Delaware and Wyoming are the two states people mean when they talk about forming an LLC somewhere other than home. Delaware is the legal capital of American business. Wyoming invented the LLC and still runs the cheapest, most private version of it.
The right choice depends on one question: will outside investors, lenders, or acquirers ever need to trust your entity's legal plumbing? If yes, Delaware's premium buys you something real. If no, Wyoming does the same job for a fraction of the ongoing cost. Here is the full head-to-head for 2026.
Wyoming is dramatically cheaper to maintain: $100 to form and a $60 minimum annual report, versus Delaware's $110 filing fee and $400 flat annual franchise tax (raised from $300 effective the 2026 tax year).
Wyoming offers true anonymity, since member and manager names stay off public filings. Delaware keeps members off the Certificate of Formation but is less purpose-built for privacy.
Delaware's Court of Chancery and decades of business case law make it the standard for companies with investors, complex ownership, or high dispute risk.
Investors strongly prefer Delaware entities, and venture investors specifically prefer Delaware C corporations over LLCs of any state.
Neither state taxes out-of-state LLC income, and neither choice exempts you from registering and paying taxes in the state where you actually operate.
Costs: Wyoming wins, and the gap just widened
Formation filing fee
$110
Annual state cost
$400 flat franchise tax, due June 1
Annual report contents
None required, just the tax payment
Late penalty
$200 plus 1.5% interest per month
Registered agent
Required, typically $50 to $300/yr
Formation filing fee
$110
$100
Annual state cost
$400 flat franchise tax, due June 1
$60 minimum annual report license tax, due on your anniversary month
Annual report contents
None required, just the tax payment
Asset-based fee: $60 or $0.0002 per dollar of Wyoming-located assets, whichever is greater
Late penalty
$200 plus 1.5% interest per month
Loss of good standing, eventual dissolution
Registered agent
Required, typically $50 to $300/yr
Required, typically $50 to $300/yr
Formation costs are nearly identical, so the real difference is ongoing. Over five years, state fees alone run about $2,000 for a Delaware LLC versus about $300 for a Wyoming LLC. Delaware's HB 400 raised the annual tax from $300 to $400 starting with the 2026 tax year, so the premium for Delaware is now higher than most older comparisons state.
Neither state has a state income tax that touches an LLC operating elsewhere: Wyoming has no income tax at all, and Delaware does not tax LLC income earned outside Delaware.
Privacy: Wyoming by a clear margin
Wyoming is the go-to state for anonymous LLCs. Member and manager names are not required on the articles of organization or the annual report, so ownership stays out of the public record entirely. Combined with a registered agent's address, a Wyoming LLC can keep an owner's name off every public-facing document.
Delaware is private by omission rather than design. The Certificate of Formation lists only the LLC name and registered agent, so members are not published either. But Delaware's ecosystem is built around companies that expect scrutiny from investors and courts, not around anonymity as a feature.
One reality check for both states: banks, the IRS, and federal beneficial-ownership rules still require identifying the humans behind the entity. State-level privacy shields you from casual public searches, not from regulators or courts.
Legal system: Delaware by a mile
Delaware's Court of Chancery is a dedicated business court where expert judges, not juries, decide corporate and LLC disputes, often on an expedited schedule. More than two centuries of corporate case law means nearly every question about fiduciary duties, operating agreement interpretation, or member disputes has an on-point precedent. Delaware's LLC Act also grants close to total freedom of contract, and its courts reliably enforce what sophisticated parties drafted.
Wyoming's statutes are modern and business-friendly, with strong charging-order protection that extends to single-member LLCs. But Wyoming has a thin body of case law, so novel disputes are less predictable. For a single-owner company that never expects litigation, this rarely matters. For a company with co-founders, investors, or valuable assets, predictability is worth paying for.
Investor preference: Delaware, with an asterisk
Ask any startup lawyer or fund which entity they want to see and the answer is Delaware. Diligence is faster because everyone knows Delaware law, and financing documents assume it.
The asterisk: venture investors do not want a Delaware LLC either. They want a Delaware C corporation, which supports preferred stock, option pools, QSBS, and standard SAFE documents. If you form an LLC in either state and later raise institutional money, expect to convert the LLC to a C corp first. Founders who know venture capital is the plan should usually start with the C corp and skip the conversion entirely.
