Delaware and Wyoming are the two states most often recommended to non-resident founders. Both let you form an LLC remotely, neither charges a state income tax on an LLC with no operations in the state, and both are well understood by banks and payment platforms. The differences come down to cost, reputation and your future plans.
Side-by-side comparison
| Factor | Delaware | Wyoming |
|---|---|---|
| Formation filing | Certificate of Formation | Articles of Organization |
| Typical state filing fee | About $110 | About $100 |
| Ongoing state cost | $300 annual LLC tax, due June 1 | Annual report with a minimum license tax of about $60 |
| Registered agent | Required | Required |
| Legal system | Court of Chancery, deep case law | Business-friendly statutes, less case law |
| Investor familiarity | Very high | Moderate |
| Best for | Startups, future fundraising, holding companies | Lean consulting, e-commerce and service businesses |
Fees change regularly, so confirm current amounts with each state before filing.
When Delaware makes sense
Delaware is the default for companies that may raise money. US venture investors and their lawyers know Delaware law, and many will only invest in a Delaware corporation. If you may convert to a C-corporation later, forming in Delaware from the start avoids a re-domestication. Delaware also has well-developed case law, which gives more predictability in disputes. The trade-off is the higher yearly cost.
When Wyoming makes sense
Wyoming suits founders who want the lowest ongoing cost and no immediate plans to raise outside capital. It has no state corporate or personal income tax, and its annual fees are among the lowest in the country. For a solo consultant, software seller or e-commerce operator, it is often the more economical option.
The factor most people overlook: where you actually operate
Forming in a "tax-friendly" state does not exempt you from the rules of the states where you do business. If you or an employee work in, hold inventory in, or have a physical presence in another state, you generally need to register there as a foreign LLC and may owe that state's taxes and fees. Online sellers may also have sales tax obligations in states where they cross economic thresholds. A Delaware or Wyoming LLC with no real presence in either state keeps things simple; one with a US office does not.
What does not differ
- Federal tax treatment. A single-member LLC owned by a non-US person is the same federally whichever state you pick.
- Form 5472 and pro forma Form 1120. Required in both cases when there are reportable transactions. See our Form 5472 guide.
- EIN process. Identical. See how to get an EIN without an SSN.
Quick decision guide
- Planning to raise venture capital or convert to a C-corp: Delaware
- Solo or small team, bootstrapped, minimising annual cost: Wyoming
- US-based team, office or inventory in a particular state: that state, possibly plus Delaware
- Unsure: speak to an adviser before filing, because changing state later costs time and money
We help founders choose and set up the right structure through our US company formation service.
Frequently asked questions
Is Delaware or Wyoming cheaper for a non-resident LLC?
Wyoming is usually cheaper each year, with a minimum annual license tax of around $60 compared with Delaware's $300 annual LLC tax. Initial filing fees are similar.
Do I pay US tax in Delaware or Wyoming if I live abroad?
Neither state taxes an LLC that has no operations or presence there, but you may owe federal tax or file federal forms depending on your income, and other states may apply if you operate in them.
Can I move my LLC from Wyoming to Delaware later?
Yes, through a conversion or domestication, but it involves new filings and fees, so it is better to choose with your future plans in mind.
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