Best States for Non-Residents to Form an LLC (2025 Guide)

Introduction: Why State Selection Matters for Non-Resident LLCs

Forming a Limited Liability Company (LLC) in the U.S. as a non-resident can be a game-changer for global entrepreneurs. However, choosing the right state is crucial to optimizing taxes, reducing compliance burdens, and ensuring privacy. Since LLC regulations vary by state, selecting the best jurisdiction directly impacts your operational costs, tax obligations, and legal protections.

Some states offer business-friendly policies, low maintenance costs, and strong privacy protections, while others have higher fees and complex compliance requirements that may not be ideal for non-U.S. residents.

Why Does the State Matter for Your LLC?

Unlike corporations, LLCs are state-registered entities, meaning that each U.S. state has its own set of rules, tax policies, and filing requirements. Choosing the wrong state could lead to unnecessary taxes, high annual fees, and complex legal obligations.

In this guide, we will break down the best U.S. states for non-residents to form an LLC, comparing the key benefits, costs, and legal requirements to help you make an informed decision.

Key Factors to Consider When Choosing a State for Your LLC

Choosing the right state for your non-resident LLC involves evaluating several critical factors. Below are the most important considerations when deciding where to form your LLC.

1. Tax Structure: State Income Tax & Franchise Tax

• The biggest tax advantage for non-U.S. residents is that they are generally not subject to state income tax unless they have a physical presence (nexus) in that state.

• Some states, like Wyoming and Florida, have no state income tax—making them ideal for foreign entrepreneurs.

• Certain states charge a franchise tax, which is an annual tax imposed on LLCs simply for existing. Examples include:

  • California: $800 minimum franchise tax per year.

  • Delaware: $300 annual franchise tax.

  • Wyoming & New Mexico: No franchise tax.

2. Privacy and Anonymity Laws

• If privacy is a concern, Wyoming and New Mexico allow LLC owners to remain anonymous.

• Delaware provides some level of anonymity, but public filings include certain ownership details.

3. Annual Reporting and Compliance Requirements

• Some states have complex reporting requirements, while others are more relaxed.

• New Mexico stands out as it does not require annual reports.

• Wyoming, Delaware, and Florida have simple annual reporting requirements with low fees.

4. Formation and Operating Costs

• The cost of forming an LLC varies by state. Here is a comparison of initial filing fees and annual renewal costs:

5. Most Affordable State for LLC Formation

• New Mexico is the cheapest state due to its low formation fee and no annual reporting requirements.

• Wyoming offers great privacy protection and has low maintenance fees.

6. Popular States for Foreign-Owned LLCs

• Delaware and Wyoming are the most popular choices for international entrepreneurs.

• Nevada is also favored but has higher maintenance costs.

Frequently Asked Questions (FAQ)

1. Do I need to pay state income tax as a non-resident?

No, if you do not have a physical presence or employees in the U.S., you are generally exempt from state income tax. However, certain states have other tax obligations.

2. What is the best state for forming an LLC with low costs?

New Mexico is the most affordable due to its low formation fee and no annual reporting requirement.

3. Which state is best for privacy?

Wyoming and New Mexico allow anonymous LLC ownership, providing excellent privacy protection.

4. Do I need a registered agent?

Yes, every U.S. LLC requires a registered agent with a physical address in the state of formation.

5. What if I want to change my LLC’s state?

You can move your LLC to another state through a process called domestication or by forming a new LLC and dissolving the old one.

6. Is Delaware better than Wyoming for an LLC?

Delaware is better for investor-backed businesses, while Wyoming is better for small businesses and privacy.

7. Can I operate my LLC from outside the U.S.?

Yes, you can run your U.S. LLC from anywhere in the world as long as you comply with legal and tax requirements.

8. How long does it take to register an LLC?

Most states process LLC formations within 1-2 weeks, while states like Delaware and Wyoming offer expedited options.

9. Do I need a U.S. bank account for my LLC?

Yes, it is highly recommended. A U.S. business bank account is essential for accepting payments and managing finances.

10. Can I have multiple LLCs in different states?

Yes, but you will have to manage compliance and reporting for each LLC separately.

Next Steps

Choosing the right state for your non-resident LLC depends on your business model, privacy needs, and budget. States like Wyoming, Delaware, and New Mexico remain top choices due to their low costs and privacy advantages.

