Delaware vs Wyoming vs Nevada vs New Mexico LLC: A Non-Resident State Comparison Guide

Is there a single best state for a non-resident LLC?

No, and this guide will not pretend otherwise. The most common thing a non-resident founder is told online is a confident per-state ranking — “Wyoming #1, Delaware #2” — usually attached to whatever the author sells. That ranking is fiction. The right state depends on what you are optimizing for: recurring cost, investor recognition, case-law certainty, or a specific operational need. Two founders with different plans can both be correct picking different states.

What is true is that for a person living outside the US with no US office, employees, or inventory, the practical shortlist is Delaware, Wyoming, Nevada, and New Mexico. These four let you form a company without being tied to a state where you actually do business. Your home state only enters the picture if you have a real US presence, which most fully-remote non-residents do not. This guide compares the four on the factors that genuinely differ, with worked examples instead of a scoreboard.

Throughout, remember the boundary that no formation state changes: your federal obligations. A foreign-owned LLC files the same federal returns and gets the same EIN whether you form in Dover or Cheyenne. The state choice is a smaller decision than the marketing implies — important, but not the thing that makes or breaks a non-resident business. The full non-resident path is laid out in our Delaware LLC for non-residents guide.

How does the Delaware LLC franchise tax actually work?

This is the single most misreported number in every state-comparison table, so it is worth getting exactly right. A Delaware LLC pays a flat $300 franchise tax each year, due June 1 starting the year after formation. There is no annual report for an LLC, and there is no calculation based on revenue, assets, or shares. The number is the same for a one-person LLC and a large one.

The confusion comes from Delaware corporations. The authorized-shares method and the assumed-par-value method— the formulas that can push a C-Corp’s franchise tax into the thousands — apply only to corporations, never to LLCs. If a comparison page shows a Delaware LLC owing more than $300 a year in franchise tax, it has copied a corporation table by mistake. You can read the real LLC figure on our Delaware franchise tax page.

Miss the June 1 deadline and Delaware adds a $200 penalty plus 1.5% interest per month on the unpaid amount, and the LLC loses good standing until it is cured. That is the one date a Delaware LLC owner has to calendar. It is also exactly why our service tracks the deadline for you, so the flat $300 stays flat $300.

How do Delaware, Wyoming, Nevada, and New Mexico compare on cost?

On the narrow question of recurring state fees, Wyoming and New Mexico tend to be the cheapest of the four, Delaware sits in the middle with its flat $300, and Nevada is typically the most expensive because of its additional annual state filings. We are deliberately not inventing exact dollar figures for every state in this guide, because state fees change and a stale number does more harm than good — confirm the current fee on each state’s official site before relying on it.

The more useful point is that the state-fee difference is small relative to your total cost. Formation, a registered agent, and federal compliance such as Form 5472 dwarf the gap between a Wyoming annual fee and Delaware’s $300. Optimizing the whole picture matters far more than shaving the cheapest state-fee line. For the full Delaware breakdown, see our Delaware LLC cost page.

Read that table as orientation, not a verdict. The “best known for” row is what each state is genuinely recognized for, not a score we are assigning. Verify the current fees and annual-filing rules on each state’s official site before you decide.

A worked example shows why the headline state fee rarely decides anything. Suppose two non-resident founders run identical one-person service businesses. One forms in Delaware and pays the flat $300 franchise tax each year plus about $99 to renew a registered agent — roughly $399 of recurring state-and-agent cost. The other forms in a lower-fee state and saves perhaps a hundred dollars or so a year on the state line. Both still pay for formation up front, both still keep a registered agent, and both still shoulder the same federal Form 5472 work. The annual gap between them is a rounding error next to the value of picking the structure that matches their actual plan. That is the honest way to read a cost comparison: in context, not as an isolated number.

What about privacy across these states?

Wyoming and New Mexico are the two most often marketed as private, because neither lists member or manager names in the public formation record. New Mexico goes a step further by not requiring an annual report at all. Delaware also does not name members in the Certificate of Formation. Nevada is the outlier of the four: it requires an annual list that discloses managers or managing members, so it offers less public privacy than its reputation suggests.

But it is important to be precise about what “privacy” means here. It refers to the public record — what a stranger can look up on a state website. It does not mean anonymity from regulators. To open a US business bank account or a Stripe account, you disclose the beneficial owners to the provider regardless of state. The IRS knows who you are through your EIN and your tax filings. State privacy keeps your name out of casual public lookups; it does not hide you from the people who are legally entitled to know.

There is also a practical limit to how much public privacy is worth to a non-resident. Most of the people you actually transact with — your bank, your payment processor, your accountant, the IRS — already have your full details by design. The audience that a private formation record shields you from is narrow: competitors, data brokers, and the merely curious. That is a real benefit if you value it, and Wyoming or New Mexico deliver it. But it is worth being clear-eyed that choosing a state for privacy is choosing it for that narrow benefit, not for protection from any government or financial institution.

Why is Delaware known for case law and recognition?

The genuine, non-marketing reason founders pick Delaware is its body of business case law. The Delaware Court of Chancery is a specialized business court with centuries of decisions, which means that if a dispute arises among members or with investors, the legal outcome is more predictable than in states with thin case law. Predictability has real value when money and partners are involved.

The second reason is recognition. US venture investors overwhelmingly expect a Delaware C-Corp when they fund a startup, and a Delaware LLC converts into that structure along a well-worn path. If there is any chance you will raise institutional money or add US partners, starting in Delaware avoids a later migration. Wyoming and New Mexico carry less of this recognition, which rarely matters for a solo e-commerce or services business but matters a lot for a fundable startup.

