Why SaaS founders pick Wyoming over Delaware
Delaware gets pushed hard by Stripe Atlas and Y Combinator. But Delaware only makes sense if you plan to raise VC money or stack-rank for a Series A. For most bootstrapped SaaS founders, Delaware costs about $300 a year extra in franchise tax and forces you to file in two states. Wyoming has no franchise tax, lower annual fees, and the same legal protections.
In our research across roughly 800 client intakes, less than 5% of non-resident SaaS founders actually needed Delaware. The other 95% would pay Delaware $1,500 over 5 years for zero benefit. Wyoming saves that money and runs the same Stripe and Mercury stack.
So unless your investor is already wiring you a SAFE check tomorrow, pick Wyoming and move on.
- Wyoming has no state income tax. Delaware has 8.7% corporate income tax (only triggered if you have Delaware nexus, but the franchise minimum still hits).
- Wyoming annual cost is roughly $160 (annual report $60 + registered agent ~$100). Delaware is roughly $400.
- Wyoming members and managers do not appear on public filings. Delaware lists managers.
- Wyoming charging-order protection under Section 17-29-503 is the strongest in the US for single-member LLCs.
- Stripe US accepts a Wyoming LLC + EIN at the same approval rate as a Delaware C-Corp.
The complete SaaS stack you should set up after formation
Most SaaS founders we onboard need the same 6 pieces in place inside 4 weeks. The Wyoming LLC is just the entity layer. The rest of the stack is what actually makes you operational.
- Wyoming LLC formed under Title 17, Chapter 29 ($397, 24 hours)
- EIN from the IRS via Form SS-4 by fax (8 to 10 business days, no SSN required)
- Mercury or Relay business bank account (you should have a backup at Wise Business)
- Stripe US for subscriptions and one-time charges (instant approval typical with the LLC+EIN+US bank stack)
- QuickBooks or Wave for accounting (Wave is free for solos)
- Form 5472 + pro forma 1120 filing every year, with the April 15 deadline (we file this for $99 per year)
How US tax actually works on your MRR
Most non-resident SaaS founders owe $0 US federal income tax on their MRR. Here is why. A foreign-owned single-member Wyoming LLC is a pass-through entity by default under Treas. Reg. 301.7701-3. So the LLC itself does not pay US tax. You as the owner only owe US tax on Effectively Connected Income from a US trade or business under IRC Section 864.
Selling SaaS to US customers from your laptop in Mumbai, Lagos, or Lisbon is not a US trade or business. You have no US employees, no US office, no US warehouse. So your MRR is not Effectively Connected Income. US federal income tax owed is zero.
But you still have to file. Form 5472 + a pro forma 1120 is mandatory every year regardless of tax owed. Missing it costs $25,000 per failure under IRC Section 6038A. That is the single biggest mistake SaaS founders make.
Banking notes for SaaS founders: Mercury, Relay, or Wise
Mercury is the default primary bank for SaaS. It supports Stripe payouts natively, has an API for automation, and runs Treasury yield on idle balances (FDIC up to $5M via partner banks). Approval rate for non-resident SaaS profiles sits at roughly 75% in our intake.
Relay is the better choice if you want sub-accounts. Profit First budgeting with separate buckets for tax, payroll, and owner draw works cleanly. Up to 20 sub-accounts under one LLC. Non-resident approval sits at roughly 50%.
Wise Business is your safety net. Approval rate is roughly 95% across all country profiles. So if Mercury and Relay both reject, Wise opens the door. You also get cleaner multi-currency holding (EUR, GBP, AUD) if your SaaS bills in multiple currencies.
| Feature | Mercury | Relay | Wise Business |
|---|---|---|---|
| Non-resident approval | ~75% | ~50% | ~95% |
| Stripe integration | Native | Native | Via US routing |
| Sub-accounts | Up to 10 | Up to 20 | No |
| Treasury yield | Yes (T-bills) | No | No |
| FDIC coverage | Up to $5M via partners | Yes via partner | Custodial only |
| Monthly fee | $0 | $0 | $0 ($31 setup) |
Common SaaS founder mistakes with their Wyoming LLC
- Skipping Form 5472 because no US tax is owed. The form is still mandatory. The penalty is $25,000 per failure.
- Using the personal bank account for SaaS revenue before Mercury approves. This weakens your liability protection if anything goes to court later.
- Submitting a vague business description to Mercury. 'I run an online business' gets rejected. 'I run a Shopify subscription tool for US e-commerce stores, with $15K MRR through Stripe US' gets approved.
- Picking Delaware on a YouTube influencer's advice without checking if you actually need VC-track structure. Most do not.
- Forgetting the Wyoming annual report. Missing it leads to administrative dissolution in 12 to 18 months.
- Not filing W-8BEN-E with US payers. Default 30% withholding hits any US-source income that does not go through Stripe (think Patreon-style or YouTube ads if you also have content channels).
- Trying to add a co-founder as a member after formation without amending the operating agreement properly. Always document new members through a member admission addendum.
What WyomingLLC.xyz includes for SaaS founders at $397
- Wyoming LLC formation filed within 24 hours under Title 17, Chapter 29
- Wyoming registered agent for year 1 (Section 17-28-101 requirement satisfied)
- Custom operating agreement tuned for single-member or multi-member SaaS, with Wyoming charging-order language under Section 17-29-503
- IRS Form SS-4 filing for your EIN by fax to the IRS international unit (no SSN required)
- Direct introductions to Mercury, Relay, and Wise Business with SaaS-specific prep coaching
- Document delivery as searchable PDFs (Articles, operating agreement, CP575 EIN letter)
- WhatsApp and email support across NYC and Dhaka time zones
- Form W-8BEN-E guidance for Stripe and other US payer tax filings