Why State Choice Matters for Foreign LLC Owners
If you’re a non-US resident looking to start a business in the US, choosing the right state to form your LLC is a big deal, as it affects how much you pay, how private your information is, and how smooth your business operations will be.
Here’s why it matters:
- Each state has different rules: From taxes to reporting requirements, US states make their own rules when it comes to LLCs
- Some states are more friendly to foreigners: A few states make it easier for non-residents to form and manage their LLCs without needing to be physically present
- You don’t have to choose the state you live in (or even visit): Unlike in some countries, US LLCs can be registered in any state, even if you live overseas
- State fees vary: Some charge high annual fees or franchise taxes. Others are much more affordable
- Privacy protection differs: Some states require less personal information when forming your LLC, which can help protect your identity
For foreign founders, the best state to form an LLC for foreigners is one that balances low costs, privacy, and ease of setup, without unnecessary legal or tax hurdles. That’s exactly what we’ll explore in the rest of this guide.
Wyoming: Best for Privacy and Affordability
Wyoming is a top pick for many international entrepreneurs, and for good reason. It offers a strong mix of low costs, privacy, and simple rules that make running a US LLC much easier, especially if you’re overseas.
The following are the reasons why you should consider Wyoming for business formation:
- No State Income Tax
Wyoming does not charge state income tax, which means you keep more of your profits. This is especially helpful if your business generates a lot of revenue.
- Excellent Privacy
Wyoming is one of the few states that does not require you to list your name publicly when forming an LLC. Instead, you can use a registered agent to protect your identity, ideal if you value discretion.
- Low Annual Fees
The annual license tax is only USD $60, and there’s no franchise tax. Compared to other states, this keeps your long-term costs low.
- Easy Setup for Non-Residents
You don’t need to live in the US or even visit to set up your business. You can hire a registered agent, complete your LLC application online, and manage everything from abroad.
- Quick and Smooth Processing
Wyoming is known for its efficient processing times, and its online portal makes filing straightforward, even for first-timers.
Ideal for:
- Entrepreneurs who want to keep their names off public records
- Startups on a tight budget
- Business owners who value fast and simple filing
Overall, if privacy and affordability are your top priorities, Wyoming is a fantastic place to launch your US LLC.
Delaware: Best for Legal Protection and Investors
Delaware has long been the go-to state for big companies, and it’s also a strong choice for international founders who want legal strength and to add credibility with investors.
Here’s why many foreign business owners choose Delaware:
- Business-Friendly Legal System
Delaware has a special court called the Court of Chancery, which focuses only on business cases. Judges are experts in corporate law, and cases move faster without juries. This gives your business more predictable outcomes in case of legal issues.
- Popular with Investors
If you’re planning to raise funds from US investors or venture capital firms, they may prefer your business to be incorporated in Delaware. It’s a standard in the startup world and is often seen as more credible.
- Flexible Business Laws
Delaware gives you more freedom in how you manage your company. For example, you can structure your LLC to fit your specific needs without a lot of restrictions.
- Strong Privacy
Like Wyoming, Delaware also protects owner privacy. Your personal information doesn’t have to be listed in public filings.
- Easy for Foreign Owners
You don’t need to live in the US to open a Delaware LLC. A registered agent is required, but you can file everything remotely.
Keep in Mind:
Delaware can be more expensive than other states. The franchise tax and registered agent fees can add up. Also, Delaware LLC maintenance may require extra paperwork if you plan to operate in another state.
Ideal for:
- Startups looking to raise capital
- Businesses seeking strong legal protection
- Owners who expect future growth or outside investors
In summary, Delaware may be the right state for your LLC if your goal is to build a scalable business with legal support and to attract investor interest.
New Mexico: Best for Simplicity and Zero Paperwork
If you want a simple, low-maintenance setup, New Mexico might be your best bet. It offers privacy, affordability, and one of the easiest LLC structures in the US
Here’s why New Mexico is worth considering:
- No Annual Reports
Unlike most states, New Mexico does not require you to file annual reports. This means less paperwork and fewer deadlines to keep track of. Once your LLC is formed, there are almost no ongoing filing requirements.
- Low Costs
The formation fee of $50 is affordable, and you won’t be charged yearly state fees. It’s great for business owners who want to save on costs while staying compliant.
- Privacy-Friendly
New Mexico doesn’t require your name or address to be made public when forming an LLC. You can stay anonymous while running your business.
- Easy for International Owners
New Mexico is very welcoming to non-US residents. You don’t need to be a US citizen or have a physical office in the US to start a business here. In fact, many choose New Mexico when setting up an LLC for foreigners due to its no-frills process.
Keep in Mind:
If you plan to operate your business in a different state, you’ll still need to register your New Mexico LLC there. Also, while the paperwork is light, it’s still smart to keep good business records and use a registered agent.
Ideal for:
- Solo entrepreneurs
- Privacy-focused owners
- Those looking for the easiest and cheapest state to form an LLC
In short, New Mexico offers a “set it and forget it” style of LLC, which is perfect if you want a stress-free business foundation in the US.
