Wyoming vs Delaware for Non-Resident LLCs: Which is better?

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by LLC.org Team
Last updated: June 10th, 2024

Here we’ll look at the differences between the policies and practices for establishing and operating LLCs in these two states to help you determine which will best meet your needs.

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Whether the owners are residents of the U.S. or a foreign country, when doing business out-of-state, which means outside the state in which your LLC is registered, your company is legally classed as a foreign entity in all U.S. states except the one in which the LLC is registered. That state becomes your business’s domestic state. These classifications apply to all LLCs in the U.S.A., whether a business is owned by a foreign person living in another country or by an American citizen living in the United States.

Key takeaways

  • The processes for registering an LLC in Wyoming and Delaware are virtually the same.

  • There are more notable differences in the costs incurred at some steps of the process, such as filing fees, processing time, annual fees, etc.
  • Delaware offers big advantages for those in pursuit of venture capital and private equity funding.
  • The absence of state sales tax, personal income tax, and state income tax on businesses make Wyoming a better choice for small business owners on limited budgets.
  • Both state governments are among the nation’s foremost knowledgeable authorities on LLC regulatory and civil action and general business law respectively.

What’s different about Delaware and Wyoming LLCs?

Benefits for Delaware LLC owners

These are some of the reasons why the tiny state of Delaware (along with Wyoming) is one of the top two states for LLC formation and operation, even for Fortune 500 companies:

  • Delaware provides an ideal corporate environment for non-resident U.S. LLC members, considered the most desirable location globally for incorporation and corporate administration.
  • The state government has a proven high proficiency in working with Delaware LLCs and corporations, making Delaware a world leader in business registrations.
  • The Delaware Court of Chancery specializes in adjudicating contract disputes and civil cases, offering a stable legal environment with strong asset protection.
  • Smoother legal operations enhance the security of interstate and international business activities.
  • Delaware offers a politically stable business atmosphere, with legal and tax advantages that attract venture capital and private equity investment.
  • The state’s exceptional knowledge of business law ensures timely and accurate adjudication of disputes.
  • Delaware provides superior investment tax benefits compared to other states.
  • It has one of the smoothest processes for managing LLC registration, alongside Wyoming.

Benefits for Wyoming LLC owners

These are some of the reasons why the sparsely populated state of Wyoming is one of the top two states for LLC formation:

  • Wyoming offers the simplest system in the U.S. for registering and maintaining an LLC. The original LLC was created in Wyoming, so this state has the longest experience with this business structure.
  • The LLC filing fees, annual reporting fees, and associated costs are all lower than in other states, making it one of the most cost-effective states for registering LLCs.
  • Wyoming provides stronger asset protection for LLC owners, minimizing their legal risk.
  • Wyoming has low taxes for businesses compared to many other states, with no state income tax on businesses or personal income tax.
  • Wyoming has among the least demanding periodic reporting and documentation systems in the country.
  • Wyoming allows LLC business owners to remain unnamed in public records, protecting their privacy.
  • Wyoming does not charge a franchise tax, saving business owners hundreds of dollars per year compared to other states.

Steps for forming an LLC in Delaware or Wyoming

Choose a name for your business

Find an available approved business name in the state’s database.

Designate a registered agent

As a non-U.S. resident, you must assign a registered agent who lives in the country to act on your behalf in receiving mail and other communications from government agencies. Your state Registered Agent must maintain a physical address in Delaware or Wyoming and be available through standard business hours.

Get a virtual address

You can obtain a virtual business address, which is a physical address for your business.

File Form 1583 with the U.S. Postal Service to authorize your virtual address provider to receive mail for your LLC by linking your registered agent service address to your virtual address. The virtual address offers you privacy protection as an LLC owner, and you can use this address to fill out your LLC documents for submission to the Delaware or Wyoming Secretary of State.

Submit your Certificate of Formation for registration

  • Delaware: File for approval of your Certificate of Formation to establish your business startup as an LLC by sending the required documents to the Delaware Division of Corporations, and paying the associated fees. The approval process usually takes from one to three weeks.
  • Wyoming: File for approval of your Articles of Organization to establish your business startup as an LLC by sending the required documents to the Wyoming Secretary of State, and paying the associated fees. The approval process usually takes about 15 days.

Request an EIN from the IRS

As either a resident or nonresident of the U.S., you can obtain an Employer Identification Number from the IRS. You do not need to live in the United States or have a Social Security Number to obtain an EIN or an ITIN (which you can use to acquire an EIN).

