The top 5 states for forming an LLC are:
- Wyoming: Low costs, no state income tax, strong privacy protections.
- Delaware: Preferred for businesses seeking investments, with a business-friendly legal system.
- Nevada: No corporate or personal income tax, strong privacy, and straightforward setup.
- Florida: Affordable fees, no state income tax, and easy online formation.
- Texas: No state income tax, no annual fees, and a massive economy.
Quick Comparison
| State | Filing Fee | Annual Fee | Taxes | Privacy Level | Best For |
|---|---|---|---|---|---|
| Wyoming | $100 | $60 | No state income tax | High | Cost-conscious, online businesses |
| Delaware | $110 | $300 | No state income tax | Moderate | Investment-focused businesses |
| Nevada | $425 | $200-$350 | No income/corporate tax | High | Privacy-focused businesses |
| Florida | $125 | $138.75 | No state income tax | Moderate | Quick and affordable setup |
| Texas | $300 | $0 | No state income tax | Moderate | Large-scale or physical operations |
Why it matters:
Each state has unique advantages based on costs, taxes, privacy, and business infrastructure. Choose Wyoming for affordability, Delaware for raising capital, Nevada for privacy, Florida for simplicity, and Texas for its booming economy. Always consult a legal or tax expert to ensure compliance with U.S. regulations.
Keep reading for a detailed breakdown of each state’s benefits and requirements.
1. Wyoming
Wyoming has become a leading destination for international entrepreneurs looking to form LLCs in the United States. In 2023 alone, the state saw over 150,000 LLCs established, with around 40,000 new LLCs and other business entities registered in just three months. Its popularity is driven by attractive tax policies, strong privacy protections, and business-friendly regulations.
Tax Benefits
Wyoming’s tax policies are a major draw for business owners. According to the Tax Foundation‘s 2025 State Tax Competitiveness Index, Wyoming ranks first for having the most business-friendly tax structure. The state imposes no corporate income tax, franchise tax, or personal income tax on business income, making it an ideal choice for cost-conscious entrepreneurs.
"Because there’s no personal income tax, corporate income tax or franchise tax, Wyoming is one of the most tax-friendly states for LLCs, especially non-U.S. entrepreneurs." – Vincenzo Villamena
Compared to Delaware, Wyoming offers significant cost savings. Incorporation costs in Wyoming are 40-60% lower when factoring in initial filing fees and ongoing maintenance expenses. For example, while Delaware’s annual franchise tax ranges from $175 to over $200,000, Wyoming charges an annual report fee starting at just $60. Additionally, Wyoming does not tax cryptocurrency earnings or transactions, further enhancing its appeal to modern entrepreneurs.
Registration Requirements and Costs
Wyoming simplifies the process of forming an LLC, particularly for international founders. Its minimal paperwork and straightforward registration process reduce administrative headaches.
| Expense | Cost |
|---|---|
| Filing Articles of Organization | $100 |
| Annual Report Fee | $60+ |
| Registered Agent Fee | $25‑$59 |
| EIN Application | Free |
With an initial filing fee of $100 and low ongoing costs, Wyoming keeps LLC formation affordable for business owners.
Privacy Protections
For entrepreneurs who value discretion, Wyoming provides strong privacy safeguards. The state does not require LLC members or managers to be listed in public records, ensuring greater anonymity.
"One key advantage of a Wyoming LLC is privacy – unlike many states, Wyoming does not require LLC members or managers to be listed on public records. This ensures greater anonymity and confidentiality, making it an ideal choice for those who value discretion." – Vincenzo Villamena, CPA & founder of Entity Inc.
Additionally, Wyoming does not mandate LLCs to disclose beneficial ownership in public filings. Combined with minimal reporting requirements, this ensures that founders avoid detailed financial disclosures. For added privacy, international entrepreneurs can use registered agents or nominee managers to shield their identities further.
Business Support Infrastructure
Wyoming’s legal and business framework caters to the needs of international entrepreneurs. The state offers strong protections for LLC members and keeps reporting requirements to a minimum. This streamlined environment allows business owners to focus on growth instead of navigating excessive formalities.
"With straightforward regulations, low fees and strong privacy laws, Wyoming makes running an LLC simple and efficient. For international business owners, this means fewer formalities, no state taxes and a structure that works well no matter where you live. Instead of dealing with extra paperwork and costs, you can focus on growing your business." – Vincenzo Villamena, CPA & founder of Entity Inc.
