Complete guide: which state for your LLC?
State selection is one of the most important decisions when forming your LLC. Each state has different regulations, costs, and privacy levels that can directly impact your operations.
The U.S. territorial tax system
The United States applies a territorial tax system. This means a Foreign Owned LLC with no physical presence, no U.S.-source income, and no U.S. employees has no federal or state tax obligations.
The three conditions for your LLC to have zero U.S. tax:
- No partners or members with U.S. tax residency
- No office, warehouse, or physical presence on U.S. territory
- No employees hired in the United States
Wyoming
Most recommended
Constitución
$100
Renovación
$60/year
Ventajas
- No state income tax
- Fastest processing
- Maximum privacy — doesn't publish member data
- Lowest renewal costs
A considerar
- —Less internationally known than Delaware
New Mexico
Most affordable
Constitución
$50
Renovación
No annual renewal
Ventajas
- Lowest state fee on the market
- No annual state report required
- Full privacy — doesn't publish member data
- No state tax for non-residents
A considerar
- —Lower perceived prestige
Delaware
Most prestigious
Constitución
$250
Renovación
$300/year
Ventajas
- International recognition
- Specialized Court of Chancery
- Most developed corporate legislation
- Ideal for raising investment
A considerar
- —Highest formation and renewal costs
- —Mandatory annual Franchise Tax
Florida
Strategic location
Constitución
$125
Renovación
$138/year
Ventajas
- No state personal income tax
- Spanish-speaking business hub
- Ideal if planning future physical presence
- Good international reputation
A considerar
- —Ownership records are public
Michigan
Cheapest renewal
Constitución
$100
Renovación
$25/year
Ventajas
- Extremely low renewal costs
- Agile formation process
- Good option for companies with no state activity
A considerar
- —Less popular among international entrepreneurs
Not sure which to choose? In your free meeting, we analyze your situation and recommend the optimal state for your specific case.
Schedule free meeting