What is the best state to form a US LLC?
There is no single best state for everyone, but there is a best state for your situation. For an entrepreneur living outside the United States with no physical presence there, Wyoming wins in the vast majority of cases, New Mexico suits tight budgets and Delaware only makes sense if you plan to raise money. Here is the method to decide in ten minutes, with the real figures of six states.
9 min read
9 min read
Picking the state for your LLC is the first decision of the journey and the one that generates the most noise. Forums, videos and law firms contradict each other: Delaware for prestige, Nevada for its lack of income tax, Florida because you have friends there. Most of that advice is written for Americans who live in the state in question. It does not apply to you.
This article is for entrepreneurs who live outside the United States and sell online, invoice clients abroad or launch a digital project. You will find the real figures of six states, our recommendation, and above all how LLC Place chooses the state with you and then forms the company from start to finish, without you filling in a single American form.
The rule that rules out four states in five
A US LLC does not have to be based where its customers live. It has to be registered where it has a physical presence: an office, a warehouse, an employee, a manager working on site. If you open a shop in Miami, your LLC will be in Florida, whatever the rankings say. Forming an LLC in Wyoming and then running it from an office in Florida would force you to register it a second time in Florida, with two sets of annual fees.
That rule has a happy consequence: if you have no physical presence in the United States, you are free. No state is imposed on you, and you can pick the one that combines the lowest fees, the strongest privacy and the simplest administration. That is exactly what we do for every LLC Place client: a few questions about your situation, a state recommendation, then we take care of everything else.
Federal tax does not depend on the state. A single member LLC owned by someone living abroad, with no employee or office in the United States and no income effectively connected with a US trade or business, pays no federal tax on its profits, whether it is from Wyoming or Delaware. It files Form 5472 with a pro forma 1120 every year, and its profits are taxed in your country of residence. At LLC Place those filings are available as an option at €150 per year, or €398 per year with a dedicated tax expert, and are included in the Pro and Founder plans. Sales tax depends on the states where you sell, not on the one where you are registered: our article on sales tax nexus explains it in detail.
The five criteria we check for you
Once physical presence is out of the picture, five criteria separate the states, and they are the ones our team applies to every file. The filing fee, paid once to the state to record the Articles of Organization. The yearly cost, an annual report or a franchise tax, paid every year to stay in good standing. Privacy, meaning whether the members' names appear in the public register. State income or corporate tax, which can hit an LLC depending on the case. And administrative weight, in other words the number of formalities you must not forget.
The criterion people overrate is prestige. The one they underrate is the yearly cost added up over five or ten years, because an LLC lives a long time and every late annual report costs penalties and the loss of good standing. That is why the LLC Place dashboard reminds you of every deadline, state and federal, instead of leaving you to remember it.
Six states compared
| State | Filing fee | Yearly state cost | Members public | Best for |
|---|---|---|---|---|
| Wyoming | $100 | $60 minimum (annual report) | No | Most founders living abroad |
| New Mexico | $50 | $0, no annual report | No | Tight budgets, simple activities |
| Delaware | $100 | $300 franchise tax | No | Fundraising, investors |
| Florida | $125 | About $139 (annual report) | Yes | Physical presence in Florida |
| Texas | $300 | Mandatory annual report, tax only above a high revenue threshold | Yes | Physical presence in Texas |
| Nevada | $425 | $350 (annual list and business license) | Yes | Rarely justified |
Three lessons jump out. First, Nevada, often praised for having no income tax, is actually the most expensive state in the table: you already get zero state tax in Wyoming and New Mexico for far less. Second, Florida and Texas are only good choices if you are genuinely established there, because they publish the members' names and bring nothing extra to a remote entrepreneur. Third, Delaware charges $300 of franchise tax every year no matter what, even with no activity at all.
Wyoming: the state we recommend to most of our clients
Wyoming combines everything a remote entrepreneur is looking for: a moderate filing fee, an annual report of $60 minimum, no state income or corporate tax, and a register that does not publish the members' names. Its LLC law is old and stable, online banks such as Mercury know its documents inside out, and Stripe accepts it without question. It is the state LLC Place proposes by default: we have a registered agent, a commercial address and a well oiled filing process there, which lets you launch your LLC with about ten minutes of input on your side. Our article on the anonymous Wyoming LLC explains how that privacy works.
The only thing you can hold against it is that it is not free every year. Sixty dollars a year is still the price of a good dinner, for a structure that protects your personal assets and collects in dollars. And you do not have to watch the calendar: your LLC Place dashboard warns you before the deadline.
