Short answer: If you live and do business in one US state, form your LLC in that state. Forming somewhere else means registering in your home state too and paying two sets of fees. If you live outside the US or run an online business with no physical location, Wyoming is the best state to form an LLC for most owners: $100 to form, a $60 minimum annual report, no state income tax and owner names kept off the public record. New Mexico is the cheapest to keep, with no annual report at all. Delaware is the choice for companies that plan to raise venture capital.
State fees on this page were verified on each state’s filing office website in September 2026.
Best States to Form an LLC Compared (2026)
| State | Formation fee | Yearly state cost | State personal income tax | Owner names private | Best for |
|---|---|---|---|---|---|
| Wyoming | $100 | $60 minimum annual report | None | Yes | Non-US residents, online businesses, holding companies |
| New Mexico | $50 | None. No annual report | Yes | Yes | Lowest yearly cost and privacy |
| Delaware | $110 | $400 annual LLC tax, due June 1 | Yes | Yes | Startups raising venture capital |
| Nevada | $425 | $350 ($150 annual list + $200 business license) | None | No | Owners who live or operate in Nevada |
| Montana | $35 | $0 | Yes | No | Lowest formation fee in the US |
| South Dakota | $150 | $55 annual report | None | No | Owners who live or operate in South Dakota |
| Missouri | $50 | None. No annual report | Yes | Yes | Low-cost privacy for Missouri-based owners |
See every state’s fees in our LLC cost by state table. State personal income tax applies to residents of the state and to income earned in it, not to every LLC formed there.
How to Choose the Best State for Your LLC
Three questions decide the answer for most owners.
- Where do you live and work? If you have an office, staff, inventory or customers you serve in person in one state, your LLC is doing business there. That state requires the LLC to register, wherever you formed it.
- What does the LLC need most? Low yearly cost points to New Mexico or Wyoming. Privacy points to Wyoming, New Mexico, Delaware or Missouri. Outside investors point to Delaware.
- Are you a US resident? Non-US residents have no home state, so they pick the state with the lowest cost and the least paperwork. Wyoming and New Mexico fit that best.
When Your Home State Is the Best State
An LLC formed in Wyoming that runs from an office in California is doing business in California. California then requires a foreign registration, its own fees and its $800 minimum franchise tax. The owner pays Wyoming and California both, and saves nothing on California tax.
Form in your home state when:
- You work from a home or office in that state.
- You have employees or inventory there.
- You serve local customers in person, such as a trade, a clinic or a restaurant.
- You own real estate in that state.
Read home state vs out-of-state LLC for the full comparison, and see what foreign qualification involves when an LLC operates outside its formation state.
Wyoming: Best State for Most Out-of-State Owners
- Cost: $100 to form. The annual report costs the greater of $60 or $0.0002 per dollar of assets located in Wyoming, due on the first day of the LLC’s anniversary month.
- Tax: no state personal or corporate income tax.
- Privacy: the public record shows the registered agent and the organizer, not the members.
- Other strengths: strong charging order protection for members and series LLCs.
Wyoming is the default choice for non-US residents and online businesses. See how to start an LLC in Wyoming and Wyoming LLC privacy. Source: Wyoming Secretary of State.
New Mexico: Lowest Yearly Cost
- Cost: $50 to form. No annual report and no annual fee.
- Privacy: owner names are not required on the formation filing.
- Trade-off: New Mexico has a state personal income tax, which applies to residents and to income earned in New Mexico. An owner who lives and works elsewhere does not pay it.
Your only yearly cost is a registered agent. See how to start an LLC in New Mexico and why a New Mexico LLC is a privacy solution. Source: New Mexico Secretary of State.
Delaware: Best for Raising Investment
- Cost: $110 to form, then a $400 annual LLC tax due June 1.
- Law: the Court of Chancery decides business disputes without a jury, and its large body of case law gives investors and lawyers predictable outcomes.
- Privacy: member names are not part of the public filing.
- Trade-off: the $400 yearly tax makes Delaware the most expensive of the top choices for a small business.
Venture capital firms expect a Delaware C corporation, so startups planning to raise money form there. See how to start an LLC in Delaware and Delaware franchise tax: how much and when to pay. Source: Delaware Division of Corporations.
Nevada: No Income Tax, Higher Fees
- Cost: $425 to form ($75 articles, $150 initial list and $200 state business license), then $350 a year ($150 annual list and $200 business license).
- Tax: no state personal or corporate income tax.
- Privacy: the initial and annual lists name the managers or managing members, and those lists are public.