Open a business bank account

Opening a U.S. bank account can be more complicated from outside the country. Various U.S. banks have different requirements for opening business accounts. Some have simpler processes than others do for nonresidents. There are also platforms helpful to non-U.S. residents opening bank accounts like MercuryRelay, and Found.

See listings in the Delaware or Wyoming LLC guidelines for physical and online banking systems that help foreigners overseas open U.S. bank accounts. Expect to provide documents from your LLC registration.

Get any required local business licenses and permits

A state business license is not required for the majority of Delaware or Wyoming businesses. See the state’s step-by-step guidelines and check with relevant state information resources for possible exceptions.

Submit a Beneficial Ownership Information report, if applicable

The majority of non-U.S. residents who own businesses operating in the country must submit a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) within 90 days from the LLC registration date. Starting in 2025, the report deadline will be 30 days. (The BOI report is confidential. These reports are not public records.)

Costs of LLC in Delaware and Wyoming

Foreign Certificate Registration$200
Certified Copy$50
Registered Series Formation$110
Change of Registered Agent$50
Cancellation Foreign$200
Termination or Amendment$220
Annual DE Tax for LLCs$300
No Annual Report required for LLCs
No state or local sales tax
Tax on Gross Receipts0.0945% to 0.7468%
Register Articles of Organization$100
Certificate of Authority$150
Series designated or established under a Series LLC (cost per series)$10
Annual Registration of Commercial Registered Agent$50
Reinstatement for tax$100
Reinstatement for No Registered Agent$350
Amendment/Dissolution/Any other filing$60
Annual Report License tax (based on the business’s assets located and employed in Wyoming)$60 or $0.0002 per dollar, whichever is greater

Staying compliant

After registering your LLC successfully in Delaware or Wyoming, you’ll need to ensure that your new business remains in good standing over time with all applicable local, state, and federal tax laws and other obligations, including any that have been added or changed.

Annual IRS reporting requirements.Annual IRS reporting requirements.
Payment of the annual Registered Agent Fee.Payment of the annual Registered Agent Fee.
Delaware does not require Annual Reports for LLCs.
All LLCs registered in Delaware are required to pay the state’s annual Franchise Fee of $300.
Wyoming Annual report must be delivered by the first day of the month of the LLC formation approval.
The compliance grace period before dissolution of the LLC is 60 days.
Filing documentation with various state and local agencies for permits and licenses in relation to particular business operations purposes.Filing documentation with various state and local agencies for permits and licenses in relation to particular business operations purposes.
Paying various local and other fees.Paying various local and other fees.
Potential requirements for local licenses or permits in areas where your LLC is currently doing business in the United States.Potential requirements for local licenses or permits in areas where your LLC is actually doing business in the United States.

Pass-through tax for foreign-owned LLCs in the U.S.

If you generate income from a business entity in the United States, whether you are a resident or live outside the country, the income is taxed at the rate of 30%. This is the IRS business tax rate for all businesses. However, tax processing on business income for non-U.S. residents is passed through the American tax collection system and on to the nonresident business owner’s country of residence. Hence, the term pass-through taxation.

Be sure to speak with a U.S. tax accountant or tax attorney before you begin operating your business in the country. Also, refer to the U.S. Tax Guide for Aliens (IRS Publication 519) and familiarize yourself with the U.S. Treasury Department information regarding Tax Treaties.


Should I choose Delaware or Wyoming as the place to start my LLC?

There are both positive and negative aspects of starting LLCs in either Delaware or Wyoming. While Delaware offers an especially conducive legal system, Wyoming offers impressively low taxes and other cost savings.

What are the main differences between Delaware and Wyoming for LLCs?

Among the biggest differences between Delaware and Wyoming for LLCs are Wyoming’s lower cost of maintaining registration in the state and Delaware’s stronger asset protection.

What are some reasons not to start an LLC in Delaware or Wyoming?

Delaware requires a business license and annual renewal of it, and Wyoming has low fees for LLC registration and annual fees. But, other states, like California, Nevada, New Mexico, and others also offers low-cost LLC startup opportunities. Still, Delaware and Wyoming remain the two most popular states in the U.S. for LLC registration because of their strong liability protection and overall superior benefits that these two business-friendly states offer each LLC registered there.

What is an LLC?

The Limited Liability Company (LLC) business structure, per its name, limits the personal financial liability of small business owners if civil actions are brought against their company. It separates the conception of a business owner’s personal property from the business’s property. Accordingly, business provides legal protection for LLC members against loss of personal property in business liability cases. 

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