Best State for Non-Resident LLC: Delaware vs. Wyoming Compared

For most non-residents, Wyoming is the best state for a non-resident LLC: it charges no state income tax, gives single-member owners the country’s strongest charging-order protection, and costs about $60 a year to maintain. Delaware is the better choice in a narrower set of cases, chiefly multi-member companies with complex governance or a real risk of investor litigation, where access to the Court of Chancery justifies the $300 annual franchise tax. Both states let you form without disclosing owners publicly, and neither requires you to live in or visit the United States. The choice really turns on your structure, your litigation exposure, and how much you want to spend each year.

What Each State Costs to Form and Maintain

Wyoming charges $100 to file Articles of Organization.¹ Delaware’s Certificate of Formation runs roughly $110. Both states add credit card processing fees when you file online. The formation cost is close enough that it shouldn’t drive the decision.

Annual costs are where the gap opens up:

Wyoming annual report: $60 minimum, or two-tenths of one mill ($0.0002) per dollar of company assets located in Wyoming, whichever is greater. The report is due the first day of the anniversary month of formation, so an LLC filed on September 20 owes its report by September 1 each year.²³
Delaware annual franchise tax: a flat $300 regardless of revenue or assets, due June 1. Late payment adds a $200 penalty plus 1.5% monthly interest on the combined tax and penalty.⁴

For a non-resident with no assets sitting in Wyoming, which describes most foreign-owned LLCs, annual state upkeep is $60 in Wyoming versus $300 in Delaware. Across five years, that’s $1,200 in savings, plus the flexibility of not carrying a fixed annual tax while revenue is still small. Add a registered agent fee of roughly $100 to $300 per year in either state, and Wyoming still costs less to keep alive.

Wyoming’s Asset Protection Advantage

Wyoming’s LLC Act gives creditors a single tool for reaching a member’s interest: a charging order. Under Wyoming Statutes 17-29-503, the charging order is the exclusive remedy, and the protection applies even when the LLC has only one member.⁵

In practice: if someone wins a personal judgment against you, they can obtain a court order directing the LLC to send any distributions that would otherwise flow to you to the creditor instead. They cannot seize the LLC’s assets, force a sale of your membership interest, or take control of the company. Foreclosure and similar remedies are explicitly off the table.⁵

This is where Wyoming quietly outperforms most alternatives. Not every state extends charging-order-only protection to single-member LLCs, and courts in some states have allowed creditors to reach further into a single-member entity. If your LLC will hold real estate, brokerage accounts, or other passive assets and you’re worried about personal creditors, this is the concrete reason to pick Wyoming.

When Delaware Is Worth the Premium

Delaware’s real product is its Court of Chancery, a specialized equity court that handles business disputes without juries. Every case is decided by a chancellor or vice chancellor who writes a reasoned opinion, and decades of opinions have produced a body of case law that business lawyers rely on nationwide.⁶

The court’s limited jurisdiction also keeps it fast. Complex disputes that would take years in a general civil court can get an expert ruling in days or weeks when circumstances demand it, and appeals to the Delaware Supreme Court are often resolved within 180 days.⁶ Delaware’s LLC Act, in Title 6, Chapter 18 of the Delaware Code, also emphasizes freedom of contract, giving members wide latitude to customize operating agreements with fewer statutory restrictions.⁷

These features matter for multi-member LLCs with complex profit-sharing, tiered voting, investor rights, or realistic prospects of litigation. For a straightforward single-member operation that may never see a courtroom, the Chancery advantage is largely theoretical, and you’re paying $300 a year for something you won’t use.

Taxes: What You Actually Pay as a Non-Resident

Wyoming has no state corporate income tax and no personal income tax. If your LLC earns nothing inside Wyoming, you owe Wyoming nothing beyond the annual report fee. Delaware does not tax LLC income earned outside its borders either, but it charges every registered LLC the $300 franchise tax regardless of where the revenue comes from.⁴

Federal tax is a separate matter that neither state changes. The IRS taxes income connected to a U.S. trade or business regardless of where the LLC was formed. A single-member LLC owned by a foreign person is treated as a “disregarded entity” for federal purposes, and income flows through to the foreign owner under the rules for nonresident aliens or foreign corporations. What matters federally is whether the business has effectively connected income, not whether the entity sits in Cheyenne or Wilmington.

One more warning: forming in Delaware or Wyoming does not exempt you from tax obligations in other states where the business actually operates. If your LLC has customers, employees, or inventory somewhere else, that state can assert taxing jurisdiction based on activity, not formation.

Privacy: A Tie

Both states let you form without listing member or manager names in the public record. Delaware’s Certificate of Formation asks only for the company name and the registered agent’s name and address.⁸ Wyoming’s Articles of Organization ask for the company name, registered agent details, and mailing and principal office addresses, but not owners or managers.⁹

Anyone searching the state database will see the LLC name and its registered agent, and nothing more. Privacy alone won’t push you toward one state over the other.

Federal Obligations That Apply Either Way

The state you choose doesn’t change any of what follows. Get these right and the state decision becomes the easier half of the job.

Form 5472 and the $25,000 Penalty

A single-member LLC owned by a foreign person must file IRS Form 5472 attached to a pro forma Form 1120 (U.S. Corporation Income Tax Return) every year, even when the LLC owes no federal income tax.¹⁰ The pro forma 1120 only needs the LLC’s name, address, and a couple of identifying items; you don’t complete the full return.

