“Which state should I form my LLC in?” is usually the first question a founder abroad asks, and the internet is full of lists ranking all 50 states. For most people living outside the U.S., the real choice is narrower: Wyoming, Delaware, or the state where the business will actually operate. This guide compares those options on 2026 fees, yearly filings and taxes, and explains when the choice matters and when it does not.
The short answer
| Your situation | Usually the best fit |
|---|---|
| Online business run from abroad: e-commerce, freelancing, software, consulting. No office, staff or inventory in any U.S. state. | Wyoming |
| You plan to raise money from venture investors or issue stock options | Delaware, usually as a C corporation rather than an LLC |
| You will have an office, employees, a shop or a warehouse in one state, such as New Jersey | That state |
| An investor, bank or platform you work with requires a specific state | The state they require |
The rest of this guide explains why.
2026 costs compared
State fees as published by each state’s filing office for 2026:
| Wyoming | Delaware | New Jersey | |
|---|---|---|---|
| Formation filing | $100 (Articles of Organization) | $110 (Certificate of Formation) | $100 (Certificate of Formation) |
| Yearly state cost | Annual report with license tax: $60 minimum | Annual LLC tax: $400 (from 2026) | Annual report: $75 |
| Yearly due date | First day of the anniversary month | June 1 | End of the anniversary month |
| State income tax on the LLC’s income | None | Generally only on Delaware-source income | NJ-source income is taxed on the owner’s NJ return |
| Registered agent in the state | Required | Required | Required |
| Fees over 3 years, before agent and other services | $220 | $910 | $250 |
Sources: Wyoming fee schedule and annual report guide, Delaware fee schedule and annual tax instructions, New Jersey Division of Revenue fees. Fees change, so check them before you file.
Wyoming’s license tax is the greater of $60 or two-tenths of one mill on the dollar ($0.0002) of the LLC’s assets located and employed in Wyoming. An online LLC with no assets in the state pays the minimum.
To see the total, including a registered agent and a New Jersey foreign registration if you need one, use the calculator at the end of this article.
Wyoming: the default for online businesses run from abroad
Wyoming became popular with non-U.S. founders for practical reasons:
- Low, predictable yearly cost. One annual report with a $60 minimum license tax.
- No state income tax. Wyoming does not tax the LLC’s income.
- Simple filings. Forming the LLC is one filing with the Secretary of State, and the annual report can be filed online.
The limits are just as real. A Wyoming LLC does not lower your federal obligations, and it does not help if the business actually operates somewhere else. If you rent a warehouse in New Jersey, a Wyoming LLC gives you two states to deal with instead of one. Our Wyoming LLC formation service covers the filing, the registered agent and the EIN.
Delaware: built for investors, expensive for a small LLC
Delaware’s reputation comes from its corporate law and its Court of Chancery, which investors and their lawyers know well. That matters if you plan to raise venture capital, issue stock options or sell the company to a U.S. buyer. In those cases investors usually expect a Delaware C corporation, not an LLC; see C-corp formation.
For a small LLC that will never raise outside money, Delaware mainly costs more. The flat annual LLC tax rose to $400 from 2026 and is due June 1 every year, whether or not the LLC earned anything. A late payment adds a $200 penalty plus interest. Our Delaware LLC page explains when it still makes sense.
New Jersey (or wherever you operate): when the business has a home
The rule that ranking lists skip: an LLC generally has to register in every state where it does business, not only the state where it was formed. Having an office, employees, or inventory stored in a state usually counts as doing business there. Registering as a “foreign LLC” means a second set of fees and reports. In New Jersey, the foreign registration fee is $100 and the annual report is $75 every year after that.
So if you are moving to New Jersey, hiring staff here, or keeping stock in a New Jersey warehouse, a New Jersey LLC (step-by-step guide) is usually simpler than a Wyoming or Delaware LLC registered here as well. The same logic applies to any other state.
Selling online to customers who live in a state is different from operating there. It does not by itself require you to register the LLC in that state, but it can create a sales tax obligation once you pass that state’s sales threshold. Marketplaces such as Amazon and Etsy collect and remit sales tax for you in most states.
What does not change with the state
Whichever state you choose, the federal rules for a foreign-owned LLC are the same:
- EIN. The LLC needs an Employer Identification Number from the IRS. It is free, but owners without an SSN cannot use the online application. See our EIN application service.
- Form 5472 every year. A single-member LLC owned by a foreign person files a pro forma Form 1120 with Form 5472 for each year it has transactions with its owner. That is almost every year, including the first. The penalty for not filing is $25,000.
- U.S. income tax depends on the activity, not the state. If the LLC’s income is effectively connected with a U.S. trade or business, the owner may owe federal income tax and file Form 1040-NR, even if the LLC was formed in Wyoming.
- Tax forms for payers. Banks and platforms will ask the owner for a Form W-8BEN, not a W-9 for the LLC.
A founder who chose the “best” state but misses Form 5472 has saved $340 a year on Delaware fees and risked a $25,000 penalty. The state decision is worth getting right. The federal filings are worth more.
Other states you will see mentioned
Other states are also marketed to non-residents. New Mexico is often recommended for its low fees and limited reporting, and Florida and Texas come up as well. They can be reasonable choices, but rules change and online summaries are often out of date. Check the current fees and reporting rules on the state’s own Secretary of State website before you decide, and apply the same test: where will the business actually operate?
A simple way to decide
- Will you have an office, staff or inventory in a specific U.S. state? If yes, form there.
- Will you raise money from U.S. investors? If yes, talk to a lawyer about a Delaware C corporation.
- Neither? Wyoming is usually the lowest-cost, lowest-maintenance option.
- Whatever you choose, put the EIN, Form 5472 and any state annual report on your calendar from day one.
Getting started
Our page for foreign-owned LLCs explains the whole first year, from formation and the EIN to the first Form 5472. We form LLCs in Wyoming, Delaware and New Jersey and handle the federal filings that follow, in English or Turkish. We do not open bank accounts or give immigration or legal advice. A free 15–30 minute consultation is usually enough to decide on the state.