Wyoming vs Delaware LLC: Which is Best for Non-Residents? (2025)
Wyoming or Delaware? We compare taxes, privacy, and costs for non-resident LLCs. Don't incorporate in Delaware unless you plan to raise VC money. Here is why.
Table of Contents
Table of Contents
Author's Bio: The Foreign Founder Team has helped over 500+ non-US residents form their US companies. We don't just write about this; we operate our own LLCs and have dealt with the exact tax forms and compliance hurdles you are facing.
Why Trust This Guide? Unlike generic legal sites, we focus solely on the non-resident perspective. We know that "Anonymous LLCs" in Wyoming have different implications when you live in Germany or Brazil versus living in California.
You are ready to start your US business. You know you need an LLC. But now you are stuck on the most common question we get: Wyoming or Delaware?
This decision feels huge. If you pick the wrong state, you might end up paying thousands in unnecessary taxes or drowning in paperwork.
The internet is full of conflicting advice. Lawyers push Delaware. YouTubers push Wyoming.
Here is the truth: For 90% of non-resident founders, the answer is simple, but it depends entirely on your funding strategy.
Let's break down the data, the costs, and the privacy reality so you can make the final decision today.
The Core Difference: Who is it For?
Before we look at the price tag, let's look at the purpose. These two states serve two very different types of entrepreneurs.
Wyoming: The Haven for Bootstrappers
Wyoming invented the LLC in 1977. It was designed specifically to protect small business owners.
- Philosophy: "Leave me alone."
- Target Audience: E-commerce sellers, freelancers, digital agencies, solo founders, and holding companies.
- Key Benefit: Privacy and low cost.
Delaware: The Standard for Corporations
Delaware is the corporate capital of the world. More than 65% of Fortune 500 companies are incorporated there.
- Philosophy: "Let's do business at scale."
- Target Audience: Tech startups, companies raising VC capital, large corporations with complex structures.
- Key Benefit: The Court of Chancery (predictable legal system for investors).
Feature Comparison: The Data You Need
Let's look at the hard numbers. This table assumes you are a non-resident (living outside the US).
| Feature | Wyoming (WY) | Delaware (DE) | Winner |
|---|---|---|---|
| State Filing Fee (One-time) | ~$100 | ~$90 | Tie |
| Annual Franchise Tax | $60 (+$2 fee) | $300 | Wyoming 🏆 |
| State Income Tax | 0% | 0% (for non-residents) | Tie |
| Privacy (Member Names) | Not Public | Not Public (but tracked) | Wyoming 🏆 |
| Investor Preference | Low | High | Delaware 🏆 |
| Annual Report Due Date | First day of anniversary month | June 1st | Wyoming (Rolling) |
| Best For | Small Business / E-com | Startups / IPO | - |
Insider Tip: Many people forget about the Registered Agent fee. Both states require one. Expect to pay $50-$200/year for this service in either state. We recommend checking our Best LLC Services Review to find the best deal.
Deep Dive: The Privacy Myth
"Anonymous LLC" is a buzzword that gets thrown around a lot. Let's clarify what it actually means in 2025.
Wyoming's Privacy
Wyoming allows you to use a "Nominee" or your Registered Agent's information on the public filing. This means if someone searches the Wyoming Secretary of State database, they won't see your name. They will see your Registered Agent's address.
However, this does not mean you are invisible to the government.
- IRS: You must disclose beneficial owners to the IRS to get an EIN.
- FinCEN: Under the new Corporate Transparency Act (BOI Report), you MUST report your passport details and home address to FinCEN. This database is not public, but it is available to law enforcement.
So, Wyoming offers public anonymity (from nosey neighbors or competitors), not government anonymity.
Delaware's Privacy
Delaware also does not require member names on the Certificate of Formation. However, the annual Franchise Tax report in Delaware is a bit more invasive regarding business information than Wyoming's simple annual report.
The Cost of Compliance: $62 vs $300
This is usually the deciding factor for small businesses.
The Wyoming Deal
In Wyoming, you pay $62 per year. That's it. You file a simple Annual Report online, pay the fee, and you are done. It takes 5 minutes.
The Delaware Tax
Delaware charges a flat $300 Annual Franchise Tax for LLCs. This is due every year by June 1st. If you miss the deadline, there is a $200 penalty plus interest.