Top States for Non-Residents to Form an LLC

Different states offer different benefits for non-resident entrepreneurs. Below are the top choices based on privacy, cost, and tax advantages.

1. Wyoming LLC: The Best for Privacy and Low Fees

• No state income tax and no franchise tax.

• Offers strong privacy protections—owners are not listed in public records.

• Low annual fees ($60 for renewals).

• Easy and quick LLC formation process.

2. Delaware LLC: The Legal and Investor-Friendly Choice

• Preferred by investors and venture capitalists.

• Efficient and business-friendly legal system.

• Annual franchise tax of $300.

• No state income tax for out-of-state earnings.

3. New Mexico LLC: No Annual Report, Cost-Effective Option

• No annual reporting or renewal fees.

• Low formation fee ($50).

• Provides anonymous LLC ownership.

4. Florida LLC: Business-Friendly, No State Income Tax

• No state income tax.

• Large business ecosystem and strong market presence.

• Higher annual report fee ($138.75) compared to Wyoming/New Mexico.

5. Nevada LLC: Privacy and Business Perks, but Higher Costs

• Strong privacy protections—owners are not listed publicly.

• No corporate income tax.

• Higher LLC formation and renewal costs ($425 initial, $350 renewal).

Comparison Table: Best States for Non-Resident LLCs

Frequently Asked Questions (FAQ)

1. Which U.S. state is the best for a non-resident LLC?

Wyoming, Delaware, and New Mexico are the most popular choices due to low costs and privacy protections.

2. Does forming an LLC in Delaware make sense for non-residents?

Yes, if you plan to raise investment, Delaware is a great choice. Otherwise, Wyoming or New Mexico may be better for cost savings.

3. Can I form an LLC in one state but operate in another?

Yes, but you may need to register as a foreign LLC in the state where you do business.

4. Do I need a physical U.S. address to form an LLC?

No, but you need a registered agent in the state where you form your LLC.

5. Which state has the lowest LLC maintenance costs?

New Mexico has no annual fees and is the cheapest state to maintain an LLC.

6. What happens if I don’t file an annual report?

Your LLC may be dissolved or placed in bad standing if you fail to file required documents.

7. Can I have an anonymous LLC?

Yes, Wyoming and New Mexico allow anonymous LLC ownership.

8. How long does it take to form an LLC?

Most states process LLCs within 1-2 weeks, but expedited options are available.

9. Do I need an EIN if I don’t have U.S. employees?

Yes, an EIN is required to open a U.S. business bank account and handle tax filings.

10. How do I choose the best state for my business type?

• E-commerce & digital businesses: Wyoming or New Mexico.

• Investment-heavy businesses: Delaware.

• Local service businesses: The state where you operate.

Final Thoughts

Each state offers different benefits, so your choice depends on your business model, privacy concerns, and cost preferences. For most non-residents, Wyoming, Delaware, and New Mexico remain top choices.

State-by-State Comparison: Pros and Cons

Each state has its own advantages and drawbacks. Below is a breakdown of the costs, privacy protections, tax structures, and compliance requirements across the most popular LLC states for non-residents.

Comparison Table: Costs, Privacy, Taxes, and Compliance

Pros and Cons by State

Wyoming

✅ No state income tax or franchise tax
✅ Strong privacy protections (anonymous ownership allowed)
✅ Low annual fees
❌ Requires annual reports

Delaware

✅ Strong legal system, ideal for investor-backed businesses
✅ No state income tax for out-of-state earnings
❌ High annual franchise tax ($300)
❌ Public filing requirements for ownership details

New Mexico

✅ Lowest formation and maintenance costs
✅ No annual report requirement
✅ Anonymous ownership available
❌ Limited legal protections compared to Delaware

Florida

✅ No state income tax
✅ Business-friendly environment
❌ High annual renewal fees
❌ No privacy protection for LLC owners

Nevada

✅ Strong privacy protections
✅ No state income tax
❌ Expensive formation and renewal fees
❌ Requires annual business license

Frequently Asked Questions (FAQ)

1. What is the best state for LLC privacy protection?

Wyoming and New Mexico offer the best privacy protections, as they allow anonymous ownership.

2. Which state has the lowest maintenance costs for LLCs?

New Mexico is the cheapest state for an LLC due to its no annual fees and no franchise tax.

3. Is Wyoming better than Delaware for a non-resident LLC?

If you need privacy and low fees, Wyoming is better. If you plan to attract investors, Delaware is a stronger choice.

