Best US States for a Foreign-Owned LLC in 2026
Wyoming, Delaware, New Mexico, Florida, or Texas? We compare the five most commonly considered states for foreign-owned LLC formation on cost, privacy, and ease of use — with use-case-based picks at the end.
Key Takeaways
- Wyoming is the best default for most foreign-owned LLCs (e-commerce, services, bootstrapped SaaS)
- Delaware's $300 flat annual tax is worth it only for investor-track entities
- New Mexico is the cheapest recurring option — $20 triennial report under the current revised act
- Florida and Texas force public disclosure of members/managers and have steep annual obligations
Why Your State Choice Matters
As a non-resident forming a US LLC, you can choose any state regardless of where your business operates. Since most foreign-owned LLCs operate entirely outside the US, you are essentially shopping for the best regulatory environment. The state you choose affects three things directly:
- Cost — Formation fees, annual reports, and franchise taxes vary dramatically
- Privacy — Some states publish member/manager names publicly; others do not
- Simplicity — Annual compliance requirements differ by state
Your state choice does not affect your federal tax obligations. Every foreign-owned LLC must file Form 5472 with the IRS regardless of where it is formed. State choice is about ongoing costs and privacy.
Side-by-Side Comparison
Here is how the five most commonly considered states stack up on the factors that matter most to foreign-owned LLC owners. All figures are from official Secretary of State or revenue/tax sources current as of May 2026.
| Factor | Wyoming Recommended | Delaware | New Mexico | Florida | Texas |
|---|---|---|---|---|---|
| Formation Cost | $100 | $110 | $50 | $125 | $300 |
| Annual Fee | $60/year | $300/year | $20 every 3 years | $138.75/year | Franchise tax + PIR |
| Franchise Tax | None | $300 flat alt-entity tax | None for default LLCs | None for default LLCs | 0.375% retail / 0.75% other; $2.65M threshold (2026) |
| Privacy | Excellent | Good | Excellent | Poor | Poor |
| Foreign Owner Friendly | Excellent | Good | Good | Fair | Fair |
Wyoming Recommended
Formation: $100
Annual Fee: $60/year
Franchise Tax: None
Privacy: Excellent
Delaware
Formation: $110
Annual Fee: $300/year
Franchise Tax: $300 flat alt-entity tax
Privacy: Good
New Mexico
Formation: $50
Annual Fee: $20 every 3 years
Franchise Tax: None for default LLCs
Privacy: Excellent
Florida
Formation: $125
Annual Fee: $138.75/year
Franchise Tax: None for default LLCs
Privacy: Poor
Texas
Formation: $300
Annual Fee: Franchise tax + PIR
Franchise Tax: 0.375% retail / 0.75% other; $2.65M threshold (2026)
Privacy: Poor
Wyoming — The Top Choice for Foreign Owners
Wyoming has earned its reputation as the gold standard for foreign-owned LLCs, and for good reason. The state was the first in the US to create the LLC entity type back in 1977, and it has continued to refine its business-friendly legislation ever since.
Advantages
- No state income tax on LLC earnings
- No franchise tax — just a $60 annual report fee
- Member and manager names are not public record
- Strong asset protection with charging order protections
- No requirement for members to be US residents
- Lifetime proxy allows a nominee to manage filings
- Simple annual report — can be filed online in minutes
Considerations
- Not as prestigious as Delaware for investor-funded companies
- Registered agent required (typically $50-150/year)
For a single-member foreign-owned LLC that primarily provides services or sells digital products, Wyoming is almost always the optimal choice. The total annual cost is roughly $110-210 (annual report + registered agent), which is the lowest of any mainstream formation state.
Delaware — The Corporate Favorite
Delaware is the most famous incorporation state in the US, home to over 60% of Fortune 500 companies. However, its advantages are primarily designed for C-Corporations raising venture capital, not for single-member LLCs owned by non-residents.
Advantages
- Court of Chancery — specialized business court with experienced judges
- Well-established case law for business disputes
- Recognized and trusted worldwide by investors and banks
- No state income tax on out-of-state income
Drawbacks for Foreign LLCs
- $300/year franchise tax — regardless of revenue
- Total annual cost: ~$450-550 (franchise tax + registered agent)
- Court of Chancery advantage is irrelevant for most small LLCs
- No additional privacy over Wyoming
If you are planning to raise venture capital or bring on US-based investors, Delaware makes sense. For a straightforward foreign-owned LLC, you are paying an extra $240/year compared to Wyoming with no meaningful advantage.
New Mexico — The Budget Option
New Mexico offers the most cost-effective LLC formation in the country. With a $50 formation fee and zero annual fees, it is the cheapest state to maintain an LLC long-term.
Advantages
- Lowest formation cost — just $50
- No annual report requirement
- No annual fee or franchise tax
- Strong privacy — no member disclosure on public filings
- Only ongoing cost is your registered agent
Considerations
- Less well-known — some banks or payment processors may be less familiar
- No annual report means less oversight (could be a positive or negative)
- Fewer formation service providers specialize in NM
New Mexico is an excellent choice if your primary goal is minimizing costs. The only ongoing expense is your registered agent ($50-100/year). However, if you plan to open a US bank account, Wyoming's stronger reputation may make the process smoother.