Math time: Over 5 years:
- Wyoming: $62 x 5 = $310
- Delaware: $300 x 5 = $1,500
That's a $1,200 difference. For a startup with zero revenue, that $300/year can feel like a nuisance.
Decision Tree: Which State Should You Pick?
Still confused? Use this flow chart to make your decision in 5 seconds.
graph TD
A[Start: Choose Your State] --> B{Do you plan to raise Venture Capital?}
B -- Yes --> C[Choose Delaware]
B -- No --> D{Do you value privacy & low fees?}
D -- Yes --> E[Choose Wyoming]
D -- No --> F{Do you own real estate in FL/TX?}
F -- Yes --> G[Consider Home State LLC]
F -- No --> E
C --> H[Result: DE C-Corp or LLC]
E --> I[Result: WY LLC]
G --> J[Result: FL/TX LLC]
When to Switch? (The "Delaware Flip")
Here is a common strategy we see savvy founders use:
- Start in Wyoming: Launch your e-commerce store or SaaS MVP in Wyoming. Enjoy the low fees ($62/year) while you validate your idea.
- Grow & Validate: Get to $10k or $50k MRR (Monthly Recurring Revenue).
- The Pivot: You get an offer from an Angel Investor or VC. They say, "We only invest in Delaware C-Corps."
- The Flip: You then perform a "Statutory Conversion" or "Merger" to turn your Wyoming LLC into a Delaware C-Corp.
Why do this? You save money in the early days when survival is the goal. You only pay the "Delaware Premium" when you have other people's money to pay for it.
Common Pitfalls for Non-Residents
1. The "US Office" Address Trap
You need a US address for both states. You cannot use your home address in France or India. Solution: You need a Virtual Mailbox or a Registered Agent address.
- Read more: How to Get a US Business Address
2. The Bank Account Struggle
Some outdated advice says "Delaware banks are better." This is false. Modern fintech banks like Mercury and Relay work perfectly with Wyoming LLCs. They don't care which state you are in; they care about your documents (EIN, Articles of Organization).
- Read more: Mercury vs Relay Banking Guide
3. Double Taxation Myths
"If I register in Delaware but live in New York, I pay double tax." True for US residents. False for Non-Residents. If you live in a country with no US tax treaty (or even with one), and you have no "Dependent Agent" or "Permanent Establishment" in the US, you generally don't owe US income tax on pure e-commerce or software income (pass-through). The state of registration doesn't trigger federal income tax.
Final Verdict
The choice is clearer than you think.
- Go with Wyoming if you are building a lifestyle business, an Amazon FBA store, or an agency. The $240/year savings and simple compliance are unbeatable.
- Go with Delaware ONLY if you have a term sheet from an investor or plan to issue stock options to employees in the next 12 months.
Ready to form your LLC? Don't overpay for a lawyer. Use a specialized formation service that understands non-residents. Check out our ranked review of the Best LLC Services for Non-Residents.
Frequently Asked Questions (FAQ)
Is Wyoming really tax-free for non-residents?
Yes, at the state level. Wyoming has zero state income tax. However, you may still have Federal IRS obligations (informational or tax) depending on your business type and tax treaties. But Wyoming itself won't take a cut.
Can I switch from Wyoming to Delaware later?
Yes. You can perform a "Domestication" or "Conversion." It involves filing paperwork with both states and paying a fee (usually around $200-$500). It's a standard procedure for growing startups.
Do I need to visit the US to open a Wyoming LLC?
No. The entire process can be done 100% remotely. You can file online, get your EIN via fax/mail (or third party), and open a bank account like Mercury online. You never need to set foot in Cheyenne.
Which state is better for Amazon FBA?
Wyoming. Amazon accepts Wyoming LLCs without issue. The lower overhead costs of Wyoming help your margins, especially when starting out.
Does Delaware offer more protection?
Legally, yes. Delaware's case law is vast and tested. But for a small business, "protection" usually means "veil piercing" protection. Wyoming's statutes are also very strong on this. Unless you are being sued for millions, the difference is academic for most small founders.
Fact Checked & Verified
This article was reviewed by our editorial team for accuracy. Strategies regarding LLC formation and credit building are based on current 2025 regulations.