Short answer: for most non-resident founders, Wyoming is the default: low cost, strong privacy, no state income tax, and a $60 annual report. New Mexico wins on paperwork alone: it has no annual report for LLCs at all. Delaware is the one people ask for because they have heard the name, and for a business without institutional investors it is usually the most expensive of the three for no benefit you will use.
This is a spoke of how to form a US LLC as a non-resident.
The comparison that actually decides it
| Wyoming | New Mexico | Delaware | |
|---|---|---|---|
| Annual state filing | Annual report, $60 minimum, due in your formation month | None for LLCs | Franchise tax, $300 flat, due 1 June |
| Owner named publicly | No | No | No |
| State income tax on non-resident pass-through profit | None | None | None |
| Registered agent | Required | Required | Required |
| Reputation with banks | Well understood | Well understood, occasionally queried | Strongest name recognition |
| Sensible for | Most non-resident businesses | Minimum-maintenance holding or solo operations | Businesses raising institutional capital |
Wyoming’s annual report is technically a licence tax of $0.0002 per dollar of assets located in Wyoming, with a $60 minimum, and since a non-resident service business has essentially no assets in Wyoming, you pay the $60.
Wyoming, and why it is the default
Wyoming does not publish member or manager names, charges $60 a year, has no state income tax, and has been the standard choice for non-resident LLCs long enough that every bank and payment processor has seen thousands of them. That last point is worth more than it looks: the state on your formation certificate is one fewer thing for a compliance officer to think about.
The trade-off is nothing dramatic: an annual report to remember, and a registered agent to renew.
New Mexico, and its one real advantage
New Mexico LLCs file no annual report. Not a cheap one: none. Combined with no public member disclosure, that makes New Mexico the lowest-maintenance option on this list, and a genuinely good fit for a holding company or a one-person operation where every recurring obligation is a chance to forget something.
The caveats are modest. A minority of institutions ask an extra question about New Mexico entities, because the same privacy that attracts legitimate founders attracts everyone else too. And the state’s own online systems are less polished than Wyoming’s when you need something amended.
Delaware, and the misunderstanding
Delaware’s reputation is real and it is about corporations, not LLCs: the Court of Chancery, a century of case law, and the fact that institutional investors expect to buy shares in a Delaware C-corp. If you are raising a venture round, you will end up in Delaware, as a corporation, after a conversion, and the LLC’s original state is not the obstacle.
If you are a consultant, an agency, a SaaS founder or an e-commerce operator with no investors, what you actually get from Delaware is a $400 annual franchise tax (raised from $300 for the 2026 tax year) for benefits designed for someone else’s cap table. It is not a mistake in any serious sense. It is just over six times the annual cost of Wyoming for case law you will never litigate.
What the state does not decide
This is where most state-comparison articles stop, and it is the part that matters most.
Your state choice does not decide your tax. For a non-resident with no US presence, no employees and no dependent agent in the US, the federal question is whether you are engaged in a US trade or business with effectively connected income, a test that has nothing to do with Wyoming or Delaware. That is covered in US tax for non-resident owners.
And it does not decide what your own country says. Wherever you are tax resident, the profit of a US LLC is generally attributed to you and taxed there, whatever the certificate says. Founders who pick a state expecting it to solve a tax problem are solving the wrong variable: the real one is where you live, which is the whole point of the assessment.
Your annual obligations do not disappear either. Whatever state you choose, a foreign-owned single-member LLC files Form 5472 with a pro-forma 1120 every year, with a $25,000 penalty attached. No state exempts you from that.
Privacy: what each state actually publishes
The criterion people care about most and understand least, because “privacy” here means something specific and limited.
What is at stake is the public state record. In some states the members and managers of an LLC appear in filings anyone can search. In others they do not. Wyoming and New Mexico keep members off the public record; Florida publishes them.
What this does not give you is anonymity. Your bank knows who you are. The IRS knows who you are, because the responsible party on the EIN application is a named person. Your own country’s tax authority knows or will know. Beneficial ownership reporting regimes exist and have changed more than once. Anyone selling a state as a way to be invisible is selling a fiction, and it is a fiction that attracts exactly the wrong kind of attention from banks.