4. Can I form an LLC in one state but do business in another?

Yes, but you may need to register as a foreign LLC in the state where you conduct business.

5. Do I need to file an annual report for my LLC?

Yes, except for New Mexico, which does not require annual reports.

6. Which state has the highest LLC fees?

Nevada has the highest fees, with a $425 formation fee and a $350 renewal fee.

7. What is the franchise tax, and do I have to pay it?

The franchise tax is an annual tax imposed on LLCs in some states (e.g., Delaware: $300/year). Some states, like Wyoming and New Mexico, do not have it.

8. Is forming an LLC in Florida a good idea?

Yes, if you don’t need privacy protections and want to operate in a business-friendly state with no state income tax.

9. Can I switch my LLC from one state to another?

Yes, this process is called LLC domestication, but it is not available in all states.

10. How do I choose the best state for my LLC?

It depends on your priorities:

• For privacy: Wyoming or New Mexico

• For investment-backed businesses: Delaware

• For low costs: New Mexico

• For business-friendly regulations: Florida

Final Thoughts

Choosing the right state for your non-resident LLC is crucial for tax optimization, cost efficiency, and compliance. Wyoming, Delaware, and New Mexico remain the most popular choices depending on your business model and needs.

🚀 Need help forming your LLC? Check out our recommended LLC formation services to get started today!

Which State is Best for Your Business Model?

Choosing the best state for your LLC depends on your business model and priorities. Below, we highlight the top states for various types of businesses.

1. Best State for E-commerce Businesses

E-commerce entrepreneurs who sell products online (Shopify, WooCommerce, Amazon, eBay, etc.) benefit from a business-friendly state with no state income tax and low compliance costs.

• Wyoming: No state income tax, strong privacy laws, and low maintenance costs.

• Delaware: Legal protection and credibility, especially for scaling businesses.

• Florida: No state income tax and a large domestic market.

2. Best State for Consulting & Digital Services

If you run an online business providing services (marketing, IT consulting, freelancing, SaaS, coaching), you need a low-cost, low-maintenance LLC.

• New Mexico: No annual reports, minimal fees, and privacy benefits.

• Wyoming: Offers strong privacy protections and no state income tax.

• Delaware: Good for agencies that may seek investment or corporate structure flexibility.

3. Best State for Amazon FBA, Etsy & Walmart Sellers

Sellers who use Amazon FBA, Etsy, or Walmart may need a physical business address for verification and compliance.

• Wyoming: Provides a unique Suite Number address for business verification at a lower cost than other states.

• Delaware: Well-recognized for business credibility, but more expensive.

• Nevada: Strong privacy but higher maintenance costs.

📌 More details about Wyoming’s unique address service will be available in our upcoming blog post.

4. Best State for Shopify Dropshipping

Dropshipping entrepreneurs need a tax-friendly, cost-effective LLC to maximize profits. The following states work best:

• Wyoming: Low costs, no state income tax, and strong privacy.

• New Mexico: No annual reports and low formation fees.

• Florida: No state income tax, making it ideal for businesses targeting U.S. customers.

5. Best State for High Privacy

If you value anonymity and want to keep your information off public records, you need a privacy-friendly LLC state.

• Wyoming: Allows anonymous ownership and does not disclose LLC member names.

• New Mexico: Does not require annual reports, keeping ownership details private.

• Nevada: Provides strong privacy protections but has higher costs.

Final Thoughts

Choosing the right state depends on your business model and specific needs. If privacy is your top priority, Wyoming or New Mexico are great options. If you need an economic address for Amazon FBA, Wyoming is the best choice. For general e-commerce and consulting businesses, a tax-friendly state like Wyoming, Florida, or New Mexico works well.

Common Mistakes When Choosing a State for Your LLC

Many non-resident entrepreneurs make critical mistakes when selecting a state for their LLC. Below are the most common pitfalls and how to avoid them.

1. Not Considering State Requirements for Marketplace Sellers

For Amazon, Etsy, and Walmart sellers, the state of LLC formation plays a crucial role. These platforms often require a unique, verifiable business address during the account verification process.

• Wyoming is one of the most cost-effective states that provides a unique suite number for business addresses, making it an ideal choice for marketplace sellers.

• Choosing a state without a proper business mailing address option can lead to unnecessary complications when setting up seller accounts.

