Wyoming vs Delaware LLC for Non-Residents

Wyoming or Delaware is one of the first real decisions a non-US founder has to make, and it quietly shapes your costs, paperwork and privacy for years. Here is how the two actually compare, without the internet myths.

Why this decision gets so much attention

If you search for advice on forming a US LLC as a European founder, you will find strong opinions on both sides. Some people swear by Wyoming because it is cheap and private. Others insist Delaware is the only 'serious' option because investors expect it. The truth is less dramatic. For most non-resident founders running an online business, a consultancy, or a holding company for other assets, either state will work. The differences are real, but they are about cost, privacy and paperwork, not about which one is more legitimate.

Whichever state you pick, the federal rules are identical. A foreign-owned single-member LLC that elects to be treated as a disregarded entity still has to file Form 5472 along with a pro-forma Form 1120 every year, even if the company had zero revenue. Skipping this is not a minor slip. The IRS penalty for a late or missing 5472 filing starts at 25,000 dollars, and that applies regardless of whether your LLC is registered in Cheyenne or Wilmington.

Cost: Wyoming is usually cheaper, but not dramatically

Wyoming has built its reputation on low state fees. The initial filing fee and the annual report fee are among the lowest in the country, and there is no state income tax or franchise tax to worry about. Delaware charges more to form the LLC initially and then bills a flat annual LLC tax every year, on top of whatever you pay a registered agent. Neither amount is large in absolute terms, but over several years the gap adds up, especially if you are running more than one entity.

Both states require you to keep a registered agent with a physical address in that state. You cannot use your home address in Portugal or Germany as your registered agent address, and you generally would not want to anyway. This is a recurring annual cost in either state, usually bundled into formation and renewal packages.

Privacy: Wyoming has the edge, but Delaware is not exposed either

Wyoming does not require you to list the names of LLC members or managers in the public formation documents. You can use an organizer service to file on your behalf, so your name never has to appear in the state's public record. Delaware also does not require member names on the public certificate of formation, so it is more private than states like California or New York, but Wyoming's statutes go a step further in protecting single-member LLCs and offer some of the strongest charging order protections in the country, which matters if asset protection is part of why you are setting this up.

Neither state's privacy protections change your US tax obligations or hide anything from the IRS. Your EIN application and your annual filings still require accurate ownership information at the federal level. Privacy here means the general public and casual searchers cannot easily find your name, not that you are anonymous to tax authorities.

Taxes: the state barely matters at the federal level

This is the part people get most confused about. Your LLC's federal tax treatment, whether it is disregarded, a partnership, or has elected corporate status, does not change based on which state it is formed in. Neither Wyoming nor Delaware LLCs owe state income tax simply for being formed there, as long as the LLC is not actually doing business inside that state. If your customers, servers and operations are elsewhere, forming in Wyoming or Delaware does not create a state tax bill in either place.

What does change your paperwork is Delaware's annual flat LLC tax, which is due regardless of income, and which some founders forget about until a penalty notice arrives. Wyoming's annual report fee is generally lower and is based on the value of assets located in the state, which for most non-resident holding companies with no physical Wyoming presence works out modestly.

When Wyoming usually wins

• You are running an e-commerce store, agency, SaaS tool, or consultancy with no US employees or physical presence.
• You want the lowest ongoing maintenance cost while staying fully compliant.
• You care about keeping your name off public formation records.
• You want the option of a series LLC to separate multiple product lines or brands under one structure at lower cost than running several full LLCs.
• You are not planning to raise institutional venture capital.

When Delaware usually wins

• You plan to raise money from US venture capital funds, which almost universally expect a Delaware entity, often a C-corp rather than an LLC.
• You expect to convert the LLC into a Delaware corporation later and want to avoid a messy re-domiciliation.
• Your US-based partners, investors, or larger enterprise customers specifically expect or require Delaware for contractual reasons.
• You want access to the Delaware Court of Chancery's business-specific case law if a dispute ever needs resolving.

Wyoming vs Delaware at a glance

Banking works the same either way

US banking partners that serve non-resident founders remotely, such as Mercury, Wise, or Relay, do not treat Wyoming and Delaware differently in any meaningful way. What they care about is that your LLC is properly formed, your EIN is valid, and your paperwork is consistent. An ITIN is not required to get an EIN or open most of these accounts, and it is not tied to any visa status. It exists specifically for people who need a US taxpayer number but are not eligible for a Social Security Number, which describes most non-resident founders.

This is where a lot of the real friction shows up, not in the state choice itself but in getting formation, EIN, banking and the annual 5472 filing all lined up correctly and on time. Founders Credit handles this end to end for non-US founders, choosing the right state for your situation, filing the LLC, getting the EIN through the IRS's fax and mail process for non-residents, arranging the ITIN if you need one, and setting up US business banking and cards, all done remotely without a US trip.

Glossary

Registered agent: a person or company with a physical address in the state of formation who receives legal and state correspondence on behalf of your LLC. Required in every state, including Wyoming and Delaware.

Disregarded entity: the default IRS classification for a single-member LLC, meaning the LLC's activity is reported on the owner's return rather than a separate corporate return, though a foreign owner's disregarded LLC still files Form 5472 and a pro-forma 1120.

Form 5472: an information return foreign-owned US LLCs and corporations must file annually to report transactions between the company and its foreign owner, even with no income. It does not calculate tax owed on its own.

EIN (Employer Identification Number): the federal tax ID for your LLC, obtainable by non-residents via Form SS-4 by fax or mail, without needing a US visa or Social Security Number.

ITIN (Individual Taxpayer Identification Number): a personal US tax ID for individuals who need to file US taxes but do not qualify for an SSN. It has no connection to immigration status or visas.

Franchise tax / annual LLC tax: a recurring flat fee Delaware charges LLCs each year regardless of income, separate from any federal tax obligation.

Frequently asked questions