Wyoming vs Delaware LLC for non-US founders

Almost every formation service pushes foreign founders toward Delaware. It's the default, it's famous, "more than 60% of Fortune 500 companies are incorporated there." Then you actually start operating the LLC and you find out the annual franchise tax is $300, the registered-agent fees are higher, and the privacy protections are weaker than the marketing implied.

Wyoming costs less, asks for less paperwork, doesn't tax the LLC, and gives you better privacy. For a typical non-US solo founder running an online business, Wyoming is the right answer 80% of the time.

This guide explains why — and the 20% where Delaware is still better.

The honest comparison

Annual cost

• Wyoming: $60 annual report fee. No franchise tax. Registered agent ~$50–$150/year. Total: roughly $110–$210/year.
• Delaware: $300 annual franchise tax (flat, regardless of revenue). Registered agent ~$100–$250/year. Total: roughly $400–$550/year.

Delaware is 2-5x more expensive every single year, forever. For an LLC that makes $0 in revenue this difference is real money.

Privacy

• Wyoming: Owner name is not in the public record. Public records show only the registered agent and the LLC name.
• Delaware: Owner name is also not in the public record (this part is similar). However, Delaware requires you to list the "communication contact" name, which can leak through.

Both states protect basic privacy reasonably well, but Wyoming's filings are thinner — fewer fields, fewer chances for your name to end up somewhere unintended.

Important: Both states now require you to file a federal BOI (Beneficial Ownership Information) report with FinCEN, which is a federal requirement to disclose beneficial owners. The state-level privacy comparison is mostly relevant if you want to keep your name out of public commercial databases.

Court system and legal precedent

• Delaware: Has the Court of Chancery, the most developed body of corporate law in the US. Big advantage if you ever raise institutional venture capital or do M&A — investors know exactly how disputes will be adjudicated.
• Wyoming: Standard court system. Adequate for the vast majority of operating businesses. Not preferred by VCs.

If you intend to raise venture capital, sell the business to a US acquirer, or IPO, you'll likely end up converting to a Delaware C-corp anyway. Forming as a Delaware LLC from the start can save the conversion step. But for a bootstrapped solo founder, this rarely matters in year 1.

Banking access

Banks don't care what state your LLC is registered in. Mercury, Wise, Relay, Brex — all accept Wyoming and Delaware LLCs equally. State of formation is irrelevant to opening a business bank account.

What about Form 5472?

Form 5472 obligations are identical regardless of state. The IRS doesn't care whether your LLC is formed in Wyoming, Delaware, New Mexico, or anywhere else — if it's a foreign-owned single-member US LLC, you owe Form 5472. The form is the same, the deadline is the same, the penalty is the same.

State choice doesn't affect your federal tax obligation at all. It only affects:

• The annual state-level fees you pay
• The registered agent you hire
• Privacy of your name in commercial databases
• The legal venue if anyone ever sues the LLC

When Wyoming is the right choice

You're a solo founder, you don't plan to raise venture capital soon, you want to minimise annual fees, and you want decent privacy. This is most people. Pick Wyoming.

When Delaware is the right choice

• You intend to raise institutional venture capital within the next 2–3 years.
• You plan to convert to a Delaware C-corp eventually (and want to avoid the conversion paperwork).
• You're building a business that may attract M&A from a US acquirer who'll insist on Delaware governance.
• You're operating in a heavily-regulated industry where having access to the Court of Chancery matters (financial services, certain regulated industries).

What about New Mexico or Florida or Nevada?

• New Mexico: Cheap (~$50/year, no annual report). Maximum privacy (no owner disclosure at all). Worth considering if privacy is your top priority — though the state's overall infrastructure for businesses is less mature than Wyoming's.
• Florida: $138/year. No state income tax. Common choice if you have any physical presence in Florida, but otherwise no advantage over Wyoming.
• Nevada: $350/year. Used to be marketed as a privacy/asset-protection haven; that reputation has eroded. Generally not worth it over Wyoming.

Quick decision framework

Answer these in order:

1. Will you raise VC in the next 2 years? Yes → Delaware.
2. Is maximum privacy your single biggest concern? Yes → New Mexico.
3. Otherwise? Wyoming.

Whichever state you pick, the Form 5472 obligation comes with it — and missing it is more expensive than 30 years of any state's annual fees combined. The deadline is April 15, every year. If you're behind, the DIIRSP catch-up procedure is how to fix it.