Best State for Non-Resident LLC: Delaware or Wyoming?

For most non-residents, Wyoming is the best state to form an LLC: no state income tax, strong single-member asset protection, and annual upkeep around $60. Delaware is the better choice if you expect complex multi-member governance or meaningful litigation risk, because its Court of Chancery and deep LLC case law make outcomes more predictable. Both states let you form the company without putting member or manager names in the public record, and neither requires you to live in or visit the United States. The decision really turns on how your business is structured, how disputes are likely to be handled, and how much you want to spend each year to keep the entity in good standing.

What Actually Differs Between the Two States

Privacy is a tie. Delaware’s Certificate of Formation only requires the company name and the registered agent’s name and address.¹ Wyoming’s Articles of Organization ask for the company name, registered agent details, and office addresses, but not the names of owners or managers.² Anyone searching either state’s database sees the LLC name and its registered agent, nothing more. If privacy is the reason you’re comparing, you can stop there — neither state has a meaningful edge.

Asset protection is where Wyoming pulls ahead. Under Wyoming law, a charging order is the exclusive remedy a creditor can use to reach a member’s interest in the LLC, and that exclusivity applies even when the LLC has only one member. In practice: a creditor who sues you personally can get an order redirecting distributions that would otherwise flow to you, but cannot seize LLC assets, force a sale of your membership interest, or take control of the company. Foreclosure is explicitly off the table.³ Not every state extends this protection to single-member LLCs, and courts elsewhere have let creditors reach further into the entity. For a non-resident running a holding company or a one-person operation, this is the single biggest reason to pick Wyoming.

Delaware’s edge is the Court of Chancery. It’s a specialized equity court that hears business disputes without juries, decides each case through a chancellor or vice chancellor, and produces written opinions that attorneys nationwide rely on.⁴ Complex disputes can get expert rulings quickly, and appeals go to the Delaware Supreme Court, which often resolves them within 180 days. Delaware’s LLC Act also emphasizes freedom of contract, letting members customize operating agreements with fewer statutory limits.⁵ If you run a single-member business and never expect a partnership fight or investor lawsuit, this advantage stays theoretical. If you have co-owners, outside investors, or custom profit splits, it starts to matter.

Annual Costs: Where Wyoming Wins

Formation fees are close. Wyoming charges $100 to file Articles of Organization.⁶ Delaware’s Certificate of Formation runs roughly $110. Both add credit card fees for online submissions.

Recurring costs are where the gap opens:

Wyoming annual report: $60 minimum, or two-tenths of one mill ($0.0002) per dollar of company assets located in Wyoming, whichever is greater. It’s due on the first day of the anniversary month of formation. File on September 20, and your report is due September 1 each year.⁷⁸
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.⁹

A non-resident with no Wyoming-based assets pays $60 a year in Wyoming versus $300 in Delaware. Over five years that’s a $1,200 difference. Add a registered agent fee of roughly $100 to $300 a year in either state and Wyoming still comes out cheaper on recurring costs. For an early-stage company or a holding entity that generates little revenue, that matters.

State Taxes and the Federal Picture

Wyoming has no state corporate income tax and no personal income tax. If your LLC earns no income inside Wyoming, you owe the state nothing beyond the annual report fee. Delaware also does not tax LLC income earned outside its borders, but every Delaware LLC owes the $300 franchise tax regardless of where revenue is generated.⁹

State choice does not change your federal obligations. The IRS taxes income connected to a U.S. trade or business regardless of which state the LLC was formed in. A single-member LLC owned by a foreign person is treated as a “disregarded entity” for federal tax purposes, so income flows through to the foreign owner and is taxed under the rules for nonresident aliens or foreign corporations. The state you pick doesn’t change that analysis — what matters federally is whether the business has effectively connected income.

Forming in Delaware or Wyoming also doesn’t exempt you from tax in states where the business actually operates. If your LLC has customers, employees, or inventory somewhere else, that state can assert its own taxing authority.

Form 5472: The Filing That Catches Non-Residents Off Guard

This is the obligation most non-residents miss. A single-member LLC owned by a foreign person must file IRS Form 5472 attached to a pro forma Form 1120 every year, even when the LLC owes no federal income tax.¹⁰ The pro forma 1120 only asks for the LLC’s name, address, and a few identifying items; you aren’t completing a full corporate return.

