a robust future for complex commercial litigation.
Why Texas Is a Power Move
Texas isn’t just big in size – it’s big in economic impact, legal modernization, and pro-business policies. It’s no surprise that Tesla has already reincorporated in Texas, and Meta is reportedly exploring the same move.
Key advantages:
- Business Courts launched in 2024 with specialized judges for commercial cases.
- Regulatory predictability and strong jury pools (a must for litigators).
- No state corporate income tax and relatively low franchise tax burdens.
- Global economic presence – if Texas were its own country, it would be the 8th largest economy in the world.
For businesses looking for a sophisticated legal system without the drama, Texas checks all the boxes.
Ready for Your DExit?
If you are considering making the leap from Delaware, we can help design your DExit strategy and build a future-proof asset protection structure in a jurisdiction that truly supports your goals.
Whether it’s the discretion and speed of Wyoming or the economic strength and modernization of Texas, now is the time to reassess and reposition.
Talk to us to learn more about the potential benefits of making one of these moves.
