When foreign nationals ask which US state to form their LLC in, the answer almost always comes down to two options: Wyoming or Delaware. Both are popular with non-US founders, both have business-friendly laws, and both allow you to operate your company from anywhere in the world. But they serve different needs — and choosing the wrong one can cost you money and headaches down the road.
This guide breaks down the key differences so you can make the right decision for your specific situation.
Why Does the State Matter?
You might wonder: if I'm not physically in the US, why does the state matter at all?
It matters for several reasons:
- Annual fees and taxes vary significantly between states
- Privacy protections differ — some states publicly list member names, others don't
- Legal frameworks affect how your LLC is treated in disputes
- Investor preferences — some VCs require Delaware entities
You can register your LLC in any state regardless of where you live or where you do business. Most foreign-owned LLCs register in Wyoming or Delaware specifically because they offer advantages not found in other states.
Wyoming LLC — The Case For
Wyoming has become the default choice for international entrepreneurs, and for good reason.
No State Income Tax
Wyoming has no state income tax. For a foreign-owned single-member LLC that's treated as a disregarded entity, this means your federal tax burden may already be zero or minimal — and Wyoming adds nothing on top.
No Franchise Tax
Delaware charges an annual franchise tax that can range from a few hundred to several thousand dollars depending on your authorized shares and company value. Wyoming charges no franchise tax at all.
Strong Privacy Protections
Wyoming does not require member names to be publicly listed in state records. Your name stays off the public registry. For foreign founders who value privacy — whether for personal security reasons or to keep business structures confidential — this is a meaningful advantage.
Low Annual Fee
Wyoming's annual report fee is approximately $60 regardless of your company's revenue. This makes it one of the cheapest states to maintain an LLC.
Simple Formation
Wyoming's formation process is straightforward. Articles of Organization can be filed quickly, and the state has a well-organized system for foreign-owned entities.
Delaware LLC — The Case For
Delaware is the most popular state for US domestic companies, home to more than 60% of Fortune 500 companies. Its advantages are real — but they're primarily relevant to a specific type of business.
The Court of Chancery
Delaware's biggest advantage is its Court of Chancery — a specialized business court with over 200 years of corporate case law. This predictability is why major corporations and institutional investors prefer Delaware entities. If your legal dispute goes to court, Delaware's corporate law is extensively documented.
Venture Capital Preference
If you plan to raise venture capital or institutional funding, many US investors and law firms strongly prefer Delaware C-Corps or LLCs. The legal infrastructure for term sheets, convertible notes, and equity agreements is built around Delaware law.
Established Infrastructure
Delaware has a massive ecosystem of lawyers, accountants, and service providers who understand its corporate law intimately. If you need legal work done, you'll find no shortage of experts.
State Comparison at a Glance
| Factor | Wyoming | Delaware |
|---|---|---|
| Annual report fee (state) | ~$60/year | $300+/year |
| Franchise tax | None | Varies (can reach thousands) |
| Privacy (member names) | Private | Public (by default) |
| State income tax | None | None (on out-of-state income) |
| Court system | General courts | Specialized Court of Chancery |
Wyoming's substantially lower annual state fees make it the more cost-effective ongoing choice for most international founders. For our formation service pricing, view our full pricing at setupusllc.com/en/pricing →
Who Should Choose Wyoming?
Choose Wyoming if you are:
- A foreign national running a service business, agency, consulting practice, SaaS, or e-commerce store
- Not planning to raise VC funding in the near future
- Prioritizing privacy and wanting to keep your name off public records
- Looking for the lowest ongoing cost of maintaining a US entity
- Running a single-member LLC where simplicity matters
Wyoming is the right choice for the vast majority of international founders.
Who Should Choose Delaware?
Choose Delaware if you are:
- Planning to raise venture capital from US institutional investors
- Building a startup that may go through Y Combinator, a US accelerator, or other programs that expect a Delaware entity
- Expecting significant litigation or complex legal work where Delaware case law matters
- Planning to issue equity to employees or investors using standard US startup legal structures
If there's any chance you'll raise VC funding within the next 2–3 years, Delaware is worth the extra cost. But if that's not your path, Wyoming wins on every other metric.
Can You Convert Later?
Yes. It's possible to convert (or "domesticate") an LLC from Wyoming to Delaware if your needs change. However, this process takes time, costs money, and can create complications — including the need to update your EIN, operating agreement, and bank accounts.
It's easier to start in the right state from the beginning.
The Bottom Line
For foreign nationals forming a US LLC in 2026 to run an online business, agency, e-commerce store, or professional services practice — Wyoming is the better choice. It's cheaper, more private, and just as legitimate as Delaware for your purposes.
Delaware makes sense only if you're specifically targeting venture capital or building a startup that will need the standard US investment legal infrastructure.
Not sure which is right for your specific situation? Our Complete US LLC Package starts at €1,000 and works for both Wyoming and Delaware formation. View our full pricing at setupusllc.com/en/pricing →
Book a free consultation with Aleksandar and get a personalized recommendation based on your business goals.