New Mexico: the budget option, which we offer too
New Mexico is the only state in this comparison that requires neither an annual report nor a yearly fee. Once the LLC is formed for $50 in state fees, the administration asks nothing more of you. Members are not published either, which makes it the most affordable anonymous LLC in the country. LLC Place forms your company there on the same terms as in Wyoming, registered agent and commercial address included.
So why is it not our first choice? Because the total absence of formalities has a flip side: nothing reminds you each year that the LLC exists, and some entrepreneurs left on their own then forget their federal obligations. A few banks and platforms also know its paperwork less well than Wyoming's, which can slow down an account opening. For a simple activity on a tight budget it remains an excellent choice, provided someone keeps track of the federal deadlines for you, which is what our platform does.
Delaware: only if you raise money
Delaware owes its reputation to its Court of Chancery, a court specialised in corporate law, and to a body of case law that investors know by heart. If you plan to bring in venture capital, they will almost always ask for a Delaware company, and usually a C Corporation rather than an LLC.
For a freelancer or an online store, those advantages are useless and the $300 yearly franchise tax is due anyway, even with zero revenue. Prestige does not bring in a single extra customer. If your project really is about raising money, LLC Place forms your company in Delaware; otherwise we honestly advise against it. Our detailed comparison Wyoming, Delaware or New Mexico digs into those three states point by point.
Florida, Texas, Nevada and the rest
Florida and Texas are excellent states to live and do business in. They publish the managers' names, require an annual report and offer no particular advantage to an entrepreneur who never sets foot there. Choose them if, and only if, your activity has a real presence there: a warehouse, a team, premises. Nevada sells a lack of income tax that Wyoming already offers, at a much higher price. California and New York, finally, add a minimum yearly tax of several hundred dollars and publication formalities. LLC Place can register your company in any of those states when your activity is based there: the choice stays yours, the paperwork stays ours.
The right state for your profile
You sell online, freelance or run a store from Europe, North Africa or anywhere else, with no presence in the United States: Wyoming. You want the lowest possible cost and you are disciplined about deadlines: New Mexico. You are preparing to raise money from American investors: Delaware, after discussing with them whether an LLC or a C Corporation fits better. You are opening premises, a warehouse or hiring in a specific state: that state, without hesitation. In every case, the LLC Place assistant asks about physical presence before proposing a state, so the recommendation matches your reality rather than a trend.
Forming an LLC in a fashionable state and then physically running the business in another one forces a foreign qualification in the second state. You then pay two filings, two registered agents and two annual reports. The state of formation must be the one where you actually operate, or any state at all if you operate nowhere in the US. Our assistant spots this case from the first questions and steers you to the right state.
What LLC Place does for you once the state is chosen
Choosing the state is only the first line of the journey, and it is the only decision we make together with you. Everything else is included in the package: the registered agent in the chosen state, the US commercial address, the drafting and filing of the Articles of Organization, the operating agreement in English, obtaining the EIN from the IRS without a Social Security number, then support to open your US bank account. You answer a questionnaire, you sign once, and you follow every step from your dashboard.
After that, the platform remains your management space for the long run: state renewal reminders, document tracking, and annual IRS filings as an option at €150 per year, or €398 per year with a dedicated tax expert, included in the Pro and Founder plans. For the full budget, see our article on the cost of a US LLC, and to understand what happens when a deadline is missed, the one on the annual report and franchise tax.
Frequently asked questions
Do I have to choose the state myself?
No. The LLC Place assistant asks a few questions about your presence in the United States, your fundraising plans and your budget, then proposes the right state, Wyoming in most cases. You can also impose your own choice, and we form the company in the state you want.
Can I change state after formation?
Yes, through a domestication procedure, or by forming a new LLC and dissolving the old one. It is doable but costly and slow, with a new EIN in the second case. Better to choose right from the start, which is exactly what the LLC Place recommendation is for.
Is Wyoming accepted by banks and by Stripe?
Yes. Mercury, Relay, Wise Business and Stripe handle Wyoming LLCs every day. It is even one of the states they know best, which speeds up the checks during the account opening we support you through.
Can a Wyoming LLC sell across the whole country?
Yes. The state of registration does not limit where you can sell. It is your sales volume in each state that may trigger sales tax obligations, regardless of Wyoming.
Do I need a different state if there are several members?
No. The number of members does not change the ranking. It does change the federal tax regime, with Form 1065 replacing the 5472, which we detail in the 2026 guide to forming a US LLC from abroad. LLC Place forms single member and multi member LLCs alike.
Related guides
Open a US LLC from other countries: United Arab Emirates, Saudi Arabia, Qatar, United Kingdom, India, Canada