US Company Guide

Wyoming LLC vs Delaware LLC: Which One is Right for You?

1. Background

  • When registering an LLC in the U.S., Delaware and Wyoming are the two most commonly considered states by non-resident entrepreneurs. Each has its advantages, and the choice depends on your business type, tax planning, and privacy needs.

 

 State Delaware Wyoming
Legal Environment Mature corporate law, courts with rich experience Flexible legal system, supportive of small startups
Privacy Protection Member information can be kept private, though some disclosure may be required High privacy protection; member information is not public
Costs Registration fee $90 + annual fee $300 Registration fee $100 + annual fee $60
Taxes No state corporate income tax, but Franchise Tax $300/year No state corporate income tax, no franchise tax (only minimal annual fee)
Registered Agent Required Required
Investment Friendly Highly recognized by VCs Less known to investors
Management Requirements Member-managed or manager-managed Simple and flexible, suitable for small businesses and solo entrepreneurs
  1. Key Comparisons
    1. Costs and Annual Fees
    ·Delaware:
    ·Certificate of Formation: $90
    ·Registered Agent: $100–$300/year
    ·Franchise Tax: $300/year
    ·Overall: Higher annual maintenance cost
    ·Wyoming:
    ·Certificate of Formation: $100
    ·Registered Agent: $100–$200/year
    ·Annual Report Fee: approx. $60
    ·Overall: Lower cost, better for budget-conscious small businesses.
    2. Privacy Protection
    ·Delaware: Member information can remain undisclosed in registration documents, but high-level investors or banks may require disclosure.
    ·Wyoming: Member information is strictly protected; public records only show LLC name and Registered Agent, offering better privacy for non-resident entrepreneurs.
    3. Investment and Legal Environment
    ·Delaware LLC: Suitable for companies planning to raise funds, go public, or attract venture capital. The legal system is mature, with extensive court precedents.
    ·Wyoming LLC: Better for freelancers, cross-border e-commerce, lightweight SaaS, and small online businesses. Legal environment is flexible but less known for large-scale investment or M&A.
    4. Tax Considerations
    ·Delaware: Non-resident LLC members typically have no state income tax but must pay the $300 Franchise Tax.
    ·Wyoming: No state corporate income tax; annual maintenance fees are low, making it friendly for pure online businesses or small startups.

3. Recommended Use Cases

Business Type Recommended State Reason
VC-funded or planning to go public Delaware Mature legal system, high investor recognition
Small cross-border e-commerce Wyoming Low cost, strong privacy protection
Freelancer / Consulting Wyoming Simple registration, low annual fees
SaaS or online services Depends on funding plans Choose Delaware if future fundraising is likely, otherwise Wyoming suffices
  1. Summary & Recommendations
    ·Budget-sensitive & privacy-prioritized → Choose Wyoming LLC
    ·Planning fundraising, seeking investor recognition → Choose Delaware LLC
    ·Tax Planning: Both states are relatively friendly for non-resident LLCs; Delaware has a fixed $300 Franchise Tax, while Wyoming’s annual fee is lower
    ·Registration Convenience: Both states allow remote registration; using a professional Registered Agent isrecommended