By ABA 360 Pro Team | Updated February 2025 | 9 min read
"Which state should I form my LLC in?" is the single most common question we receive from international entrepreneurs. And it's a question that deserves a thoughtful answer — because the wrong choice can cost you hundreds of dollars annually in unnecessary fees or leave you without protections you need.
This guide provides an honest, data-driven comparison of the three states most frequently recommended for LLC formation: Delaware, Wyoming, and Nevada. We'll also touch on when Florida or your home state might be the better choice.
The Big Three: Delaware, Wyoming, and Nevada at a Glance
| Factor | Delaware | Wyoming | Nevada |
|---|---|---|---|
| State Filing Fee | $90 | $100 | $425 |
| Annual Fee | $300 (franchise tax) | $60 (annual report) | $350 (business license + annual list) |
| Privacy | ★★★★★ | ★★★★★ | ★★★★☆ |
| Asset Protection | ★★★★☆ | ★★★★★ | ★★★★☆ |
| Court System | ★★★★★ | ★★★☆☆ | ★★★☆☆ |
| State Income Tax | None (for non-residents) | None | None |
| Series LLC | ✅ | ✅ | ✅ |
| Best For | Tech, investors | Low cost, protection | Previously popular, declining |
Delaware: The Establishment Choice
Why Delaware Is Famous
Delaware has been the preferred state for business formation for over a century. The numbers speak for themselves:
- 68% of Fortune 500 companies are incorporated in Delaware
- More than 1.8 million business entities are registered there
- The state has 200+ years of business case law providing legal certainty
Delaware's Strengths
The Court of Chancery. Delaware's specialized business court is staffed by judges (not juries) who focus exclusively on business disputes. This creates faster, more predictable outcomes for any legal issues that arise.
Investor expectations. If you plan to raise capital from U.S. venture capitalists or angel investors, many will expect (or require) a Delaware entity. This is especially true for tech startups.
Legal precedent. The massive body of Delaware business law means that virtually any business question has already been addressed by the courts. You get predictability that no other state can match.
Delaware's Weaknesses
Higher annual costs. The $300/year franchise tax is five times Wyoming's $60 annual report fee. Over 10 years, that's an extra $2,400.
Weaker single-member protection. Delaware's asset protection for single-member LLCs is not as robust as Wyoming's. Courts in Delaware have shown more willingness to pierce the veil of single-member entities.
No unique tax advantage. Delaware's "no state income tax" benefit applies only if you don't conduct business within Delaware. This is the same as Wyoming and Nevada.
Delaware Verdict
Choose Delaware if: You're building a tech company that will seek investment, need the strongest legal framework available, or want the state that's most recognized by international banks and partners.
Wyoming: The Rising Star
Why Wyoming Is Gaining Ground
Wyoming invented the LLC in 1977 and has continued to innovate with the most entrepreneur-friendly legislation in the country. It's quickly becoming the top choice for small businesses and international entrepreneurs.
Wyoming's Strengths
Lowest annual costs. At $60/year for the annual report (with no franchise tax), Wyoming is the most cost-effective state for ongoing LLC maintenance.
Strongest asset protection. Wyoming's charging order protection extends to single-member LLCs — a critical advantage that most states (including Delaware) don't consistently offer. A personal creditor cannot seize your LLC's assets.
Maximum privacy. Wyoming doesn't require member or manager names in formation documents, offers lifetime proxy provisions, and has no information-sharing agreements that expose ownership.
Crypto-friendly. Wyoming has passed the most progressive cryptocurrency legislation in the U.S., making it ideal for blockchain and digital asset businesses.
No state taxes. Zero income tax (personal or corporate), zero franchise tax, zero gross receipts tax.
Wyoming's Weaknesses
Less established court system. Wyoming's courts are competent but lack the specialized business expertise and extensive precedent of Delaware's Court of Chancery.
Lower investor recognition. While growing in popularity, Wyoming doesn't carry the same prestige as Delaware in venture capital circles. Some sophisticated investors may have a mild preference for Delaware.
Smaller professional ecosystem. Fewer corporate attorneys and service providers are based in Wyoming compared to Delaware.
Wyoming Verdict
Choose Wyoming if: You prioritize low costs, maximum privacy, strong asset protection (especially for single-member LLCs), or you're building an e-commerce, consulting, or digital business that doesn't need venture capital.