2. Delaware
Delaware stands out as a leading choice for forming international LLCs, right behind Wyoming. Known as a corporate hub, Delaware is home to over 60% of Fortune 500 companies. For international entrepreneurs, it offers enticing tax advantages, a straightforward formation process, and a legal system designed to support businesses. These features make it a go-to destination for LLC formation.
Tax Structure
Delaware’s tax policies are particularly appealing to international business owners. For starters, there’s no state income tax on companies that don’t operate within Delaware. This makes it especially attractive for entrepreneurs running businesses outside the state. On top of that, Delaware doesn’t charge sales tax or tax on intangible assets. Non-resident owners also avoid personal income tax on distributions or dividends from their LLCs.
Additionally, Delaware offers flexibility in calculating franchise taxes. Businesses can select between two methods, and many small companies end up paying as little as $225 per year.
Here’s how Delaware’s tax policies compare to other states:
| State | Corporate Income Tax | Sales Tax | Franchise Tax Flexibility | Tax on Intangible Assets |
|---|---|---|---|---|
| Delaware | On in-state income only | 0% | Yes (2 methods) | No |
| California | 8.84% flat rate | 7.25% base + local | No | Yes |
| Texas | No CIT, but 1% franchise | 6.25% base + local | No | Yes |
| Florida | 5.5% | 6% base + local | Limited | Yes |
| New York | 7.25% state (up to 10.25%) | 4% state + local | No | Yes |
Formation Process for Non-Residents
Setting up an LLC in Delaware is straightforward, even for international entrepreneurs. You don’t need to be a U.S. citizen or resident to form an LLC here. In fact, the entire process can be completed remotely.
"You do not have to live in, or even visit, the State of Delaware in order to form a Delaware company."
– Harvard Business Services, Inc.
Delaware processes over 230,000 new LLCs annually from both domestic and international founders. To get started, non-residents need to hire a Delaware Registered Agent and obtain an EIN from the IRS. The filing fee for the Certificate of Formation ranges between $90 and $300, depending on how quickly you want it processed. If you wish to reserve a business name, it costs $75.
Privacy Protections
Delaware provides a balance between transparency and privacy, which is ideal for international entrepreneurs. Non-U.S. residents can serve as LLC members or managers, and the state offers privacy protections that align with long-term business planning. This legal framework ensures that founders can operate with confidence while maintaining a level of discretion.
Business Environment
Delaware has earned its reputation as the corporate capital of the U.S. thanks to its sophisticated legal system and business-friendly regulations. A key advantage is the Delaware Court of Chancery, which focuses exclusively on corporate law. This court is known for its expertise in handling business disputes.
"Delaware is the most popular choice due to its business-friendly laws, established legal system, and the Delaware Court of Chancery, which specializes in corporate law."
– Harvard Business Services, Inc.
Delaware also has a long history with LLCs – it was the first U.S. state to offer LLC formation back in 1991. Over the years, it has refined its processes, giving it a significant edge in the business world.
With its tax benefits, efficient formation process, and robust legal system, Delaware offers international entrepreneurs a reliable foundation for their businesses. It’s no wonder companies from around the globe continue to choose Delaware as their base.
3. Nevada
Nevada is home to more than 330,000 active LLCs, with over 30% formed by international owners. The state’s appealing mix of tax perks, robust privacy measures, and efficient processes makes it a standout option for global entrepreneurs looking to set up shop in the U.S.
Tax Advantages
Nevada is one of just nine states that doesn’t impose a state income tax. On top of that, there are no corporate income or franchise taxes, which can significantly cut down on operational expenses. For businesses with annual gross revenues exceeding $4 million, the Nevada Commerce Tax applies, but most smaller businesses fall below this threshold and are exempt.
The state also boasts a relatively low sales tax rate, along with industry-specific exemptions. These financial incentives can be particularly appealing to international founders seeking to minimize costs.
"Nevada’s business-friendly laws create an environment where SMBs can not only survive but thrive. With no state income tax, tax incentives, low regulatory burdens, and strong asset protections, Nevada provides the ideal environment for businesses to grow." – Commenda.io
These tax benefits align perfectly with Nevada’s strong commitment to protecting business owners’ privacy.
Privacy Protections
Nevada is known for offering some of the strongest privacy protections in the U.S. Unlike many states, Nevada does not require LLC owners to disclose member or manager names in the Articles of Organization. This allows international entrepreneurs to maintain anonymity in public records. By safeguarding sensitive personal details, Nevada ensures that LLC owners can keep their business structures private, a major draw for those prioritizing confidentiality.
This emphasis on privacy is complemented by Nevada’s efficient and straightforward registration process.
