Delaware vs Wyoming: Side-by-Side Comparison
Here's a comprehensive comparison of the two states across all key factors for non-resident LLC formation:
| Feature | Delaware | Wyoming |
|---|---|---|
| Income Tax | 2.2%–6.6% | None |
| Corporate Tax | 8.7% | None |
| Sales Tax | 0% | 4% |
| Annual Fee | $300 | $60 |
| Formation Fee | $90 | $100 |
| Privacy | No member/manager disclosure | No member/manager disclosure |
| Court System | Court of Chancery (specialized) | Standard state courts |
| Asset Protection | Moderate | Strongest (invented the LLC) |
| Best For | Corporations, VC-backed startups, companies needing established case law | Single-member LLCs, non-resident entrepreneurs, asset protection |
Tax Comparison
Delaware Taxes
- Personal Income Tax: 2.2%–6.6%
- Corporate Tax: 8.7%
- Sales Tax: 0%
Wyoming Taxes
- Personal Income Tax: None
- Corporate Tax: None
- Sales Tax: 4%
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 | Wyoming |
|---|---|---|
| Formation Fee | $90 | $100 |
| Annual Fee | $300 | $60 |
| Registered Agent (est.) | $100–$300/year | $100–$300/year |
| Estimated Year 1 Total | $540 (with RA) | $310 (with RA) |
Privacy & Asset Protection
Delaware
- Privacy: No member/manager disclosure
- Asset Protection: Moderate
- Court System: Court of Chancery (specialized)
Wyoming
- Privacy: No member/manager disclosure
- Asset Protection: Strongest (invented the LLC)
- Court System: Standard state courts
The Verdict: Delaware or Wyoming?
Delaware is the gold standard for corporations and VC-backed startups thanks to its Court of Chancery and extensive business law. Wyoming is the best choice for non-resident entrepreneurs forming LLCs, with zero income/corporate tax, the lowest annual fees ($60), and the strongest LLC protections in the nation. If you're raising VC funding, choose Delaware. For everything else, Wyoming wins on cost and simplicity.
Our Recommendation
Wyoming for most non-resident LLC owners; Delaware for corporations seeking VC funding
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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