LLC in District of Columbia (2025 Guide): Costs, Taxes & Requirements

Should you form your LLC in District of Columbia?

If you are a non-resident founder, the internet probably told you to choose Wyoming or Delaware. But maybe you have a specific reason to look at District of Columbia (like buying real estate in District of Columbia or hiring local employees).

This guide breaks down the real costs, taxes, and requirements for a District of Columbia LLC in 2025.

Cost Breakdown: Is District of Columbia Expensive?

It's not just about the $220 to start. It's about how much it costs to keep the company alive.

Expense	Cost	Frequency	Notes
LLC Formation Fee	$220	One-time	Paid to Secretary of State
Registered Agent	~$125	Annually	Required by law
Annual Report	$300	Biennial ($300 every 2 years)	Mandatory compliance filing
Franchise Tax	$0	Annually	None

Compare this: Wyoming charges $100 to start and $60/year. Delaware charges $90 to start but $300/year. Check our full comparison: Best LLC Services for Non-Residents.

The Tax Reality

Many founders forget about state taxes.

1. Income Tax

District of Columbia has a personal income tax rate of 4% - 10.75%.

• If you live abroad: You usually only pay this if you are "doing business" physically in District of Columbia (e.g., you have a warehouse or store here).
• If you are remote: You might be exempt, but District of Columbia is stricter than Wyoming.

2. Corporate / Franchise Tax

District of Columbia has a corporate tax rate of 8.25%. Good news: There is no separate Franchise Tax.

Privacy & Anonymity

Does District of Columbia allow you to hide your name from the public record? NO. District of Columbia generally requires you to list a Manager or Member on the public Articles of Organization. If privacy is your goal, look elsewhere.

Is District of Columbia Right for You?

The Pros

• ✅ Good for local businesses in District of Columbia
• ✅ Presence in the nation's capital.

The Cons

• ❌ Very high filing fees
• ❌ Complex licensing

The Verdict

Verdict: Only form an LLC in District of Columbia if you have a physical office or employees here. For remote businesses, consider Wyoming or Delaware instead.

If you are just selling on Amazon or running a digital agency, stick to Wyoming or New Mexico. They are cheaper and more private. However, if you are buying a rental property in District of Columbia, you must form the LLC in District of Columbia to comply with local laws.

graph TD
    A[Start: Do you have a physical office in District of Columbia?] -->|Yes| B[Form LLC in District of Columbia]
    A -->|No| C[Are you buying Real Estate in District of Columbia?]
    C -->|Yes| B
    C -->|No| D[Are you a remote Non-Resident?]
    D -->|Yes| E[Choose Wyoming or New Mexico]

Next Steps

1. Need a Registered Agent? See our review of Northwest Registered Agent.
2. Need a Bank Account? Read Best US Business Bank Accounts.
3. Need an Address? Read How to Get a US Business Address.