The deadline follows the Form 1120 calendar. For a calendar-year entity, that’s April 15, with an automatic extension to October 15 by filing Form 7004. Write “Foreign-owned U.S. DE” across the top of both the Form 1120 and any Form 7004. These forms cannot be filed electronically. Fax them to 855-887-7737 or mail them to the IRS in Ogden, Utah.¹⁰

The penalty for filing Form 5472 late is $25,000 per form. If the IRS notifies you and you still don’t comply within 90 days, an additional $25,000 penalty kicks in for each 30-day period the failure continues, per related party, per year.¹⁰ Non-residents who treat their LLC as a low-maintenance shelf company often discover this only after penalties have stacked up. Budget for a U.S.-based tax preparer familiar with foreign-owned entities.

Getting an EIN Without a Social Security Number

Every LLC needs an Employer Identification Number, and non-residents cannot use the IRS online application because it requires a Social Security Number. You apply on Form SS-4, and on line 7b you enter “foreign” or “N/A” to indicate the responsible party has no U.S. taxpayer identification number.¹¹¹²

Three submission methods:

Phone. Call the IRS international line at 267-941-1099 (not toll-free), Monday through Friday, 6 a.m. to 11 p.m. Eastern. The caller must be authorized to receive the EIN. You get the number during the call.
Fax. Fax Form SS-4 to 304-707-9471 from outside the United States, and include your fax number so the IRS can return the EIN. Response takes about four business days.
Mail. Send the form to IRS, Attn: EIN International Operation, Cincinnati, OH 45999. Roughly four weeks.

The IRS mails a formal confirmation, Notice CP 575, to the address on your application regardless of which method you use.¹¹ Phone is fastest, and it’s the method most registered agents and formation services use on their clients’ behalf.

Beneficial Ownership Reporting (Current Status)

The Corporate Transparency Act originally pulled most LLCs into FinCEN’s beneficial ownership reporting. A 2025 interim final rule changed the scope: all entities created in the United States are now exempt from beneficial ownership information reporting.¹³ A Delaware or Wyoming LLC is domestic because it was formed under U.S. state law, even when every owner lives abroad.

Reporting now applies only to entities formed under foreign law that register to do business in a U.S. state. Those foreign entities must file within 30 calendar days of receiving notice that their U.S. registration is effective.¹⁴ If you’re forming a new LLC under Delaware or Wyoming law, no FinCEN filing is currently required. FinCEN has signaled a revised final rule may follow, so confirm the current status before you rely on this.

Opening a U.S. Bank Account

This is where non-residents get stuck most often. U.S. banks follow strict Know Your Customer rules, and most want a physical U.S. address for the business. Some accept a registered agent’s street address or a virtual mailbox; policies vary widely.¹⁵

Expect to provide your EIN confirmation letter (CP 575) or completed Form SS-4, your Certificate of Formation or Articles of Organization plus the operating agreement, beneficial ownership information for anyone owning 25% or more or exercising control, two forms of ID per beneficial owner with at least one bearing a photo (a valid passport typically works), and personal proof of address, where foreign bank statements are usually preferred over utility bills.

Some banks require an in-person branch visit, which complicates matters for someone abroad. A growing number of banks and fintechs serve international entrepreneurs remotely, with a narrower selection and higher fees. Start banking early. It often takes longer than the LLC formation itself.

Foreign Qualification in Other States

Forming in Delaware or Wyoming does not authorize the LLC to do business anywhere else. If it has customers, employees, inventory, or a physical presence in another state, that state generally requires you to register there as a “foreign LLC” and pay its filing fees and annual taxes. Failing to register can block you from filing lawsuits in that state’s courts and can produce back taxes and penalties.

For a business that operates entirely online with no U.S. physical presence, this may not come up. If you’re hiring U.S.-based contractors, renting space, or crossing a state’s economic nexus threshold in sales, you may owe registration fees in each relevant state, typically $100 to $300 plus that state’s own annual reports. Many non-residents form in Wyoming for the low costs and strong protection, then find they need to qualify in one or two additional states where the actual activity happens.

Which State to Pick

Choose Wyoming if you’re forming a single-member LLC with straightforward operations, holding assets, or running an online business. You get charging-order-only protection that explicitly covers single-member entities, no state income tax, $60 annual reports, and the same ownership privacy as Delaware. Total annual maintenance is roughly half of Delaware’s.

Choose Delaware when you actually need what Delaware sells: the Court of Chancery, its case law, and the LLC Act’s contractual flexibility. Multi-member LLCs with layered governance, companies expecting investor disputes, and businesses that want predictable outcomes on complex questions get real value for the $300 franchise tax. If none of that describes your situation, you’re paying for infrastructure you won’t use.

Either way, the federal side is identical: Form 5472 with a pro forma 1120 every year, the $25,000 penalty risk, the SS-4 process for your EIN, and the practical work of opening a U.S. bank account from overseas. Get those pieces right and the state choice is the easier decision.

1
Wyoming Secretary of State. Instructions to Form or Register a New Business
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Wyoming Secretary of State. Business Division Filing Fee Schedule
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Wyoming Secretary of State. Annual Report Online Filing
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Division of Corporations – State of Delaware. LLC/LP/GP Franchise Tax Instructions
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Justia Law. Wyoming Statutes 17-29-503 – Charging Order
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State of Delaware. Litigation in the Delaware Court of Chancery and the Delaware Supreme Court
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Justia Law. Delaware Code Title 6 Chapter 18 – Limited Liability Company Act
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Justia Law. Delaware Code Title 6 Section 18-201 – Certificate of Formation
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Wyoming Secretary of State. LLC Articles of Organization
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Internal Revenue Service. Instructions for Form 5472
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Internal Revenue Service. Instructions for Form SS-4
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Internal Revenue Service. Instructions for Form SS-4 (Rev. December 2025)
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FinCEN. FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons
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Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension
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International Trade Administration. A Checklist for Foreign Companies Opening a Bank Account in the United States