If you’re a non-U.S. resident looking to form a U.S. LLC, one of the first decisions you’ll need to make is which state to register it in.
You’ll likely encounter plenty of conflicting advice, much of it driven by marketing hype rather than the factors that actually matter to foreign founders.
Claims about “0% tax” can sound compelling, but they often don’t apply in the way they’re presented.
The reality is that there is no single best state for a non-resident LLC. The right choice depends on your business goals.
You’ll likely encounter plenty of conflicting advice, much of it driven by marketing hype rather than the factors that actually matter to foreign founders.
Claims about “0% tax” can sound compelling, but they often don’t apply in the way they’re presented.
The reality is that there is no single best state for a non-resident LLC. The right choice depends on your business goals.
Why Choosing the Right State for Your LLC Matters
Choosing the right state can help you keep ongoing costs low and compliance requirements simple while giving your business the structure it needs to meet your goals.
Choosing the wrong state, however, can mean paying unnecessary fees, dealing with additional compliance requirements, or having to restructure your business later.
That’s why it’s worth spending a little time getting this decision right before you form your LLC.
Choosing the wrong state, however, can mean paying unnecessary fees, dealing with additional compliance requirements, or having to restructure your business later.
That’s why it’s worth spending a little time getting this decision right before you form your LLC.
What State Should You Choose?
For most non-U.S. founders, the decision comes down to what you’re building and what you plan to do in the next six to twelve months.
Standard Remote Business → Wyoming
If you’re starting or running a standard business such as a consulting firm, agency, SaaS company, or e-commerce business and plan to operate remotely, Wyoming is typically the best fit for a non-resident LLC.
It offers the following benefits:
It offers the following benefits:
- Low ongoing costs: $65 / year annual fee
- Strong privacy protections: Members do not have to appear on public record
- Standard registration fee: $110
- Straightforward compliance: One annual report per year
Raising U.S. Investment Soon → Delaware
If you’re building a venture-backed company and plan to raise investment from U.S. investors within the next six months, Delaware is generally the better choice.
In this case you would typically form a Delaware C-Corp, not an LLC.
Delaware’s annual franchise tax for an LLC is $400, and C-Corps pay a $50 annual report fee plus franchise tax starting at $175. While these fees are significantly higher than other states, Delaware offers several benefits that can be important when raising capital from U.S. investors.
In this case you would typically form a Delaware C-Corp, not an LLC.
Delaware’s annual franchise tax for an LLC is $400, and C-Corps pay a $50 annual report fee plus franchise tax starting at $175. While these fees are significantly higher than other states, Delaware offers several benefits that can be important when raising capital from U.S. investors.
- Court of Chancery: Highly trusted for corporate disputes.
- Corporate infrastructure: Supports complex ownership and governance structures.
- Familiarity: Well understood by U.S. investors and attorneys.
The Delaware C-Corp is considered the gold standard for startups looking to raise capital in the U.S. But for a standard LLC, Delaware generally offers no additional benefit over Wyoming while carrying a significantly higher annual cost.
Planning to Have U.S. Presence Soon → Form Where You'll Operate
If you plan to establish a significant physical presence in the U.S. within the next six months, such as an office or brick-and-mortar location, form your LLC in the state where you’ll operate.
You can then register in other states as you expand.
You can then register in other states as you expand.
What If These Plans Are Further Down the Road?
If raising U.S. investment or establishing a physical presence is something you may do years from now, don’t overcomplicate your structure today.
Keep your LLC simple and cost-efficient for your current business.
When you’re actually ready to raise capital or establish a physical presence, you can restructure or register in the appropriate state if necessary.
Keep your LLC simple and cost-efficient for your current business.
When you’re actually ready to raise capital or establish a physical presence, you can restructure or register in the appropriate state if necessary.
What About Taxes?
You’ll often see states like Wyoming marketed to foreign founders because of “0% corporate tax.” While technically true, it’s largely just a marketing angle.
The truth is that unless you have a nexus (presence or significant revenue), state corporate tax may not even apply, which is often the case for many foreign founders operating remotely.
On the other hand, If your business has effectively connected income (ECI), which we talk about in the compliance guide, federal tax applies regardless of which state your form in.
Avoid choosing a state based on a “0% tax” headline. For most remote foreign founders, your actual business goals should be the key deciding factor.
The truth is that unless you have a nexus (presence or significant revenue), state corporate tax may not even apply, which is often the case for many foreign founders operating remotely.
On the other hand, If your business has effectively connected income (ECI), which we talk about in the compliance guide, federal tax applies regardless of which state your form in.
Avoid choosing a state based on a “0% tax” headline. For most remote foreign founders, your actual business goals should be the key deciding factor.
Best State for a Non-Resident LLC: TL;DR
- Remote business: Wyoming is typically the best fit for a non-resident LLC, offering low costs, simple compliance, and strong privacy protections.
- Raising U.S. investment: Delaware is the standard choice for venture-backed companies. You would typically form a Delaware C-Corp, not an LLC.
- Planning a U.S. presence: If you expect to establish an office, employees, or physical operations in the U.S., consider forming in the state where you’ll operate.
- Plans are years away: Don’t overcomplicate your structure today. Choose a cost-effective state for your current business and restructure later if needed.
- Don’t choose based on “0% tax”: State tax depends on where your business has taxable activity or nexus, not simply where your LLC is formed.
Jamie Reed
Founder & Principal
Blackshore Advisory
Founder & Principal
Blackshore Advisory