Best US State to Form an LLC as a Foreigner (Wyoming vs Delaware vs Texas vs New Mexico)

There is no single "best" state to form a US LLC — there's only the best state for your priorities. A founder optimizing for lowest lifetime cost will pick differently than one optimizing for investor familiarity. This guide compares the five states non-resident founders compare most often, using the actual numbers rather than generic advice.

Quick Comparison Table

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Quick verdict: Best for budget + privacy → Wyoming. Best for raising VC money → Delaware. Zero ongoing maintenance → New Mexico.

These numbers change periodically with legislation, so always confirm current figures directly with each Secretary of State before filing — but the relative positioning between states has stayed consistent for years.

Wyoming: The Low-Cost, High-Privacy Default

Wyoming pioneered the modern LLC structure and has kept its formation-friendly reputation ever since. It's the most common recommendation for non-resident founders who don't have a specific reason to choose otherwise.

Strengths:

• Lowest predictable ongoing cost among states with an annual requirement
• No public disclosure of member names
• No state income tax

Trade-off: Wyoming doesn't carry the same brand recognition as Delaware with US investors — rarely an issue for bootstrapped businesses, occasionally a minor friction point when raising outside capital.

Delaware: The Investor-Familiar Choice

Delaware's Court of Chancery and decades of corporate case law make it the default for venture-backed startups — but that reputation is built around C-Corps, not LLCs specifically.

Strengths:

• Universally recognized by US investors and legal counsel
• Strong body of business law precedent
• No state income tax for out-of-state LLCs

Trade-off: The flat annual tax is $300 for tax years through 2025 (last paid June 1, 2026) and $400 from tax year 2026 (first due June 1, 2027), which is higher than Wyoming or New Mexico's ongoing costs, with no added benefit for a founder who isn't raising VC funding. (Note: this transition applies to LLCs specifically — Delaware corporations use a different, more complex franchise tax formula.)

Bottom line: if you plan to convert to a C-Corp and raise a priced round later, forming in Delaware from day one can simplify that transition. If you're bootstrapped, this cost buys brand recognition you may not need yet.

Texas: No Income Tax, Higher Entry Cost

Texas has no state income tax and a straightforward franchise tax exemption for LLCs under $2.65M in annual revenue — meaning most early-stage non-resident founders pay effectively nothing annually once past the initial filing.

Strengths:

• No annual fee below the revenue threshold
• No state income tax
• Large, credible US jurisdiction

Trade-off: Higher upfront formation cost than Wyoming or New Mexico, and some public disclosure requirements apply.

New Mexico: Lowest Long-Term Maintenance

New Mexico is the quiet option most founders don't hear about until they've already researched the other three. It has no annual report requirement at all — not a low fee, an actual absence of the requirement.

Strengths:

• Lowest formation cost on this list
• Zero ongoing annual filing requirement — the biggest differentiator here
• No public disclosure of member names

Trade-off: Less brand recognition than Wyoming or Delaware, though this rarely matters for LLCs specifically (as opposed to C-Corps, where jurisdiction reputation carries more weight with investors).

Florida: The One State That Discloses Member Names

Florida is worth including specifically as a caution: it's the only state on this list that publicly discloses LLC member names in state records. For founders who value privacy — a common priority for solo non-resident operators — this is a meaningful trade-off against Florida's otherwise reasonable fee structure.

How to Actually Decide

Match your situation to the closest scenario below:

• "I want the cheapest total cost of ownership and don't care about brand recognition" → New Mexico
• "I want low cost with strong privacy and no unusual trade-offs" → Wyoming
• "I'm planning to raise VC funding within 1–2 years" → Delaware (or plan a clean conversion later)
• "I have meaningful US revenue and want to avoid a percentage-based franchise tax" → Texas
• "Privacy isn't a priority and I want a well-known state" → Florida is workable, but understand the disclosure trade-off going in

A Note on "Doing Business" Requirements

Forming in a state doesn't require operating physically from it. But if you do have a genuine physical presence, employees, or a warehouse in a different state, you may need to register as a "foreign LLC" there too — this is separate from your state of formation and easy to overlook. Whether a company is considered to be "doing business" in another state depends on the specific facts and that state's own rules, so this is worth confirming rather than assuming.

Frequently Asked Questions

Information reviewed August 27, 2026. State fees and thresholds change with legislation — always confirm current figures directly with the relevant Secretary of State before filing.

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