The best state to form an LLC is usually the state where you live and run the business, because an LLC formed elsewhere still has to register as a foreign LLC at home, so you pay both states every year. Delaware ($110 to form and a $400 annual tax, per the Delaware Division of Corporations fee schedule revised August 1, 2026) makes sense for companies raising outside capital or with complex ownership. Wyoming ($100 to form and a $60 minimum annual report, according to the Wyoming Secretary of State) suits holding companies, privacy-minded owners, and founders with no US home state.
Best for founders who want an LLC price that includes the state filing fee: Rho, at $349 all in.
We compare states on formation cost, annual cost, privacy, and legal infrastructure, and formation options on price and what's included. Delaware, Wyoming, and Nevada each make sense in specific situations, covered below, but the default answer is home.
If you live and operate in one state, form your LLC there. An out-of-state LLC still has to register as a foreign LLC in your home state, so you pay both states' fees, maintain two registered agents, and file twice the paperwork.
Delaware makes sense if you are raising institutional capital or expect complex multi-member ownership. It charges $110 to form an LLC and a $400 annual tax due June 1, per the Delaware Division of Corporations fee schedule revised August 1, 2026.
Wyoming is the low-cost, high-privacy option: $100 to form and a $60 minimum annual report, according to the Wyoming Secretary of State, with no state income tax, and its articles of organization don't ask for member or manager names.
Nevada charges $425 to form ($75 articles, $150 initial list, $200 state business license) and $350 a year after, under Nevada law, which makes it hard to justify over Wyoming.
Non-US residents are the big exception to the home-state rule, since they have no home state. Delaware and Wyoming are the standard choices.
Why your home state usually wins
An LLC does not free you from the rules of the state where you actually do business. States regulate and tax activity that happens inside their borders, regardless of where your entity is registered.
Say you live in California and form a Wyoming LLC to avoid California costs. The moment that LLC does business in California, which includes you running it from your living room, California requires it to register as a foreign LLC and pay the state's $800 minimum annual franchise tax anyway. Now you are paying Wyoming's fees and California's, plus two registered agents, and you have gained nothing. Skipping the registration is not a loophole either: it exposes you to penalties and can prevent your LLC from enforcing contracts in your home state's courts.
The same logic applies in every state. Out-of-state formation does not reduce your home state income taxes, does not exempt you from local licenses, and does not hide you from your own state's tax authority. What it reliably does is double your annual compliance cost.
So the honest framework is simple: form at home unless you fall into one of the exceptions below.
Delaware vs Wyoming vs Nevada vs your home state
Delaware | Wyoming | Nevada | Your home state | |
|---|---|---|---|---|
Filing fee | $110 | $100 | $425 total ($75 articles + $150 initial list + $200 state business license) | Varies by state (for example, $35 in Montana, $500 in Massachusetts) |
Annual cost | $400 annual tax, due June 1 | $60 minimum annual report | $350 ($150 annual list + $200 business license renewal) | Varies by state (California charges LLCs an $800 annual tax) |
State income tax on LLC income | None on income earned outside Delaware | None | None | Your normal state rates |
Privacy | Members not listed on formation filing | Articles of organization don't ask for member or manager names | Managers or managing members listed on the initial and annual lists | Most states list members or organizers |
Courts and case law | Court of Chancery, deepest business case law in the US | Standard state courts, business-friendly statutes | Business court program, far less precedent than Delaware | Varies |
Best for | Startups raising capital, complex ownership | Low-cost holding companies, privacy, non-residents | Rarely the best answer at current prices | Almost everyone else |
Delaware figures are per the Delaware Division of Corporations fee schedule revised August 1, 2026; Wyoming figures are from the Wyoming Secretary of State; Nevada figures are from the Nevada Revised Statutes; Montana, Massachusetts, and California figures are from each state's own fee schedule or tax agency, all as of October 17, 2026. Delaware's LLC annual tax is $400, so older comparisons that quote a lower figure understate the gap between Delaware and Wyoming.
When Delaware makes sense
Delaware earns its reputation for one audience in particular: companies with outside investors. Its Court of Chancery decides business disputes quickly with expert judges and no juries, its LLC statute gives members almost total freedom of contract, and decades of case law make outcomes predictable. Investors, lawyers, and lenders all know Delaware paperwork on sight.
If that is you, our step-by-step Delaware LLC formation guide covers the whole process. One caveat before you start: founders planning to raise venture capital usually should not be forming an LLC at all. VCs invest in Delaware C corporations, and starting as an LLC means a costly conversion later.
When Wyoming makes sense
Wyoming invented the LLC in 1977 and remains the cheapest serious option: $100 to form, a $60 minimum annual report, no state income tax, and no corporate presence requirements. Its biggest differentiator is privacy. Wyoming's articles of organization don't ask for member or manager names, which is why it is the default for anonymous holding companies and asset-protection structures.
Wyoming is a strong choice for holding companies, real estate entities, online businesses with no fixed operating state, and non-US founders who do not need Delaware's legal machinery. For a detailed head-to-head, see Delaware vs Wyoming LLC.
When Nevada makes sense
Nevada built a business-friendly brand on no state income tax and strong charging-order protection, but the math has stopped working. Between the articles of organization, the initial list of managers, and the mandatory state business license, forming a Nevada LLC costs $425, and the annual list plus license renewal run $350 every year after. Managers or managing members also appear on the initial and annual lists, so the privacy pitch is weaker than Wyoming's.
Unless you actually live or operate in Nevada, Wyoming delivers the same core benefits at a fraction of the price.
The exceptions to the home-state rule
You are raising institutional capital. Investors expect Delaware. If venture capital is the plan, talk to your counsel about a Delaware C corp rather than an LLC.
You are a non-US resident. With no home state, you get to pick, and Delaware and Wyoming are the standard answers. Our guide to Delaware LLCs for non-US residents covers EINs, taxes, and banking.
You need anonymity. Wyoming's articles of organization don't ask for member or manager names, and an attorney can design a layered structure if you need more privacy than that.
You have no fixed operating state. Fully remote businesses with no office or employees anywhere specific have a genuine choice, and usually pick Wyoming on cost or Delaware on legal infrastructure.
Real estate investors. Common practice is to form the LLC in the state where the property sits, since that state's registration is unavoidable anyway.
Whatever state you pick, separate your finances
The state you choose matters less than what you do after formation. Keep business and personal money separate from day one, because commingled funds are the most common way owners lose the liability protection an LLC exists to provide. How your LLC's profits are taxed also follows you, not your formation state; our LLC tax rates guide explains how pass-through taxation works.
Once your LLC is formed and you have an EIN, compare business bank accounts in our roundup of the best online business bank accounts, including the Rho banking platform.
Where Rho fits
If you haven't formed yet, Rho Incorporation forms LLCs for $349 all in, state filing fee included.
If your plans point to a Delaware C-corp instead, Rho forms those for $400. When you incorporate a Delaware C-corp with Rho, every formation document is reviewed by a licensed attorney, your EIN application is filed for you, and your business account opens in the same flow, subject to approval. Funds can't move until your EIN is issued and attached to your account. To open a Rho account this way, your company needs at least one US-based owner or officer, a US operating address, and a business in an industry Rho supports.