Registration Process
Setting up an LLC in Nevada involves a few key steps: selecting a business name, appointing a registered agent, filing Articles of Organization, and obtaining an EIN from the IRS. For those without a physical address in Nevada, using a registered agent service is essential. The total cost to establish a foreign LLC is $425, which includes the foreign LLC registration fee ($75), the Initial List of Managers or Members ($150), and the State Business License Application ($200). Nevada also offers expedited filings, with many applications processed within 24 hours.
Business Infrastructure
Nevada’s business-friendly environment extends to its infrastructure and legal protections. The state consistently ranks among the top five in the nation for supporting international LLCs.
Here’s a quick comparison of how Nevada stacks up against other popular states for LLC formation:
| Feature | Nevada | Delaware | Wyoming | Florida |
|---|---|---|---|---|
| State Income Tax | None | None | None | None (for individuals) |
| Annual Report Fee | $350 ($200 license + $150 list) | $300 | $60 | $138.75 |
| Privacy for Owners | Strong | Strong | Strong | Moderate |
| Commerce Tax Threshold | $4M gross revenue | N/A | N/A | N/A |
Another notable advantage is that Nevada does not require a Certificate of Good Standing from the home state when registering a foreign LLC.
"Nevada is a great place to register your LLC. Not only is it a private state for business owners, but the tax benefits are very attractive too." – John Donovan, Author
For international founders, consulting a U.S. business attorney or CPA is highly recommended to ensure compliance with IRS and state regulations. With its tax perks, strong privacy policies, and supportive business infrastructure, Nevada is an excellent choice for those looking to establish a U.S. presence.
4. Florida
Florida has become a magnet for international entrepreneurs, with a surge in foreign-owned LLCs and a thriving business landscape in 2023. The state is home to over 2.8 million small businesses, many of which opt for the LLC structure due to its affordable fees and business-friendly regulations.
Tax Advantages
Florida’s tax policies offer notable perks for international business owners. With no state income tax, LLC owners can save thousands of dollars annually compared to states like California, where personal income tax rates climb as high as 13.3%. Florida LLCs also benefit from pass-through taxation, which eliminates the burden of double taxation. On top of that, the state imposes a modest 6% sales tax on goods and taxable services, with no default corporate tax at the state level.
By keeping meticulous records of expenses such as office rent, equipment, and insurance, international founders can maximize their deductions. For those earning higher incomes, electing S-corp status can further reduce self-employment taxes. According to Forbes, Florida’s favorable tax environment and streamlined business regulations make it a top choice for entrepreneurs.
LLC Formation Process
Setting up an LLC in Florida is straightforward, even for non-U.S. residents. Entrepreneurs can establish their businesses without needing to reside in Florida or the United States. The process includes:
- A low filing fee of $125, making it one of the most economical options among business-friendly states.
- Multiple filing methods: in-person, by mail, or online.
- A requirement to appoint a registered agent for non-U.S. residents.
- Filing Form SS-4 to obtain an EIN (Employer Identification Number).
- An annual report fee of $138.75.
- A BOI Report filing within 30 days for businesses formed after March 26, 2025.
Business Infrastructure
Florida’s robust infrastructure makes it an ideal choice for international entrepreneurs aiming to build a U.S. presence. The state saw over 300,000 new residents in 2023, making it the fastest-growing state in the nation and fueling market expansion. Florida’s tech sector grew by 9% in 2023, with fintech and cybersecurity leading the way. Startups in the state secured over $6 billion in venture capital funding that year, and Southeast Florida alone contributed 38.7% of the state’s finance GDP while attracting nearly 94% of all venture capital raised statewide.
Prominent companies have also taken notice. In 2021, Blackstone, one of the largest investment firms globally, relocated to Miami. That same year, Goldman Sachs announced its plans to expand its presence in West Palm Beach, focusing on asset and wealth management. Additionally, Paysafe, a global payment solutions provider, moved its U.S. headquarters to St. Petersburg from Texas.
"Florida’s tax policies create a compelling environment for businesses looking to grow without excessive overhead. Entrepreneurs starting an LLC in Florida can benefit significantly from reduced compliance costs and tax liabilities." – Andrew Pierce, CEO of LLC Attorney
Florida’s appeal is further strengthened by its extensive network of airports and seaports, which support international trade. In 2023, commercial real estate transactions in the state hit $25 billion, highlighting its dynamic business climate.