Verdict: which state fits which founder
Bootstrapped online business or agency with no fixed operating state: Wyoming. You get liability protection and privacy at the lowest carrying cost in the country.
Holding company for real estate or investments: Wyoming, for the charging-order protection, anonymity, and $60 annual fee. Form property-specific LLCs in the state where each property sits.
Startup that may raise angel or venture money: Delaware, and honestly, consider a Delaware C corp from day one rather than an LLC. Our Delaware LLC formation guide covers the LLC route if you are sure.
Multi-member company with meaningful revenue or dispute risk: Delaware. The Court of Chancery and settled case law are cheap insurance at $400 per year.
Non-US resident founder: either works; Wyoming wins on cost and privacy, Delaware wins if US investors are in your future. See our guide to Delaware LLCs for non-US residents.
You operate primarily in one US state: neither. Form at home. Our breakdown of the best state to form an LLC explains why out-of-state formation usually backfires for local businesses.
After formation: give the LLC real financial infrastructure
Whichever state you choose, the entity only protects you if you run it like a separate business, and that starts with its own bank account. Rho gives LLCs business checking, corporate cards with up to 2% cashback on the Platinum tier, treasury, expense management, and invoicing in one platform, with an application that takes under 10 minutes. See how it compares in our review of the best online business bank accounts.
If your research ends with "actually, we need a C corp," Rho Incorporation offers attorney-reviewed Delaware C corp formation for $400, refunded when you open a Rho account and maintain a $10,000 average checking balance for 60 days. LLC support is coming soon.
FAQs
Both states let non-residents form LLCs with strong liability protection, no state income tax on out-of-state earnings, and owner names kept off the formation filing. Delaware adds the most respected business court system in the country, while Wyoming adds rock-bottom annual costs and true anonymity. People who operate in one home state usually should not form in either.
Wyoming has a thin body of business case law, so complex disputes are less predictable than in Delaware, and investors give Wyoming entities no special credibility. If you operate in another state you must still register and pay there, erasing most of the savings. Banking can also take extra steps, since some banks want proof of why you formed out of state.
Federally, none: both are pass-through entities by default, taxed the same by the IRS. At the state level, Wyoming has no income tax and only a $60 minimum annual report fee, while Delaware charges a flat $400 annual franchise tax but no income tax on earnings outside Delaware. Your personal state income taxes depend on where you live, not where the LLC is formed.
The $400 annual franchise tax is high compared to states like Wyoming, which charges a $60 minimum annual report fee. If you operate in another state, you must also register there as a foreign LLC, so you pay fees and maintain agents in two states. For most small businesses operating in their home state, Delaware adds cost without adding much benefit.
Low cost, privacy, and asset protection. Wyoming charges $100 to form and $60 per year, requires no member or manager names on public filings, has no state income tax, and extends charging-order protection even to single-member LLCs. That combination makes it the default for holding companies and privacy-focused owners.
There is no single winner. Wyoming has the best cost and privacy profile, Delaware has the best legal system and investor acceptance, and your home state is usually best overall once foreign-registration costs are counted. Match the state to the job: Wyoming for holding and privacy, Delaware for investor-bound companies, home for local operating businesses.
Wyoming is significantly more affordable. It costs $100 to form and requires a $60 minimum annual report fee, while Delaware charges a $110 filing fee and a $400 flat annual franchise tax starting with the 2026 tax year. Over five years, state fees alone run about $2,000 for a Delaware LLC versus roughly $300 for a Wyoming LLC.
Wyoming is the stronger choice for privacy. Member and manager names are not required on the articles of organization or annual report, keeping ownership entirely out of the public record. Delaware keeps members off the Certificate of Formation as well, but its ecosystem is built around investor scrutiny rather than anonymity as a feature.
Delaware has a clear advantage through its Court of Chancery, a dedicated business court where expert judges decide disputes using over two centuries of settled case law. Wyoming's statutes are modern and business-friendly, but its thin body of case law makes novel disputes less predictable, which matters more for companies with co-founders, investors, or valuable assets.
Wyoming extends charging-order protection to single-member LLCs, which limits a creditor's remedy to a lien on distributions rather than allowing seizure of the company or its assets. Delaware's legal system offers predictability and strong contract enforcement, but Wyoming's statutes are more explicitly designed around owner protection.