Florida — Practical but Disclosure-Heavy
Florida is straightforward to form in and the online queue tends to be only a few business days behind. But it sits at the disclosure-heavy end of the spectrum and the annual-report regime is intolerant of missed deadlines.
Advantages
- $125 total to form ($100 Articles + $25 registered agent designation)
- Sunbiz online queue is transparent — processing dates published live
- No franchise tax on default pass-through LLCs (income tax applies only if taxed as a corporation)
Drawbacks for Foreign LLCs
- Annual report due May 1 — every year — with a $400 late fee after the deadline
- All filed information is public record (managers/representatives may be listed; members should NOT be listed)
- If the LLC is taxed as a corporation, Florida F-1120 must be filed every year even with no tax due
Florida only makes sense as a formation state if the owner already has Florida ties (real estate, residence, US-based operations). For a pure foreign-owned online business with no Florida nexus, Wyoming or New Mexico is cheaper, more private, and more forgiving.
Texas — Highest Cost, Most Public
Texas is the most disclosure-heavy of the five states at formation and keeps every LLC in the franchise-tax / Public Information Report regime regardless of revenue.
Advantages
- No personal state income tax
- 2026 franchise no-tax-due threshold raised to $2.65M — most small LLCs owe $0
- SOSUpload provides faster delivery for online filings
Drawbacks for Foreign LLCs
- $300 formation fee — highest in this group
- Certificate of formation requires names and addresses of initial managers (or initial members if member-managed) — public record
- Public Information Report (PIR) due May 15 every year, even for entities below the no-tax-due threshold
- Franchise tax rates: 0.375% retail/wholesale, 0.75% other; EZ rate 0.331% up to $20M
Texas formation is only worth considering if the owner already operates in Texas or plans to. As a pure formation domicile for a foreign-owned online LLC, Texas combines the highest formation fee, the most disclosure, and recurring PIR obligations — with no offsetting benefit a non-resident actually uses.
Best Fit by Use Case
Different businesses optimize for different things. Here is how the five states line up against the most common foreign-owner use cases.
E-commerce → Wyoming
Sales-tax collection is driven by customer-state nexus rules, not the formation state. So the formation state should minimize recurring friction. Wyoming wins on low formation cost, immediate online activation, member privacy, and a manageable $60 minimum annual report.
Bootstrapped SaaS → Wyoming
Solo-founder SaaS with no immediate investor plans is identical to e-commerce on state mechanics. Wyoming is the most economical choice and gives you all the privacy you need.
Investor-Track SaaS → Delaware
If you are likely to raise venture capital, issue preferred equity, or convert to a C-corp later, Delaware is the strategic domicile. Mature entity law, sparse certificate, and the strong expedited system make later conversion clean. Pay the $300 annual tax as the cost of investor optionality.
Services → Wyoming
Service businesses owned by foreign non-residents are sensitive to privacy and banking simplicity. Wyoming's current articles avoid member/manager disclosure and the annual regime is explicit. Wyoming is the safe pick.
Holding Company → New Mexico (cheapest) or Wyoming (safest)
For a passive holdco optimizing for the lowest official recurring filing cost, New Mexico wins: $50 formation + $20 triennial report and no member/manager names on the certificate. The caveat is that the New Mexico tax department language around "registered to do business" pass-through entities is more nuanced than the cheap-state lore suggests. If you want clearer, more explicit recurring rules, choose Wyoming instead.
What About Nevada?
Nevada used to compete with Wyoming on the privacy-and-low-tax marketing pitch, but its actual fee stack — $425 formation, $350 annual list, and a $200 state business license — makes it materially more expensive than Wyoming with no meaningful additional benefit for a foreign-owned online LLC. We do not recommend Nevada over Wyoming for this audience.
Our Recommendation
For most foreign-owned LLCs, we recommend Wyoming. It offers the best combination of low cost, strong privacy, immediate online activation, and widespread recognition. Banks, payment processors, and service providers all know what a Wyoming LLC is and how to handle it.
Choose Delaware if you are on an investor track (VC, preferred equity, or planned C-corp conversion) — the $300 annual tax is the cost of that optionality.
Choose New Mexico for the lowest official recurring filing cost ($50 formation + $20 triennial). Acceptable for a holdco; some banks may be less familiar.
Avoid Florida and Texas as pure formation domiciles for a foreign-owned online LLC — they combine higher recurring obligations with public-record disclosure of members or managers, with no offsetting benefit a non-resident actually uses.
Next Steps
Once you have decided on your state, you need a formation service to file your Articles of Organization and provide a registered agent. We recommend these trusted providers:
Firstbase
All-in-one formation package including registered agent, EIN application, operating agreement, and US business address. Popular with international founders.
doola
Formation, EIN, registered agent, bookkeeping, and compliance in one platform. Excellent option if you want ongoing support beyond formation.
After formation, your next steps are:
