Which U.S. State is Better for Me?
The best U.S. state for your LLC depends on your business goals, where you operate, and your preferences for taxes, privacy, and compliance. Here’s a breakdown to help you decide:
1. Wyoming
- Best for: Non-residents looking for low costs and simplicity.
- Why?
- No state income tax.
- Low annual report fee ($60 minimum).
- No requirement to disclose owners publicly.
- Strong privacy protections.
2. New Mexico
- Best for: Cost-conscious businesses with minimal compliance needs.
- Why?
- No annual report or franchise tax.
- Low formation and renewal costs.
- Privacy-friendly (no public owner disclosure).
- Excellent choice for a lean and straightforward setup.
3. Delaware
- Best for: Businesses planning to raise funds, work with investors, or scale globally.
- Why?
- Well-known for being business-friendly with a specialized Court of Chancery for resolving disputes.
- No sales tax and no tax on out-of-state income.
- Flat $300 franchise tax for LLCs.
4. Montana
- Best for: Businesses without a physical U.S. presence and minimal in-state compliance needs.
- Why?
- No sales tax.
- Low annual report fee ($20).
- Straightforward compliance.
Factors to Consider When Choosing a State:
- Physical Presence:
- If your business has a physical location (e.g., office, employees) in a specific state, you should register there.
- Operating outside your formation state may require you to file as a “foreign entity” in the states where you do business.
- Sales Tax:
- States like Delaware, Montana, and Oregon don’t have sales tax, which can be advantageous if you’re selling products.
- Privacy:
- States like Wyoming and New Mexico offer privacy by not requiring owner details to be publicly disclosed.
- Cost:
- Compare filing fees, annual reports, and franchise taxes in each state.
Our Recommendation:
- If you are a non-resident running an online-only business and need simplicity, Wyoming is an excellent choice.
- If you value privacy and cost savings, New Mexico is a fantastic second option.
- If you plan to scale and attract investors, Delaware is the gold standard.
Let us know more about your business, and we can provide tailored advice!