The short answer
For most non-resident founders: Wyoming. For startups planning to raise venture capital: Delaware. For the lowest possible ongoing cost: New Mexico.
The state you choose determines your filing fees, annual compliance costs, privacy protections, and tax obligations. It does not affect where you can do business — a Wyoming LLC can operate in all 50 states and globally.
Wyoming — the non-resident standard
Wyoming is the most popular state for foreign entrepreneurs forming US LLCs, and for good reason. It has no state income tax, strong privacy laws, low annual fees, and one of the fastest formation timelines in the country.
| Feature | Wyoming |
|---|---|
| State filing fee | $100 |
| Annual report fee | $60/year (min) |
| State income tax | None |
| Formation time | 1 business day |
| Member privacy | Strong — no public member list |
| Publication requirement | None |
Wyoming's privacy protections are among the strongest in the US. You are not required to list member names in any public filing — only your registered agent's information appears on public records. For founders who value privacy, this is a significant advantage.
Delaware — the startup and VC standard
Delaware is the incorporation capital of the United States. More than 65% of Fortune 500 companies are incorporated there, and it is the default choice for venture-backed startups. This is not because Delaware is cheap — it is not — but because investors and lawyers are universally familiar with its corporate laws.
| Feature | Delaware |
|---|---|
| State filing fee | $90 (LLC) / $89 (Corp) |
| Annual report fee | $300/year (LLC), $50+ (Corp) |
| State income tax | None on out-of-state income |
| Formation time | 1–2 business days |
| Court of Chancery | Yes — specialist business court |
| VC compatibility | Industry standard |
Delaware's Court of Chancery is a specialist business court with no jury — disputes are decided by experienced judges who understand corporate law deeply. This legal predictability is one of the primary reasons investors prefer Delaware entities.
If you are building a company that will raise venture capital, issue employee stock options, or eventually go public, Delaware C-Corp is the structure you need. For LLCs without investor requirements, Wyoming is usually more cost-effective.
New Mexico — the lowest cost option
New Mexico is the least-known of the three but has a compelling case for cost-conscious founders: it has no annual report requirement, which means no annual fee after the initial filing. Your LLC stays in good standing without any yearly renewal cost.
| Feature | New Mexico |
|---|---|
| State filing fee | $50 |
| Annual report fee | None |
| State income tax | Yes (but only on NM-source income) |
| Formation time | 1 business day |
| Member privacy | Strong — no public member disclosure |
| Annual maintenance cost | Lowest in the US |
For a non-resident with no New Mexico-source income, the state income tax is effectively irrelevant. Combined with the zero annual fee, New Mexico is the cheapest US state to maintain an LLC in over time.
Side-by-side comparison
| Feature | Wyoming | Delaware | New Mexico |
|---|---|---|---|
| Filing fee | $100 | $90 | $50 |
| Annual fee | $60/yr | $300/yr | $0 |
| Formation speed | 1 day | 1–2 days | 1 day |
| Privacy | Excellent | Good | Excellent |
| VC compatible | Moderate | Industry standard | Moderate |
| State income tax | None | None (out-of-state) | Low risk for non-residents |
| Best for | Most non-residents | VC-backed startups | Budget, holding cos |
The state does not determine where you can do business
A common misconception: your LLC's state of formation has nothing to do with where you can operate. A Wyoming LLC can have clients in California, New York, or anywhere globally. If you have significant physical operations in another state, you may need to register as a "foreign LLC" in that state — but for most non-resident founders with no physical US presence, this is not an issue.
Our recommendation
If you are a non-resident forming your first US LLC: Wyoming. Strong privacy, no state income tax, low costs, fast formation, and universally accepted by US banks and payment processors.
If you are raising VC or need investor-compatible structure: Delaware C-Corp, not an LLC.
If you are forming a holding company or want zero annual fees: New Mexico.