Wyoming vs Delaware LLC: Which State Should You Choose? (2026)

If you are forming a US LLC, you have probably seen conflicting advice. Some sites push Delaware. Others insist on Wyoming. A few mention New Mexico or Nevada.

Here is the straightforward answer: Wyoming is the best state for most LLC owners, especially non-residents. Delaware is better only if you plan to raise venture capital from US investors. The rest of this guide explains exactly why, with real numbers from each Secretary of State office.

Side-by-Side Comparison: Wyoming vs Delaware vs New Mexico vs Montana

All fees listed below are sourced directly from each state's Secretary of State website. Updated for 2026.

*Montana has no annual report fee through 2027. The state legislature may introduce one in future sessions.

Wyoming LLC: Why It Wins for Most People

Wyoming was the first US state to create the LLC structure in 1977. It remains one of the most LLC-friendly states in the country, and for good reason.

Filing and costs

The initial filing fee is $100, paid to the Wyoming Secretary of State when you submit your Articles of Organization. The annual report fee is $60, due on the first day of the anniversary month of your LLC formation. For LLCs with assets exceeding $300,000 in Wyoming, the fee is calculated at $0.0002 per dollar of assets. Most non-resident LLCs with no Wyoming assets pay the $60 minimum.

Source: Wyoming Secretary of State — LLC Filing

No state income tax

Wyoming has no personal income tax, no corporate income tax, and no gross receipts tax. For a non-resident operating outside the US, this means zero state-level tax obligation. Your federal obligations (Form 5472 + pro-forma 1120) still apply, but at the state level, Wyoming is as clean as it gets.

Privacy protections

Wyoming does not require LLC members or managers to be listed in the Articles of Organization. The only public information is the LLC name, registered agent, and organizer (which can be your formation service, not you personally). Wyoming also allows nominee officers and does not require an operating agreement to be filed publicly.

Asset protection

Wyoming provides charging order protection as the exclusive remedy for creditors of an LLC member. This means a creditor cannot force the sale of your LLC or its assets — they can only receive distributions if and when the LLC chooses to make them. This is one of the strongest asset protection frameworks in the US.

Processing speed

Standard filing takes 1-3 business days. Expedited processing (24-hour) is available for an additional $100. Same-day processing is available for $500. For most non-residents, the standard 1-3 day timeline is perfectly adequate.

Delaware LLC: When It Makes Sense

Delaware has a well-deserved reputation as the corporate capital of the US. Over 1.8 million business entities are registered there, including 68% of Fortune 500 companies. But most of that reputation is built on C-Corporation law, not LLC law. The distinction matters.

Filing and costs

The initial filing fee is $90, paid to the Delaware Division of Corporations. This is $10 cheaper than Wyoming. However, the annual franchise tax is $300, due by June 1 each year. That is $240 more per year than Wyoming. Over five years, Delaware costs $1,500 in franchise taxes alone, compared to $300 in Wyoming annual reports. The difference is $1,200.

Source: Delaware Division of Corporations — LLC Fee Schedule

Court of Chancery

Delaware's Court of Chancery is a specialized business court where cases are decided by judges, not juries. This court has over 200 years of corporate case law, providing highly predictable outcomes in business disputes. If you are building a company that may face complex shareholder disputes, governance challenges, or M&A litigation, Delaware's legal infrastructure is genuinely superior.

For a single-member LLC selling digital products or services, the Court of Chancery is irrelevant. You will never use it.

Investor familiarity

US venture capital firms are most comfortable with Delaware entities. Their legal documents, term sheets, and shareholder agreements are often drafted assuming Delaware law. If you plan to raise a Series A or beyond from US institutional investors, forming in Delaware reduces friction in the fundraising process.

Again, this applies to C-Corps raising equity investment, not to single-member LLCs.

Tax considerations

Delaware has no state sales tax, which is often cited as an advantage. However, it does have a corporate income tax of 8.7% for businesses with operations in Delaware. For non-residents with no Delaware operations, this does not apply. But the $300 annual franchise tax applies to all LLCs regardless of where they operate.

New Mexico: The Budget Alternative

New Mexico is the state that most LLC guides either ignore or mention only briefly. It deserves more attention, particularly for non-residents who want the lowest possible ongoing costs.