Florida: Best for Market Reach and No Personal Income Tax
Florida is one of the most popular states for both US and foreign entrepreneurs, and for good reason. If you’re planning to run a business that actively operates in the US market, Florida offers great advantages.
- No State Income Tax
One of Florida’s biggest benefits is that it doesn’t charge personal income tax. If your LLC is treated as a pass-through entity (where profits pass directly to you), you won’t pay state tax on those earnings.
- Business-Friendly Environment
Florida is known for its strong economy and diverse industries. From tourism and real estate to tech and healthcare, the state is full of opportunities. It’s also one of the fastest-growing states for small businesses.
- Strategic Location and Market Reach
With easy access to Latin America and strong domestic connections, Florida is a great base for international trade. If your business involves logistics, importing/exporting, or global partnerships, this is a solid advantage.
- Reasonable Setup and Maintenance
The cost to form an LLC in Florida is relatively affordable, and annual reporting requirements are straightforward. The state also provides helpful online services to manage your filings.
- Great Place for Foreign Entrepreneurs
Florida is home to a large international population and many foreign-owned businesses. It’s not hard to find support services, legal advisors, and communities that cater to global founders.
A Few Things to Keep in Mind:
- Florida does require annual reports to keep your LLC active.
- If you don’t live in the US, you’ll still need a registered agent with a Florida address.
- Some local cities or counties may require additional business licenses depending on your industry.
Ideal for:
- Business owners wanting direct access to the US market
- Entrepreneurs planning to move to or frequently visit the US
- International founders focused on trade, tourism, or tech
Florida not only gives you sunshine and beaches, but it also offers tax benefits, strong markets, and a welcoming environment to grow your business.
Side-by-Side Comparison Table
We’ve talked a lot about Wyoming, Delaware, New Mexico, and Florida. Now, let’s make things easier by comparing them in a table. This way, you can easily see which state fits your business goals best.
| Feature | Wyoming | Delaware | New Mexico | Florida |
| Privacy | Excellent (no owner disclosure) | Good (some filings required) | Excellent (anonymous LLCs) | Moderate (some public info required) |
| State Income Tax | No | No | No | No |
| Formation Fees | Low ($100) | Moderate ($90–$110) | Low ($50) | Moderate ($125) |
| Annual Reports | Yes ($60) | Yes (Franchise Tax + Report) | No | Yes ($138.75) |
| Registered Agent Needed | Yes | Yes | Yes | Yes |
| Ideal For | Asset protection, privacy | Startups, investor-friendly | Simple, low-cost setup | Active market access, local presence |
| Unique Advantage | Lifetime anonymity | Trusted legal system | No annual reporting | Strong business market & tax perks |
What This Means for You
- If privacy and minimal paperwork are your top concerns, New Mexico or Wyoming might be your best bet.
- Delaware has the edge if you’re building a tech startup and looking for serious investors.
- Florida gives you direct access and tax benefits if you plan to be actively involved in the US market.
Take your time to compare and weigh your options, and don’t hesitate to seek advice from a legal or tax professional before deciding. Your choice of state can shape your US business journey, so choose the one that supports your long-term goals.
How to Choose the Right State for Your LLC
Now that you’ve seen what each state offers, the big question is, which one is right for you? There’s no one-size-fits-all answer, but here are a few practical things to consider when making your choice:
Think About Your Business Goals
- Do you want to keep things simple and affordable? New Mexico or Wyoming might be best.
- Are you looking to attract US investors or build a startup? Delaware is popular for that.
- Planning to hire locally or serve customers in a specific area like Florida? Consider Florida.
Evaluate Long-Term Costs
- Look at more than just the filing fee.
- Check annual report fees, franchise taxes, and registered agent costs.
- Think about how much you’re willing to spend to stay compliant each year.
Understand the Legal and Tax Environment
- Some states offer stronger legal protections for LLCs.
- Others might have easier rules for non-residents.
- No matter what, make sure you won’t be surprised by hidden requirements.
Privacy vs. Paperwork
- If you don’t want your name in public databases, go for states like Wyoming or New Mexico.
- If you’re okay with more paperwork in exchange for access to big investors, Delaware is worth it.
Do You Plan to Operate Physically in the US?
- If you have a physical office, warehouse, or staff in one state, you should form your LLC there, even if it’s not the cheapest option.
- Otherwise, you may have to register your LLC as a foreign entity, which adds more cost and complexity.
Take time to weigh your options, because starting strong in the right state can save you a lot of stress (and money) down the road.
Final Thoughts
Choosing the best state to form an LLC for non-resident business owners comes down to your goals, budget, and how you plan to operate in the US. Whether it’s Wyoming for privacy, Delaware for investors, New Mexico for simplicity, or Florida for market reach, each state has its unique strengths.
Take time to compare, plan, and choose what fits your business best. And when you’re ready to move forward, EINwaittime.com can help guide you through forming your US LLC and applying for your EIN, even without an SSN or ITIN.