Quick decision framework
- Raising US VC: Delaware
- Default for most non-residents: Wyoming
- Pure cost minimization, accept banking risk: New Mexico
- Specific Nevada asset protection structure required: Nevada
- US permanent resident: Your home state (this guide is for non-residents)
- Real estate holding in a specific state: Consider state where property is located
Side-by-side: 5-year cost and trade-offs
| Dimension | Wyoming | Delaware | New Mexico | Nevada | Florida |
|---|---|---|---|---|---|
| Year 1 service fee (WyomingLLC Wyoming) | $297 + state fee | Not offered | Not offered | Not offered | Not offered |
| State filing fee | $100 | $90 | $50 | $425 | $125 |
| Annual report fee | $60 | $0 for LLCs | $0 (no annual report) | $350+ business license | $138.75 |
| Franchise tax | $0 | $300/year | $0 | $200 business license + tax | $0 |
| 5-year total state cost | $340 | $1,290 | $50 | $2,225+ | $680 |
| Privacy: members listed publicly | No | No | No | Partial (mgr on biz license) | Manager listed |
| Asset protection (charging order) | Strongest | Strong | Strong | Strong | Moderate |
| Banking ecosystem for non-residents | Strong | Strong | Less established | Moderate | Strong |
| VC preference | Lower | Highest | Low | Low | Low |
| Crypto/DAO statute | Yes (only state) | No | No | No | No |
| FinCEN BOI | Exempt (March 2025) | Exempt | Exempt | Exempt | Exempt |
Why Wyoming wins the default
- Best balance of cost, privacy, asset protection, and banking infrastructure.
- Wyoming brand recognition with US banks (Mercury, Relay, Wise) is excellent. Bank approval is at least as good as Delaware for non-residents.
- Strongest charging-order caselaw, especially for single-member LLCs (per Wyoming Statutes Section 17-29-503).
- No state income tax, no franchise tax, no business license fee. Wyoming is the lowest-friction recurring cost in the US.
- Crypto and Web3 founders get the only US state with a DAO LLC statute (Title 17, Chapter 31) plus Special Purpose Depository Institutions (Title 13, Chapter 12) for digital asset banking.
- Privacy is structural: Wyoming SoS does not collect or publish member or manager information.
- 5-year cost approximately $1,037 total including formation, RA renewals, annual reports, and basic compliance. About $950 less than Delaware over 5 years.
- 24-hour formation timeline through WyomingLLC. Faster than most state-specialist services.
When Delaware wins
- You are raising US venture capital now or within 12 months
- Your investors insist on Delaware structures (most US VCs do)
- You will eventually convert to a Delaware C-Corp for institutional fundraising or IPO
- You need Court of Chancery (specialized business court for complex commercial disputes)
- You operate in regulated industries with sophisticated capital structures (fintech, insurtech)
- You have multi-class membership structures (preferred units, profit interests)
- Your acquirer is likely to be a US public company (Delaware-incorporated buyers prefer Delaware-domiciled targets)
When New Mexico wins
- You want absolute minimum recurring state cost ($0 annual report)
- You do not need US banking (or have an alternative banking path)
- You are not concerned about less established commercial caselaw
- You are running a passive holding structure with minimal banking needs
- You already have a US bank account through another channel
When Nevada wins
- You have a specific Nevada-tested asset protection structure (NV attorney recommended)
- You will physically operate in Nevada (employees, office)
- You are forming a specific NV-only structure like a Nevada Series LLC for real estate
- You are leveraging Nevada's no-corporate-income-tax for in-state operations
States we recommend AGAINST for non-residents
- California: $800/year minimum franchise tax. Member and manager listed publicly. Aggressive nexus rules. Among the worst for non-residents.
- New York: $200 filing fee plus expensive publication requirement ($1,500 to $4,000 depending on county newspapers required). Members listed publicly on initial filing.
- Texas: Higher annual fees than Wyoming. Manager listed publicly. Texas franchise tax based on revenue (capped exempt threshold helps but adds complexity).
- Florida: $138.75/year annual report. Manager listed publicly. Weaker privacy than Wyoming.
- Illinois: $75 annual report plus higher initial fees. Members can be searched indirectly.
- Massachusetts: $500/year annual report. Higher than most.
- New Jersey: $75 annual report plus state income tax exposure.
- Pennsylvania: Decennial filing every 10 years and franchise tax.
Recommendation by use case
| Use case | Recommended state | Why |
|---|---|---|
| Amazon FBA seller (non-resident) | Wyoming | Lowest cost, strongest privacy. Amazon does not care about state. |
| Dropshipping with Stripe | Wyoming | Lowest cost, banking infrastructure strong. |
| SaaS founder, no VC | Wyoming | Pass-through, no franchise tax, strong privacy. |
| SaaS founder, raising VC | Delaware | VC default, Court of Chancery, conversion path. |
| Freelancer / Upwork | Wyoming | Lowest cost, simplest stack. |
| Content creator (YouTube, podcast) | Wyoming | Cost, privacy, banking. |
| Real estate holding entity | Wyoming | Charging-order protection is the strongest. |
| Crypto / Web3 / DAO | Wyoming | Only state with DAO LLC statute and SPDIs. |
| Multi-investor LLC with institutional governance | Delaware | Delaware LLC Act flexibility for preferred units, waterfalls. |
| Passive holding (no operations) | Wyoming or New Mexico | Lowest recurring cost. NM if you do not need US banking. |
| Multi-state real estate (5+ properties) | Wyoming holding + state-specific operating LLCs | Asset protection layered with operational flexibility. |
| Amazon Brand Registry (multiple brands) | Wyoming holding + brand-specific operating LLCs | Privacy + brand separation. |
Foreign qualification: when one state is not enough
If your LLC has substantial activity in a state other than its state of formation, you typically need to register as a "foreign LLC" in that other state. This is called foreign qualification.
Substantial activity that triggers foreign qualification:
- Physical office or place of business
- US employees in the state
- Substantial inventory storage (some states; not all)
- Significant property ownership
- Regular continuous in-state operations
Most non-residents do not need foreign qualification because they operate entirely from outside the US. Selling to US customers from outside the US does not by itself create foreign qualification requirements in any state.
Foreign qualification typically requires: certificate of good standing from your home state, registration filing with the target state, annual report in the target state, and a registered agent in the target state. Costs vary by state ($50 to $500/year in additional fees per state).
What if you have a US permanent resident
This guide is written for non-US residents. If you are a US citizen or permanent resident, the calculus changes:
- Form in your home state usually (cheaper, simpler, no foreign qualification needed)
- Wyoming and Delaware still have privacy advantages if you have a public-profile concern
- You pay US tax on worldwide income regardless of state of formation
- Wyoming's $60 annual report is still cheaper than most home states
- WyomingLLC at wyomingllc.xyz still works for US residents, but cheaper options exist (Northwest, direct filing)