2. Misunderstanding Tax Obligations

Not all LLCs owe state income tax, especially if they do not have a physical presence in the U.S. However, entrepreneurs often make mistakes in:

• Selecting a state with high tax burdens when a no-tax state would suffice.

• Failing to understand nexus rules, which determine tax liability based on economic activity in certain states.

• Not realizing that states like Wyoming and Florida have no state income tax, which can lead to significant savings.

3. Choosing an Unnecessarily Expensive State

Some entrepreneurs assume that forming an LLC in Delaware or Nevada is always the best choice, but this is not necessarily true.

• Delaware has high franchise taxes ($300 annually), which may not be necessary for small businesses or non-U.S. residents.

• Nevada has expensive renewal fees and additional compliance requirements.

• Wyoming and New Mexico offer more affordable alternatives with lower maintenance costs.

4. Overlooking Privacy and Anonymity Considerations

Many LLC owners seek privacy and wish to keep their information off public records, but they often choose states that do not provide strong anonymity protections.

• Wyoming and New Mexico allow anonymous LLC ownership, protecting your personal details.

• Delaware does not offer true anonymity, as certain ownership details must be disclosed.

Frequently Asked Questions (FAQ)

1. Why does my state choice matter for Amazon, Etsy, or Walmart sellers?

Platforms like Amazon, Etsy, and Walmart require a unique business address during verification. Wyoming offers a cost-effective solution with a unique suite number.

2. Do I have to pay state income tax if I form an LLC in the U.S.?

If your LLC does not have a physical presence or employees in the U.S., you generally do not owe state income tax.

3. Which states do not have state income tax?

Wyoming, Florida, and Texas have no state income tax, making them attractive for non-residents.

4. What is a franchise tax, and do I need to pay it?

A franchise tax is an annual tax on businesses simply for existing. Some states, like Delaware ($300/year), charge this tax, while others, like Wyoming and New Mexico, do not.

5. Can I use my home country’s address instead of a U.S. address for my LLC?

No, most marketplaces and banks require a U.S. business address for verification and compliance purposes.

6. What happens if I choose a high-cost state for my LLC?

You may face higher annual fees, unnecessary taxes, and additional paperwork that could have been avoided by selecting a low-cost state like Wyoming or New Mexico.

7. Is Wyoming better than Delaware for privacy?

Yes, Wyoming provides true anonymity, whereas Delaware requires some owner information to be made public.

8. Can I form an LLC in one state but operate in another?

Yes, but if you operate in another state, you may need to register as a foreign LLC there, leading to extra compliance costs.

9. Do I need a registered agent for my LLC?

Yes, every LLC must have a registered agent with a physical address in the state of formation.

10. How can I switch my LLC from one state to another?

You can move your LLC through a process called domestication, but not all states allow it. Alternatively, you can form a new LLC and dissolve the old one.

Selecting the right state for your LLC is crucial for avoiding unnecessary costs, tax liabilities, and compliance burdens. Wyoming, New Mexico, and Florida remain top choices for their affordability, privacy protections, and business-friendly regulations.

Final Thoughts: Making the Right Choice

Choosing the best U.S. state for forming your LLC as a non-resident depends on various factors, including costs, taxes, privacy, and compliance requirements. The right choice will ultimately depend on your business model, long-term goals, and financial considerations.

Which State is Best for You?

• If you need privacy and anonymity, Wyoming or New Mexico are excellent choices.

• If you want investor-friendly legal protections, Delaware is the best option.

• If you are looking for a low-cost, low-maintenance LLC, New Mexico or Wyoming offer minimal fees and paperwork.

• If you run an Amazon FBA, Etsy, or Walmart business, Wyoming provides an economic suite number for business verification.

• If you prefer a business-friendly state with no state income tax, Florida and Wyoming are solid choices.

Avoiding Common Pitfalls

Before making your final decision, ensure you: ✅ Understand your tax obligations and whether you need to collect sales tax.
✅ Choose a state with reasonable formation and renewal fees.
✅ Consider privacy protections if anonymity is important.
✅ Select a registered agent that meets state requirements.

The Bottom Line

For most non-residents, Wyoming, Delaware, and New Mexico remain the top choices due to their cost-effectiveness, tax advantages, and privacy protections. Your decision should be based on what best suits your business type and operational needs.

🚀 Ready to form your LLC? Check out our recommended LLC formation services to get started today!