Gokce Tandogdu
ITIN Specialist, itin.net
The right answer depends on what you are building. For most non-resident founders, Wyoming is the default. For venture-backed startups, Delaware. For cost-sensitive solo founders, New Mexico. Avoid California, New York, Texas, and your future state of U.S. residence unless you have a specific reason to file there.
Wyoming. Low formation fee (around $100), low annual report fee (around $60), no state income tax, members are not listed in public filings. Wyoming is the strongest combination of cost, privacy, and recognition by U.S. fintech banks. This is the default recommendation for non-resident-owned LLCs running e-commerce, SaaS, agency, or content businesses.
Delaware. The state of choice for venture-backed companies because the Court of Chancery has the deepest body of corporate case law in the U.S. If you are raising or plan to raise U.S. venture capital, investors will expect a Delaware entity. The franchise tax minimum is $300 per year and the formation fees are higher than Wyoming. For non-resident founders not raising venture capital, Delaware is overpriced for what you get.
New Mexico. Cheapest of the three. Formation is around $50, there is no annual report, and members are not listed in public filings. The trade-off is slightly less recognition at U.S. fintech banks compared to Wyoming, though Mercury and Relay routinely open New Mexico LLCs. For cost-sensitive founders, New Mexico is a strong option.
States to avoid as a non-resident. California has an $800 annual franchise tax and aggressive nexus rules. New York requires publication in two newspapers (an expensive multi-week process). Texas has the Texas franchise tax and margin tax requirements. Filing in your future state of U.S. residence (if you plan to move) is also rarely the right move — that is a separate filing for a separate purpose.
Comparison at a glance:
| State | Formation fee | Annual cost | Member privacy | Best for |
|---|---|---|---|---|
| Wyoming | ~$100 | ~$60 | Yes | Default for most non-resident founders |
| Delaware | ~$90 | $300+ franchise tax | Limited | Venture-backed startups |
| New Mexico | ~$50 | $0 (no annual report) | Yes | Cost-sensitive founders |
What the choice does not affect. Picking a state does not change your U.S. federal tax treatment. A single-member foreign-owned LLC is a disregarded entity for U.S. federal tax purposes regardless of state. The required Form 5472 / pro forma 1120 filing applies equally in all three states. Picking a state changes formation cost, annual cost, privacy, and the body of state corporate law that governs your LLC — not U.S. federal tax.
For most non-resident clients we form in Wyoming unless there is a specific reason to file elsewhere.