Nevada: The Declining Option
Why Nevada Was Popular
Nevada was once the go-to state for LLC formation, marketed heavily for its "no state income tax" and privacy protections. But in 2025, much of Nevada's appeal has faded.
Nevada's Strengths
No state income tax. Like Wyoming and Delaware, Nevada has no state income tax.
Strong privacy laws. Nevada doesn't require member disclosure in formation documents (similar to Delaware and Wyoming).
Series LLC available. Nevada does offer the Series LLC structure.
Nevada's Weaknesses (Why It's No Longer the Best Choice)
Highest costs. Nevada's combined formation and annual costs are the highest of the three:
- State filing fee: $425 (vs. $100 in Wyoming)
- Annual business license fee: $200
- Annual list of managers: $150
- Total annual cost: $350 (vs. $60 in Wyoming)
Commerce Tax. Nevada introduced a Commerce Tax in 2015 that applies to businesses with gross revenue over $4 million. While most small LLCs won't hit this threshold, it eliminated Nevada's "zero tax" reputation.
IRS scrutiny. Nevada LLCs have historically been used for tax avoidance schemes, leading to increased IRS scrutiny of Nevada entities. This is an unnecessary risk when Wyoming offers the same benefits without the stigma.
No unique advantages remaining. Everything Nevada offers, Wyoming offers cheaper and with stronger asset protection.
Nevada Verdict
Choose Nevada only if: You have specific business operations in Nevada or a particular reason tied to Nevada's geography. For most entrepreneurs, Wyoming is the objectively better choice.
The Florida Wild Card
While not part of the "Big Three," Florida deserves mention for specific use cases:
When Florida Makes Sense
- You plan to have physical operations in Florida (office, employees, warehouse)
- Your business connects Latin American and U.S. markets
- You want access to bilingual professionals and services
- You'll be present in Florida regularly (tourism, real estate, events)
Florida's Costs
- State filing fee: $125
- Annual report: $138.75
- No state income tax
When Florida Doesn't Make Sense
If you have no connection to Florida and won't have physical operations there, forming in Wyoming or Delaware is typically more advantageous.
Decision Matrix: Which State Is Right for You?
| Your Situation | Recommended State |
|---|---|
| Building a tech startup seeking VC funding | Delaware |
| Running an e-commerce business | Wyoming |
| Freelancing or consulting for U.S. clients | Wyoming |
| Investing in real estate | Wyoming (or Florida if FL properties) |
| Trading cryptocurrency or digital assets | Wyoming |
| Seeking strongest asset protection | Wyoming |
| Want lowest possible annual costs | Wyoming |
| Planning to go public or seek significant investment | Delaware |
| Business connected to Latin America | Florida |
| Physical operations in a specific state | That state |
Cost Comparison: 5-Year Analysis
| Cost Item | Delaware | Wyoming | Nevada |
|---|---|---|---|
| Formation Fee | $90 | $100 | $425 |
| Year 1 Annual Fee | $300 | $60 | $350 |
| Year 2 Annual Fee | $300 | $60 | $350 |
| Year 3 Annual Fee | $300 | $60 | $350 |
| Year 4 Annual Fee | $300 | $60 | $350 |
| Year 5 Annual Fee | $300 | $60 | $350 |
| 5-Year Total (State Fees Only) | $1,590 | $400 | $2,175 |
Wyoming saves you $1,190 over Delaware and $1,775 over Nevada in state fees alone over five years.
The Bottom Line
For most international entrepreneurs in 2025:
- Wyoming is the best overall choice — lowest cost, strongest protection, maximum privacy
- Delaware is the best choice for companies seeking investment or needing the world's premier business court
- Nevada is generally not recommended — higher costs with no unique advantages
- Florida is ideal for businesses with Latin American connections or Florida operations
Still unsure? ABA 360 Pro offers free consultations to help you choose the right state for your specific business needs.
Start Your LLC in the Right State →
Need help deciding? Email [email protected] or schedule a free consultation on our website.
Related: How to Start an LLC as a Non-US Resident in 2025 | EIN Application Guide | US Bank Account Guide | Tax Implications for Non-Residents
Need help choosing the right state? Email [email protected] or schedule a free consultation on our website.