Filing and costs

The filing fee is $50, the lowest of the four states compared here. More importantly, New Mexico has no annual report requirement and no annual fee. Once your LLC is formed, there is no recurring state cost. Your only ongoing expenses are your registered agent fee and federal compliance (Form 5472).

Source: New Mexico Secretary of State — LLC Filing

Privacy

New Mexico provides arguably the strongest privacy of any US state. LLC members and managers are not listed in the Articles of Organization. There is no annual report, which means there is no annual opportunity for member information to become public. The only public record is the LLC name, registered agent, and organizer.

Processing

Standard processing takes 1-2 business days, making New Mexico one of the fastest states for LLC formation.

The trade-offs

New Mexico does have a state income tax (4.8%-5.9%), but this only applies if you have New Mexico-sourced income. For non-residents operating outside the US, this does not apply. The main trade-off is less name recognition — banks and partners are more familiar with Wyoming and Delaware LLCs. In practice, this rarely causes issues, but it is worth noting.

Montana: The Emerging Option

Montana has the lowest filing fee of any state at $35. It also currently has no annual report fee, though this may change after 2027 when the state legislature reviews the policy.

Why Montana is worth considering

• $35 filing fee — the lowest in the US
• $0 annual report through at least 2027
• No state sales tax — one of only five states without one
• Montana does have a state income tax (6.75%), but only on Montana-sourced income

The uncertainty factor

Montana's $0 annual report status is not guaranteed to continue indefinitely. The state legislature has discussed introducing an annual filing fee. If you form in Montana and a fee is introduced later, you would be subject to it. Wyoming's $60/year is predictable and stable. Montana's $0 may or may not last.

For non-residents who want the absolute lowest cost today and are comfortable with potential changes, Montana is a valid choice. For everyone else, Wyoming offers more stability.

When to Choose Each State: Decision Guide

For Non-Residents: Our Recommendation

If you are a non-US resident forming an LLC to access Stripe, PayPal, or the US banking system, Wyoming is the right choice in almost every case. Here is why:

1. Cost predictability. $100 to file, $60/year to maintain. No surprises. No escalating fees as your revenue grows.
2. No state income tax. For non-residents with no US-sourced income, this eliminates an entire layer of state tax compliance.
3. Speed. 1-3 business days. You can have a formed LLC within a week of ordering, with an EIN obtained the same day.
4. Bank acceptance. Wyoming LLCs are well-recognised by neobanks like Mercury, Relay, and Wise Business. There are no red flags or additional scrutiny compared to other states.
5. Privacy. Your name does not appear in public records as a member. Only your registered agent is listed.

Delaware only makes sense for non-residents if a US investor or accelerator has specifically requested it. If no one is asking for Delaware, choose Wyoming.

Common Mistakes to Avoid

1. Choosing Delaware because it sounds impressive

Delaware's reputation is built on C-Corporation law, not LLC law. For a single-member LLC, you are paying $240 more per year for zero practical advantage. Do not pay for prestige you cannot use.

2. Choosing Nevada for "no taxes"

Nevada has no state income tax, but it charges a $200 annual business licence fee plus a $150 annual list of managers filing. That is $350/year — nearly six times more than Wyoming. Nevada's "no tax" marketing is misleading when you factor in these mandatory fees.

3. Forming in your home country's equivalent state

Some non-residents choose a state because it feels geographically close to their country or because they have heard of it (California, New York, Texas). These states have higher fees, more complex tax requirements, and no advantages for non-residents. California, for example, charges an $800 annual franchise tax regardless of revenue.

4. Not budgeting for ongoing compliance

The filing fee is just the beginning. Every non-resident LLC owner must file Form 5472 annually ($25,000 penalty for non-filing), maintain a registered agent, and file any required state annual reports. Budget for $800-1,200/year in total compliance costs, regardless of which state you choose.

5. Ignoring New Mexico

If cost is your primary concern, New Mexico saves you $60-300 per year compared to Wyoming and Delaware. Over five years, that is $300-1,500 in savings. It is not a glamorous choice, but it is the financially optimal one for budget-focused founders.