Business Support Systems
Florida offers a supportive environment for international entrepreneurs. With no payroll tax or personal income tax, business owners enjoy additional cost savings. The state’s pro-business mindset, relaxed regulations, and targeted incentives for foreign businesses create fertile ground for international LLCs. Moreover, commercial rental rates in Florida are significantly lower than in major hubs like New York, helping to keep operating costs in check.
For international founders, consulting with a tax expert familiar with both U.S. and international tax laws is highly recommended. This ensures they can fully leverage Florida’s advantages while staying compliant. These factors position Florida as a top contender for LLC formation, as we’ll explore further in the state-by-state comparison.
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5. Texas
With a GDP of $2.3 trillion in 2023, Texas ranks as the world’s 8th largest economy and has been recognized as the best state for business for two decades straight. It also leads in foreign direct investment, making it a standout option for international entrepreneurs looking to form an LLC in the U.S. The state’s blend of tax incentives and a streamlined regulatory system makes it a compelling choice for business ventures.
Tax Advantages
One of Texas’s biggest draws is its tax-friendly environment. The state has no state income tax, which translates to significant savings for both businesses and individuals. For new businesses, the franchise tax structure is especially appealing – companies earning under $1.23 million are completely exempt from paying franchise tax.
The LLC formation fee in Texas is $300, and while there’s no state income tax, international founders should consider tax treaties between their home country and the U.S. to avoid double taxation. Consulting a tax professional is highly recommended to ensure compliance and maximize benefits.
Registration Requirements
Texas keeps things simple when it comes to registration, a big plus for international entrepreneurs. Setting up an LLC comes with a $300 formation fee, placing it in a competitive range for business-friendly states. However, if your company was formed outside of Texas but operates within the state, it’s considered a foreign entity. In this case, you’ll need to register with the Texas Secretary of State, which involves a one-time fee of $750.
Foreign entities are also subject to state franchise taxes and federal income taxes. Failing to register can result in legal and financial penalties, so it’s crucial to meet these requirements if you plan to operate in Texas.
Privacy Laws
Texas is stepping up its privacy protections with the Texas Data Privacy and Security Act, which takes effect on July 1, 2024. This law grants residents control over their personal data and enforces privacy measures for businesses operating in the state. It applies to companies that handle Texas residents’ personal data, requiring them to provide clear Privacy Notices, implement strong data security practices, and respect consumer rights like data correction, deletion, and opt-out requests.
Small businesses are generally exempt unless they sell sensitive consumer data, which requires explicit consent. For international founders, understanding and complying with these privacy laws is essential to avoid potential issues.
Business Infrastructure
Texas offers unmatched infrastructure benefits for international businesses. As the top U.S. exporter for 21 consecutive years, the state generated over $440 billion in exports last year alone. Its strategic location connects businesses to global markets via the Texas Multimodal Freight Network, which handles billions of tons of freight annually. With over 350 airports, Texas ensures seamless international connectivity for businesses.
The state also boasts a labor force of more than 15 million people, providing a deep talent pool for companies of all sizes.
"Ranked as the best state for doing business for 20 years, Texas is number one for the most new jobs, number one for economic development, and number one as the best state to start a new business." – Governor George Abbott
Texas’s dominance in foreign direct investment underscores its appeal. With its strategic location, extensive transportation networks, and pro-business policies, Texas creates a thriving environment for international entrepreneurs looking to establish their U.S. presence through LLC formation.
State-by-State Comparison
Choosing the right state for your LLC involves weighing factors like costs, taxes, privacy, and ease of formation. Here’s how some states stack up:
Formation and Annual Costs
The cost to form and maintain an LLC varies widely across states:
- Wyoming: Offers one of the most affordable options, with a $100 filing fee and a $60 annual fee.
- Delaware: Charges a $110 formation fee and a $300 annual franchise tax.
- Nevada: Has the highest filing fee at $425, with annual fees ranging from $200 to $350.
- Florida: Requires a $125 filing fee and an annual fee of $138.75.
- Texas: Costs $300 to form an LLC, but there are no annual fees.
Tax Landscape
State tax policies can have a huge impact on your LLC’s bottom line:
- Wyoming, Florida, and Texas: No state income tax.
- Nevada: No corporate or personal income taxes.
- Delaware: No state income tax, but LLCs must pay an annual franchise tax.
Privacy and Legal Protections
Some states stand out for their privacy safeguards and legal advantages:
- Wyoming and Nevada: Protect member privacy by not requiring public disclosure of LLC ownership details.
- Delaware: Offers a specialized Court of Chancery for business disputes, providing strong legal protections. However, it doesn’t prioritize privacy as much as Wyoming or Nevada.
- Florida and Texas: Privacy is generally not a major focus in these states.
