Ask ten formation sites and you get ten confident answers, each favouring the state they process most. The honest comparison is shorter than the marketing. For a non-resident with no US operations, three states cover almost every sensible choice, and the differences are a few hundred dollars a year plus how much paperwork you want.
The rule first
State choice changes state fees and state taxes. It does not change federal tax, and it does not change where you are obliged to register. An LLC run from a desk in California, or holding inventory in Texas, is doing business there and must register and pay there as well, whatever state it was formed in. For a founder abroad with no US presence, no state has that claim, which is why the choice is free. For anyone with a US foothold, form there and stop reading.
Wyoming
- Cost: about $100 to form; annual report with a $60 minimum licence tax on the formation anniversary; registered agent required.
- Tax: no state income tax, no franchise tax.
- Privacy: member and manager names are not on the public record.
- Banks and platforms: familiar; Mercury, Wise and Stripe process Wyoming LLCs daily.
- Downside: some overseas counterparties have never heard of it; the annual report is a real deadline.
Delaware
- Cost: $110 to form; a flat $300 franchise tax every June 1, no annual report for LLCs; registered agent required.
- Tax: no state income tax on income earned outside Delaware; no sales tax.
- Reputation: the state every investor, lawyer and bank knows. If you will raise US venture money, they will want a Delaware C-corp, and converting an LLC later is routine.
- Downside: the most expensive of the three to keep, and the June 1 tax carries a $200 penalty plus interest when late.
New Mexico
- Cost: $50 to form; no annual report and no annual fee at all; registered agent required.
- Tax: income tax on New Mexico-source income only; nothing for an LLC operating abroad.
- Privacy: members are not listed publicly.
- Downside: less familiar to some banks and counterparties; fewer registered agents; an entity with no yearly touchpoint is easy to forget, which is not the same as compliant.
Side by side
| Wyoming | Delaware | New Mexico | |
|---|---|---|---|
| Formation fee | $100 | $110 | $50 |
| Yearly state cost | $60 minimum | $300 | $0 |
| Public owner names | No | No | No |
| Investor expectation | Neutral | Preferred | Unusual |
| Bank familiarity | High | Highest | Moderate |
What does not change
Form 5472 every year, the EIN, the W-9 for platforms, the US-connected income question and the home-country disclosure are identical in all three. So is the registered agent cost. The federal picture is fixed; you are choosing a state fee and a level of familiarity.
A plain recommendation
Raising US venture money soon: Delaware. Everyone else with no US operations: Wyoming for familiarity and privacy, New Mexico if the lowest possible carrying cost matters and you have a system for never forgetting an entity that never reminds you. Never California, New York or Massachusetts without a business reason to be there.