Deadlines follow the Form 1120 calendar. For a calendar-year LLC, that’s April 15, with an automatic extension to October 15 if you file Form 7004. Write “Foreign-owned U.S. DE” across the top of both the Form 1120 and the Form 7004. Neither can be filed electronically — they must be faxed to 855-887-7737 or mailed to the IRS in Ogden, Utah.¹⁰

The penalty for late or missing Form 5472 is $25,000 per form. If the IRS notifies you and you still don’t file within 90 days, another $25,000 kicks in for each 30-day period the failure continues.¹⁰ This applies per related party, per year. Non-residents who treat their LLC as a dormant shelf entity often find out about this filing only after penalties have stacked up. Budget for a U.S.-based tax preparer who handles foreign-owned entities. This is not a casual filing.

Getting an EIN Without a Social Security Number

You need an Employer Identification Number before you can open a bank account, pay contractors, or file federal returns. You apply with Form SS-4, but because you have no SSN or ITIN, you can’t use the IRS online application.¹¹ On line 7b, enter “foreign” or “N/A” to indicate the responsible party has no U.S. taxpayer identification number.¹²

Three ways to submit:

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 and answer questions about the form. You get the number during the call.
Fax: fax the completed Form SS-4 to 304-707-9471 from outside the United States, with your return fax number. Expect a response in about four business days.
Mail: send to IRS, Attn: EIN International Operation, Cincinnati, OH 45999. Approximately four weeks.

Whichever method you use, the IRS mails a formal confirmation (Notice CP 575) to the address on your application.¹¹ Phone is the fastest route, and it’s the one most registered agents and formation services use on behalf of non-resident clients.

Opening a U.S. Bank Account From Abroad

This step delays more non-residents than the formation itself. U.S. banks must follow strict Know Your Customer rules, and most want a physical U.S. address for the business. Some will accept a registered agent address or a virtual mailbox, but policies vary widely.¹³

Expect to provide:

Your EIN confirmation (Notice CP 575, or a copy of the submitted Form SS-4)
Your Certificate of Formation or Articles of Organization, plus the operating agreement
Beneficial ownership information for anyone who owns 25% or more of the entity and anyone who controls it
Two forms of photo ID for each beneficial owner, with a valid passport typically meeting the requirement
Personal proof of address for the person opening the account; foreign bank statements are usually preferred over utility bills

Some banks require an in-person branch visit, which obviously complicates things when you live abroad. A growing set of banks and fintech platforms serve international founders remotely, but the selection is narrower and fees run higher. Start this process early. It often takes longer than forming the LLC.

A Note on FinCEN Beneficial Ownership Reporting

Under a 2025 interim final rule, all entities created in the United States are exempt from the Corporate Transparency Act’s beneficial ownership information reporting.¹⁴ A Delaware or Wyoming LLC qualifies as domestic because it was formed under U.S. state law, even when every owner lives abroad. The requirement now applies only to entities formed under the law of a foreign country that register to do business in a U.S. state, which must file within 30 calendar days of effective registration.¹⁵ FinCEN has indicated it may issue a revised final rule, so check the current status before you rely on the exemption.

The Hidden Cost: Foreign Qualification

Forming in Delaware or Wyoming does not authorize your LLC to do business anywhere else. If the company has customers, employees, inventory, or a physical presence in another state, that state will generally require you to register as a “foreign LLC,” pay its filing fees, and comply with its own annual reporting. Skipping that step can bar you from suing in that state’s courts and trigger back taxes, penalties, and fines.

For a non-resident, this is where the calculation can shift. If your business operates entirely online with no U.S. physical presence, foreign qualification may never come up. If you hire U.S.-based contractors, rent warehouse space, or cross a state’s economic nexus threshold on sales, you could owe registration in each state where activity happens. Foreign qualification fees typically run $100 to $300 per state, plus that state’s own annual report. Plenty of non-residents form in Wyoming for the low cost and asset protection, then find they need to qualify in one or two additional states where their business actually operates — eroding part of the savings.

Making the Call

Pick Wyoming if you’re forming a single-member LLC with straightforward operations, no U.S. physical presence, and no immediate expectation of partnership disputes. You get the strongest statutory asset protection for single-member entities, no state income tax, a $60 annual report, and the same ownership privacy Delaware offers. Total yearly maintenance comes to roughly half of Delaware’s.

Pick Delaware if your LLC has multiple members with custom governance, outside investors, or a realistic chance of ending up in business litigation. The $300 franchise tax buys access to the Court of Chancery and the most developed body of LLC case law in the country, and Delaware’s LLC Act gives you more room to tailor the operating agreement.

Whichever state you choose, the federal side is identical: Form 5472 with a pro forma 1120 every year, the $25,000 penalty if you miss it, the EIN application without an SSN, and the practical work of opening a U.S. bank account from overseas. Get those pieces handled, and the state-level question becomes the smaller part of the decision.

1
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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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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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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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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International Trade Administration. A Checklist for Foreign Companies Opening a Bank Account in the United States
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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