US Formation
Expert State Comparison

Delaware vs Wyoming

Which state is better for non-US residents? Compare the two most popular states for US company formation and discover which one suits your business needs.

Quick Comparison

At a glance: Key differences between Delaware and Wyoming

Wyoming LLC

Best for Small Businesses

No state income tax
Annual fee: $65
Strong privacy protection
Excellent asset protection
Low formation costs
$65
Annual state fee

Delaware LLC

Best for Larger Companies

No sales tax
Annual fee: $300
Court of Chancery
Business-friendly laws
Investor preference
$300
Annual state fee

Why Wyoming is Great for Your Business

Wyoming invented the American LLC in 1977 and offers unmatched benefits for entrepreneurs

Lowest Taxes

No state income tax, no corporate income tax, no franchise tax. Wyoming has the lowest taxes in the US.

Asset Protection

Excellent asset protection laws, especially for single-member LLCs. Strong charging order protection.

Privacy Protection

Strong privacy laws. Annual reports only require one person's name and signature.

Low Costs

Formation fee of $102 and annual report fee of only $65. Very cost-effective for small businesses.

Why Delaware Attracts Larger Companies

Delaware is home to over 60% of Fortune 500 companies for good reasons

Court of Chancery

Specialized business court with expert judges, not juries. Established in 1792 for corporate disputes.

Business Flexibility

Flexible corporate laws for structuring corporations and board members. Custom operating agreements.

Tax Benefits

No sales tax. No state income tax for companies operating outside Delaware. Business-friendly tax laws.

Investor Preference

Preferred by investors and venture capitalists. Well-established legal precedents for business law.

Which State is Better for YOU?

Choose Wyoming if:

  • You're a small to medium business
  • You want the lowest possible costs
  • Privacy is important to you
  • You need strong asset protection
  • You want minimal ongoing compliance

Choose Delaware if:

  • You plan to raise investor funding
  • You want to convert to a corporation later
  • You need complex business structures
  • You value the Delaware brand prestige
  • You run a dropshipping business (no sales tax)

Our Recommendation

For most non-US residents and small businesses, Wyoming offers greater benefits with increased privacy, lower taxes, and significantly lower ongoing costs. Delaware is better suited for larger corporations that plan to raise capital or need complex legal structures.

The History Behind the Choice

Understanding how these states became business formation leaders

Wyoming: The Original LLC Innovator

Wyoming created the American LLC in 1977, modeling it after the German Gesellschaft mit beschränkter Haftung (GmbH) from 1892. This makes Wyoming the original and most experienced LLC jurisdiction in the United States.

While Delaware later adopted Wyoming's LLC concept and marketed it more aggressively, Wyoming has continuously refined its laws to remain the most business-friendly state. Many Wall Street companies choose Wyoming for their LLC structures.

Wyoming's liberal Corporation Law enables companies to be established quickly with the broadest possible powers and minimal restrictions on business activities.

Delaware: The Corporate Capital

Delaware established its Court of Chancery in 1792, creating the foundation for its business-friendly legal system. This specialized court handles corporate disputes with expert judges rather than juries.

Over 60% of Fortune 500 companies and 90% of IPOs are incorporated in Delaware. This dominance comes from Delaware's well-developed legal precedents and investor familiarity.

Delaware copied Wyoming's LLC innovation but leveraged its existing corporate reputation and superior marketing to attract larger businesses seeking investment and planning public offerings.

5-Year Cost Comparison

See the total cost of ownership over 5 years for each state

Wyoming LLC - 5 Year Cost

Formation (Year 1)$399
Annual Reports (4 years)$260
Registered Agent (5 years)$495
Total 5-Year Cost$1,154

Note: Registered agent fees vary by provider. This calculation uses our $99/year registered agent fee.

Delaware LLC - 5 Year Cost

Formation (Year 1)$399
Annual Tax (5 years)$1,500
Registered Agent (5 years)$495
Total 5-Year Cost$2,394

Note: Delaware requires $300 annual tax payment. No annual reports needed.

Wyoming saves you $1,240 over 5 years (52% less expensive)

Complete Side-by-Side Comparison

Detailed breakdown of all key factors for LLC formation

FactorWyoming LLCDelaware LLC
Formation Cost$399 all-inclusive package$399 all-inclusive package
Annual State Fee$65$300
State Income TaxNoneNone (if no DE business)
Sales Tax~5% averageNone
Annual Report RequiredYes (simple)No
Privacy ProtectionExcellentGood
Asset ProtectionExcellentGood
Court SystemStandard courtsCourt of Chancery
Investor PreferenceGrowing acceptanceStrongly preferred
Best ForSmall-Medium BusinessLarge Corporations

Frequently Asked Questions

Get answers to the most common questions about Delaware vs Wyoming LLCs

Why is Wyoming considered the best state for LLCs?

Wyoming invented the American LLC in 1977 and has continuously refined its laws to be the most business-friendly. It offers the lowest taxes in the US (no state income tax, no corporate tax, no franchise tax), excellent privacy protection, strong asset protection laws, and the lowest ongoing costs with just a $65 annual fee.

When should I choose Delaware over Wyoming?

Choose Delaware if you plan to raise venture capital or investor funding, as investors and VCs strongly prefer Delaware entities. Delaware is also better if you plan to convert to a C-Corporation later, need complex business structures, or run a dropshipping business (Delaware has no sales tax).

What is Delaware's Court of Chancery and why is it important?

Delaware's Court of Chancery is a specialized business court established in 1792 that handles corporate disputes. Unlike other states, it uses expert judges instead of juries, ensuring knowledgeable decisions on complex business matters. This court system has created extensive legal precedents that make business law more predictable and reliable.

Can I remain anonymous with my LLC in both states?

Both states offer good privacy protection, but Wyoming provides superior anonymity. Wyoming annual reports only require one person's name and signature, and the state has strong privacy laws. Delaware also offers privacy protection, especially when filed through a professional registered agent, but Wyoming's privacy protections are considered among the strongest in the US.

What are the ongoing compliance requirements for each state?

Wyoming requires an annual report filed by the first day of the anniversary month, costing $65. Delaware LLCs don't file annual reports but must pay a $300 annual Alternative Entity Tax. Both states require maintaining a registered agent and keeping corporate records, but Wyoming's requirements are generally simpler.

How do federal taxes work for non-US residents with Wyoming or Delaware LLCs?

Federal tax treatment is the same regardless of state. Single-member LLCs are "disregarded entities" for tax purposes, meaning they're treated as sole proprietorships. Non-US residents typically need to file Form 1040NR for US-source income. Multi-member LLCs file Form 1065. The state of formation doesn't affect federal tax obligations.

Can I change from one state to another later?

Yes, you can convert your LLC from one state to another through a process called "domestication" or by forming a new LLC and transferring assets. However, this process can be complex and costly, involving legal and tax implications. It's better to choose the right state from the beginning based on your long-term business goals.

Ready to register your US company?

We handle the entire process for you, regardless of which state you choose. Get started today with our all-inclusive $399 package.