What it does give you is protection from casual searching. Competitors, disgruntled counterparties, data brokers and anyone curious cannot pull your name from a public register in thirty seconds. That is a genuine and modest benefit, and it is the correct size to weigh in the decision.
The registered agent is a related but separate thing. The agent’s address appears publicly; yours does not have to. That is normal and it is what the service is for. It is not a mechanism for hiding ownership.
The honest summary: privacy is a real tiebreaker between otherwise similar states and a bad primary reason to choose one. If your decision rests on it, check what you actually expect it to prevent.
The cost comparison, done honestly
Comparisons in this category usually list formation fees, which is the least important number.
Formation is a one-off and it is small. The difference between states here is noise against everything else you will spend.
Annual maintenance is what compounds. The state’s annual fee or franchise tax plus the registered agent, every year, for as long as the entity exists. New Mexico’s advantage is that the state side of this is nothing at all; Delaware’s disadvantage is a flat annual tax owed regardless of revenue.
The federal filing dwarfs both. Form 5472 with a pro-forma 1120, prepared properly, costs more annually than the state and the agent combined in every state on this list. It is identical in all of them, which is precisely why it should not feature in the state comparison, and also why a state-level cost difference should not drive your decision when the largest line item is unaffected by it.
Changing state later has a cost the comparisons omit. Domestication where available, or forming new and winding down the old, and in most cases redoing your banking. That is the real argument for thinking about it once rather than optimising a small annual difference.
Put together: the annual difference between Wyoming and New Mexico is smaller than most people’s monthly software bill, and both are dwarfed by the filing. Choose on fit rather than on the arithmetic.
Nevada, Florida and the others people ask about
Four states come up repeatedly and are worth dispatching briefly.
Nevada markets itself hard on privacy and business friendliness, and carries higher annual costs than Wyoming with an additional business licence requirement. For a non-resident with no Nevada activity, it is generally Wyoming with a higher bill.
Florida is chosen emotionally more than analytically. Members appear on the public record, annual maintenance costs more, and there is no compensating benefit without a genuine physical presence in the state. With an office, staff or inventory there, it is a different and legitimate conversation.
Texas comes up for the same reasons as Florida and carries its own franchise tax regime. Again: relevant with real activity in the state, not otherwise.
Your own state of preference: somewhere you visited, somewhere a friend recommended, somewhere with a name you like. This is not a criterion, and the cost of indulging it is paid annually.
The general rule that covers all of them: form where the entity costs least to maintain and reveals least, unless you have real activity somewhere, in which case form there. Everything else is marketing.
The practical recommendation
Wyoming unless you have a specific reason not to. New Mexico if minimum maintenance is the priority and you are comfortable with the occasional extra question. Delaware if investors will require it, and if that is a real conversation you are having, not a someday.
If you want the state chosen against your actual case rather than a generic ranking, that is part of what the assessment does, and part of what we set up when we form the company.
Frequently asked questions
Does the state change how much US tax I pay?
For a non-resident with no US presence, no. None of these states levies personal income tax on the pass-through profit of a non-resident owner, and your federal position depends on whether you have effectively connected income, not on the state. The state decides your annual admin cost and your privacy, not your tax bill.
Is Delaware better for raising money?
Delaware is the standard for venture-backed C-corporations, and that reputation leaks onto LLCs where it does not apply. If you are raising institutional capital you will most likely be converting to a Delaware C-corp anyway, and the LLC's state of formation is not what holds that up.
Do I have to register in the state where I live?
US foreign qualification rules apply to doing business in another US state, not to your country of residence. What your own country thinks of the LLC is a separate and much more important question, and it does not depend on which US state you chose.
Can I move my LLC to another state later?
Yes, by domestication where both states allow it, or by forming a new entity and migrating. It costs money and paperwork, and it means a new EIN in some scenarios, so it is worth choosing deliberately the first time.