This is the honest trade. Delaware does not have the lowest state fee, and it is not the most private. What it has is certainty and acceptance. If those are not on your priority list, a cheaper state may genuinely fit you better — and that is a legitimate choice, not a downgrade.

When does your home state actually matter?

For a true non-resident — living abroad, working remotely, no US office or staff — you have no US home state, and the home-state option simply does not apply. You are free to choose among the formation-friendly states without a state pulling you back by default.

The home-state question becomes real only when you have a US presence. Inventory sitting in a US warehouse, a US-based employee, or a co-founder operating from a particular state can create nexus in that state, which may require foreign qualification — registering your out-of-state LLC to do business there — and can trigger state tax or sales-tax obligations. In that situation, forming in Wyoming does not erase the obligations created by where you actually operate.

Because nexus is fact-specific and changes with how you run the business, treat it as a question for a CPA rather than something to settle from a comparison table. If you have any US footprint, confirm where it creates obligations before assuming your formation state covers them. Our Delaware LLC taxes overview explains the general US picture for non-residents.

What federal obligations apply regardless of state?

This is the part the state debate distracts from. Your formation state changes none of your federal duties. Every foreign-owned single-member LLC treated as a disregarded entity must file Form 5472 with a pro forma Form 1120 each year, reporting transactions between you and the company, such as the capital you contribute. It is due April 15, extendable to October with Form 7004, and the penalty under IRC 6038A for failing to file is $25,000. None of that is avoided by choosing Wyoming over Delaware. The detail is on our Form 5472 for Delaware LLCs guide.

The same goes for the basics: you need an EIN, which the IRS issues without an SSN in about 2 to 4 weeks for non-resident applicants, in every state. US income tax for a non-resident applies only to effectively connected income (ECI) and to US-source FDAP income, which is withheld at a default 30% and reduced only if a tax treaty is actually in force between the US and your country. Beneficial ownership reporting now follows the March 2025 FinCEN interim final rule, under which US domestic entities are exempt and only certain foreign reporting companies are in scope.

One more federal point sellers ask about: the 1099-K reporting threshold is more than $20,000 and more than 200 transactions after the OBBBA repealed the proposed $600 threshold. These rules are the same in all fifty states, which is the whole reason the state choice is a smaller lever than it looks.

It is worth pausing on the treaty point, because it is where general state-comparison content most often misleads. The 30% default withholding on US-source FDAP income — things like certain royalties or dividends — is reduced only if a tax treaty is genuinely in force between the United States and your country of residence, and only to the rate that treaty specifies. Forming in Delaware versus Wyoming does nothing to that rate. Two founders from different countries running identical Delaware LLCs can face different withholding outcomes purely because one country has a US treaty and the other does not. The state on your Certificate of Formation is irrelevant to that analysis; your residency and the income type are what matter, and a CPA who works with non-residents is the right person to confirm it.

Will the formation state affect banking or Stripe approval?

In practice, rarely. Bank and Stripe approval is always the provider’s decision and is never guaranteed in any state, but fintech banks and Stripe onboard LLCs from Delaware, Wyoming, Nevada, and New Mexico routinely. The formation state is seldom the reason an application is declined. What actually moves the needle is a finished EIN, a clear description of your business, and identical details across your formation document, ID, and application.

If a provider does decline, that is not a verdict on your state — each reviews independently, so you apply to another. Our Delaware LLC banking guide walks through the providers that onboard non-residents and how to present a clean application. The takeaway: do not pick a state to please a bank, because the state is rarely what the bank is looking at.

The same logic applies to payment processors. People sometimes assume a particular state unlocks a Stripe account or makes one harder to get. In reality, a Stripe account turns on your EIN, your business model, and the consistency of your application, and approval remains Stripe’s decision regardless of where you formed. If you sequence it correctly — form the LLC, finish the EIN, then apply with a clear and accurate description — the state line on your paperwork is one of the least important fields in the whole process. Choosing one state over another to chase an approval you could get either way is optimizing the wrong variable.

How should a non-resident actually decide?

Start by writing down what you optimize for, then let that pick the state rather than a generic ranking. If you may raise US venture money or add partners, Delaware’s recognition and case law are worth its flat $300. If you are a solo e-commerce or services owner who simply wants the lowest recurring cost and minimal public footprint, Wyoming or New Mexico is a reasonable, honest choice. Nevada is hard to justify for a non-resident given its higher fees and annual-list disclosure, unless you have a specific reason tied to it.

Then compare total cost — formation, registered agent, recurring fee, and federal compliance — not just the headline state fee. The difference between states on that line is small; the difference in recognition, case law, and your own time spent on compliance is larger. See the end-to-end steps on our how it works page.

None of these are absolute. They are starting points to match a state to a goal. If your goal is a Delaware LLC, our service is a flat $397, all-inclusive, with the Delaware state fee included, and year two is the flat $300 franchise tax plus about $99 to renew your registered agent.

What does a realistic decision look like?

Picture a solo founder abroad selling a digital product to US customers, with no US office or inventory. They have no US home state, so the choice is among the four formation states. They do not plan to raise venture money, and they value low recurring cost — so Wyoming or New Mexico is a perfectly honest pick. They still get an EIN, open a fintech bank account, and file Form 5472 each year, exactly as a Delaware founder would.

Now picture a founder building a fundable startup who expects US angel money within a year. For them, Delaware’s recognition and conversion path to a C-Corp outweigh a small fee difference, so Delaware is the cleaner default. Same person, different goal, different right answer — which is the entire point. The state is a tool you match to a plan, and the honest comparison is the one that admits the answer depends on you. When you are ready, start with our Delaware LLC overview.