Ask where to form a US LLC and someone will say Delaware. It is the most repeated advice in the space and, for a founder abroad running a software or service business, usually the most expensive way to get the same outcome.
Three states account for nearly every non-resident formation we handle. They differ on three things that matter: what you pay every year, how much paperwork you file, and whether your name appears in a public record.
The numbers, side by side
| Wyoming | New Mexico | Delaware | |
|---|---|---|---|
| Filing fee | ~$100 | ~$50 | ~$90 |
| Annual state cost | ~$60 minimum | None | $300 franchise tax |
| Annual report required | Yes | No | No report, tax only |
| Members named publicly | No | No | No |
| Registered agent | Required | Required | Required |
Registered agent service runs $50 to $150 a year everywhere, so it does not separate them.
New Mexico: the cheapest to keep
New Mexico is the only one of the three with no annual report and no annual state fee. You file once, pay your agent each year, and that is the entire recurring obligation to the state.
It suits a solo founder with a simple online business — freelancers, small SaaS, agencies, e-commerce — who wants the lowest possible standing cost and the fewest deadlines to miss.
The trade-off is unfamiliarity. Some banks and processors see Wyoming and Delaware constantly and New Mexico rarely. It has never blocked an onboarding for us, but it occasionally draws an extra question.
Wyoming: the balanced default
Wyoming has a real annual report with a minimum fee around $60, calculated on assets located in Wyoming — which for a typical online business means the minimum.
It suits most founders. It is well recognised by banks and processors, cheap to maintain, and has a long-standing reputation for straightforward LLC law. If you want one answer without thinking about it further, this is the one we most often use.
The trade-off is the annual report itself — a deadline you must not forget. Miss it repeatedly and the state administratively dissolves the company.
Delaware: right for a specific case
Delaware charges a flat $300 annual franchise tax on LLCs regardless of revenue. A company earning nothing pays $300. It is the most expensive of the three to keep alive, by a wide margin.
What you get for it is genuine, just narrow: the Court of Chancery, a deep body of case law, and the fact that US venture investors expect it. If you are raising an institutional round, your investors' lawyers will want Delaware — and for a priced round they will want a C-corporation, not an LLC.
It suits founders planning to raise from US investors, or who expect complex multi-party ownership.
It does not suit a solo founder selling software or services. You are paying $300 a year for a legal infrastructure you will never invoke.
Two things that are not true
"Wyoming means no US tax"
The state does not determine your federal tax position. Whether you owe US income tax turns on whether your income is effectively connected to a US trade or business — where the work is done, and whether you have people or premises in the United States. Forming in a state with no state income tax changes your state exposure, not your federal one. The full picture is in do non-resident LLC owners owe US tax.
"Anonymous LLC means nobody knows who owns it"
None of these states publish member names in the formation filing, which is what "anonymous" refers to. Your bank knows exactly who you are, your payment processor knows, and beneficial ownership reporting obligations exist independently of the state register. It is privacy from casual public search, not from institutions.
The question that overrides all of this
If your business has a physical presence in a particular US state — an office, staff, inventory in a warehouse — you will likely need to register as a foreign LLC in that state as well, on top of your formation state. That means two sets of fees and two sets of filings.
In that situation, forming directly in the state where you actually operate is usually simpler and cheaper than forming in Wyoming and then qualifying into it.
For a purely online business with no US premises, staff or stored goods, this does not arise, and the comparison above stands.
How to decide in one minute
- Raising from US investors? Delaware — and take advice on whether you want a C-corp instead.
- Physical presence in a US state? Form in that state.
- Absolute minimum annual cost, simple online business? New Mexico.
- Anything else? Wyoming.
If you pick wrong
It is not permanent. Most states allow domestication, moving an existing LLC to a new state while keeping its EIN and bank relationships. It costs filing fees and some paperwork, but it is far from starting over — so choose sensibly and move on rather than agonising.
Whichever state you choose, the steps after it are the same: see how to open a US LLC from abroad, or let us handle the filing.