Nevada costs more than Wyoming every year and offers less privacy. It makes sense for owners who live or operate in Nevada. See how to start an LLC in Nevada and our Wyoming vs Delaware vs Nevada comparison. Source: Nevada Secretary of State.
Montana, South Dakota and Missouri
- Montana: $35 to form, the lowest formation fee in the US. Montana has a state income tax and no sales tax. See how to start an LLC in Montana.
- South Dakota: $150 to form and a $55 annual report, with no state income tax. See how to start an LLC in South Dakota.
- Missouri: $50 to form, no annual report and no owner names on the public record. See how to start an LLC in Missouri.
Best State to Form an LLC for an Online Business
An online business with no office, staff or inventory in any state has no home-state registration to worry about. Wyoming is the best fit: low yearly cost, no state income tax and private ownership. New Mexico is the cheapest alternative.
Sales tax works differently. You collect sales tax based on where your customers are and how much you sell into each state, not on where you formed the LLC. Forming in Wyoming does not remove sales tax duties in the states you sell into.
Best State to Form an LLC as a Non-US Resident
Wyoming and New Mexico are the two best states for non-US residents. Both let you form online with no US address of your own, and both keep yearly costs low. Delaware is the choice when US investors are part of the plan.
A foreign-owned single-member LLC files IRS Form 5472 with a pro forma Form 1120 for any year it has transactions with its owner, in every state. Read the full guide on the best state to form an LLC for non-US residents and our non-resident LLC formation guide.
Best State to Form an LLC by Situation
| Your situation | Best state | Full guide |
|---|---|---|
| You live and work in one US state | Your home state | Home state vs out-of-state LLC |
| Non-US resident | Wyoming or New Mexico | Best state for non-US residents |
| Digital nomad | Wyoming or New Mexico | Best states for digital nomads |
| Freelancer | Your home state, or Wyoming if you have none | Best state for freelancers |
| Amazon FBA seller | Wyoming | Best state for Amazon FBA |
| SaaS business | Wyoming, or Delaware if raising capital | Best state for SaaS businesses |
| Startup raising venture capital | Delaware | Best state for startups |
| Real estate investor | The state where the property is, owned by a Wyoming holding LLC | Best state for real estate |
| Local service business | Your home state | Best state for local service businesses |
| Asset protection | Wyoming, Nevada or South Dakota | Top states for LLC asset protection |
| Privacy | Wyoming, New Mexico, Delaware or Missouri | Anonymous LLC |
The Most Expensive States to Form an LLC
Unless you live and work there, avoid these states as a formation state:
- California: $70 to form, an $800 minimum franchise tax every year and a $20 Statement of Information every two years.
- Massachusetts: $520 to form, the highest formation fee in the US.
- Texas: $300 to form and an annual franchise tax report to the Comptroller, due May 15.
See the full list of the worst states to form an LLC.
How to Form an LLC in the State You Choose
- Pick the state using the table above.
- Choose a name that is available in that state.
- Appoint a registered agent with a street address in the state. BusinessAnywhere’s registered agent service covers all 50 states for $147 a year, free the first year when you form with us.
- File the formation document (Articles of Organization or Certificate of Formation) and pay the state fee.
- Sign an operating agreement that sets out ownership and management.
- Get an EIN from the IRS so the LLC can open a bank account and file taxes.
- Register in your home state if the LLC does business there.
BusinessAnywhere handles business registration in all 50 states, Washington DC and Puerto Rico for $0 plus the state filing fee.
FAQs
What is the best state to form an LLC?
Your home state, if you live and do business in one US state. For non-US residents and online businesses with no physical location, Wyoming is the best state: $100 to form, a $60 minimum annual report, no state income tax and private ownership.
What is the cheapest state to form an LLC?
Montana has the lowest formation fee at $35. New Mexico is the cheapest to keep: $50 to form and no annual report or annual fee.
Is Wyoming or Delaware better for an LLC?
Wyoming is better for most small businesses: it costs $60 a year to maintain against Delaware’s $400, and it has no state income tax. Delaware is better for companies raising venture capital. See Wyoming vs Delaware LLC.
Can I form an LLC in a state I don’t live in?
Yes. Any person can form an LLC in any state with a registered agent there. If the LLC does business in your home state, it also registers there as a foreign LLC and pays that state’s fees.
Which states have no state income tax?
Wyoming, Nevada, South Dakota, Texas and Florida have no state personal income tax, along with several other states. Texas charges a franchise tax on LLCs above its revenue threshold.
What is the best state for a non-US resident to form an LLC?
Wyoming or New Mexico. Both have low yearly costs and keep owner names off the public record. Choose Delaware if you plan to raise money from US investors.