Here’s a quick comparison of these factors:
| State | Filing Fee | Annual Fee | Tax Consideration | Privacy Level | Key Advantage |
|---|---|---|---|---|---|
| Wyoming | $100 | $60 | No state income tax | High | Lowest overall costs |
| Delaware | $110 | $300 (franchise tax) | No state income tax; franchise tax required | Moderate | Business court system |
| Nevada | $425 | $200–$350 | No corporate or personal income tax | High | Strong privacy protections |
| Florida | $125 | $138.75 | No state income tax | Moderate | Quick online formation |
| Texas | $300 | $0 | No state income tax | Moderate | No annual fees |
Formation Requirements and Ease
All five states make it easy for non-residents to form an LLC. You don’t need U.S. citizenship or physical presence, but you’ll need to:
- Designate a registered agent.
- Provide a U.S. address.
- Obtain an EIN (Employer Identification Number).
Florida stands out for its streamlined online formation process, while Delaware offers a well-established business infrastructure.
Strategic Considerations
The best state for forming your LLC depends largely on your business goals:
- Wyoming and Nevada: Ideal for online businesses that value privacy and low recurring costs.
- Delaware: A top choice for businesses planning to raise capital – over 50% of U.S. publicly traded companies and 60% of Fortune 500 companies are incorporated here.
- Texas and Florida: Great for businesses with physical operations, thanks to their favorable tax policies.
For international founders running online businesses without U.S.-based employees or customers, Wyoming often offers the best mix of affordability, privacy, and tax benefits. However, if your LLC will have a physical presence or hire employees, registering in the state where you operate is usually the most practical option. Tailor your choice to your business model to get the most out of your LLC.
Conclusion
Choosing the right state for your LLC depends on your business needs and long-term goals. Each state brings its own advantages: Wyoming is known for being budget-friendly and offering strong privacy protections, Delaware is a favorite for businesses seeking investment opportunities, Nevada prioritizes privacy, Florida simplifies online formation, and Texas eliminates annual fees.
When making your decision, weigh factors like total ownership costs, compliance requirements, and the location where your business operates. The details outlined earlier can help you match a state’s benefits to your specific needs.
Be sure to account for expenses, compliance obligations, and privacy concerns. It’s also wise to consult with legal and tax professionals to fully understand the implications of establishing an LLC in a particular state. Regardless of your choice, staying compliant with both state and federal regulations is crucial.
Ultimately, your decision should align with your business’s current operations and future aspirations. Select the state that best supports your business model and growth objectives.
FAQs
What should international entrepreneurs consider when choosing a U.S. state to form an LLC?
When choosing where to establish an LLC in the U.S., international entrepreneurs need to weigh several important factors to make the right decision for their business. Start with location – if your business will have a physical presence, most states require you to register your LLC there. Next, examine state-specific perks like tax breaks, privacy protections, and regulations that favor businesses. States such as Delaware, Wyoming, and Nevada are often go-to choices for their business-friendly policies.
It’s also essential to consider costs, including registration fees, annual taxes, and ongoing compliance expenses. If your business will primarily operate in a single state, forming your LLC there is usually the easiest and most cost-effective route. By evaluating these aspects, you can choose a state that best supports your business ambitions as an international entrepreneur.
What are the differences in privacy protections for LLCs in Wyoming, Delaware, and Nevada?
Wyoming stands out for its strong privacy policies, allowing LLCs to keep the names of their members and managers confidential. This ensures a high degree of anonymity for business owners. Delaware also supports anonymous LLC formation, though certain situations – like working with banks or handling legal matters – might require some disclosures. Nevada offers solid privacy protections as well, but it falls slightly behind Wyoming because it mandates the disclosure of some ownership and management details.
For international entrepreneurs, Wyoming often emerges as the preferred option thanks to its straightforward processes and emphasis on privacy, making it an ideal choice for those who value discretion.
Why do international entrepreneurs often prefer forming LLCs in Florida or Texas?
International entrepreneurs often gravitate toward Florida and Texas when setting up LLCs, and it’s easy to see why. Both states offer tax-friendly policies, including no personal state income tax, which allows business owners to keep more of their earnings. On top of that, the costs for forming and maintaining an LLC in these states are relatively low, making them attractive choices for non-residents looking for affordability.
Another key advantage is their simple and accessible regulations, which make the process of starting a business less daunting for international founders. Add to this their strong infrastructure and thriving, diverse economies, and you’ve got two states that provide a solid foundation for businesses aiming to establish themselves in the U.S. market.
