Delaware vs Florida: Side-by-Side Comparison
Here's a comprehensive comparison of the two states across all key factors for non-resident LLC formation:
| Feature | Delaware | Florida |
|---|---|---|
| Income Tax | 2.2%–6.6% | None |
| Corporate Tax | 8.7% | 5.5% |
| Sales Tax | 0% | 6% |
| Annual Fee | $300 | $138.75 |
| Formation Fee | $90 | $125 |
| Privacy | No member/manager disclosure | Member/manager names in public records |
| Court System | Court of Chancery (specialized) | Standard state courts |
| Asset Protection | Moderate | Strong (tenancy by the entireties) |
| Best For | Corporations, VC-backed startups, holding companies | Entrepreneurs planning to live in Florida, Latin American market access |
Tax Comparison
Delaware Taxes
- Personal Income Tax: 2.2%–6.6%
- Corporate Tax: 8.7%
- Sales Tax: 0%
Florida Taxes
- Personal Income Tax: None
- Corporate Tax: 5.5%
- Sales Tax: 6%
For non-resident entrepreneurs with single-member LLCs treated as disregarded entities, state income tax typically only applies if you have income sourced within that state. If you have no in-state operations, employees, or customers, state income tax may not apply regardless of which state you form in.
Formation & Annual Costs
| Cost | Delaware | Florida |
|---|---|---|
| Formation Fee | $90 | $125 |
| Annual Fee | $300 | $138.75 |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $540 (with RA) | $14150 (with RA) |
Privacy & Asset Protection
Delaware
- Privacy: No member/manager disclosure
- Asset Protection: Moderate
- Court System: Court of Chancery (specialized)
Florida
- Privacy: Member/manager names in public records
- Asset Protection: Strong (tenancy by the entireties)
- Court System: Standard state courts
The Verdict: Delaware or Florida?
Florida has no personal income tax and lower annual fees ($138.75 vs $300), but less privacy than Delaware. Delaware has no sales tax and superior business courts. Florida is ideal if you plan to live there or need access to Latin American markets. Delaware is better for pure holding company structures where you don't need a physical presence.
Our Recommendation
Florida for US-based living; Delaware for holding companies and privacy
Remember that regardless of which state you form your LLC in, your federal tax obligations remain the same. All foreign-owned single-member LLCs must file Form 5472 and a pro forma Form 1120 annually, with a $25,000 penalty for non-compliance.
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