In a recent study, William J. Moon at the University of Maryland School of Law tackles the question of "Delaware's surprising weakness competing in the emerging international market for corporate law".  He finds that less than 5% of Chinese companies listed on U.S. stock markets are incorporated in Delaware compared to the over 50% that are incorporated in the Cayman Islands.  As someone who follows and writes about Nevada's corporate law, I was interested in his finding that "Nevada has attracted nearly three times as many Chinese firms listed in American stock markets than Delaware."

Professor Moon attributes several different factors for Delaware's poor performance in attracting Chinese issuers, including the differing requirements for "foreign private issuers" under the federal securities laws.  This, however, would not account for Nevada's dominance over Delaware.  He attributes much of Nevada's success to the higher degree of immunity to liability that it affords to directors and officers.  He posits that this may be a siren call to foreign companies that engage in self-dealing and related party transactions.

You can access Professor Moon's article here.