Best State for LLC: Where to Form Yours (2026)

Best State for LLC at a Glance

First-year packages include the state filing fee, registered agent, EIN and a US mailing address. Yearly state costs are the state’s own fees; check the state’s guide before you file, because fees can change.

How to Choose the Best State to Form an LLC

1. Where do you live and work? If it is a US state, start with that state. If you live abroad, any state is open to you.
2. Will you raise money from US investors? If yes, Delaware (usually as a C corporation). If no, skip Delaware’s $400 yearly tax.
3. What will it cost every year? The formation fee is paid once; the yearly report or tax is paid forever. Compare the yearly number first.
4. Do you want privacy? Wyoming, New Mexico and Delaware do not list members in the public formation filing.
5. Will you hold inventory or staff in a state? That state may tax you or ask you to register there, whatever state you form in.

Best State for LLC If You Live in the US

For most people in the US, the best state to form an LLC is the state where you live and run the business. If you form in Wyoming but work from California, California still treats your LLC as doing business there. You then register it as a “foreign LLC” in California and pay California’s fees and $800 minimum franchise tax anyway, plus Wyoming’s fees and a registered agent. Forming at home avoids paying twice.

Forming out of state can still make sense if you have no physical presence anywhere, or if you want a specific state’s rules for a holding company. Get local tax advice before you do it.

Best State for LLC for Non-US Residents

If you live outside the US, you have no home state, so you can pick the state with the lowest yearly cost and simplest rules. That is why most founders abroad choose Wyoming or New Mexico:

• New Mexico wins on cost: no annual report and no yearly state fee. You only renew your registered agent.
• Wyoming wins on familiarity: banks, payment platforms and marketplaces see Wyoming LLCs every day, and it has strong asset-protection rules, for a $60 yearly report.
• Delaware only makes sense if you plan to raise money from US investors.

Both states work with US bank accounts and Stripe. Approval depends on your details, not the state. See Wyoming vs New Mexico LLC and our full non-resident LLC guide.

Best State for LLC Privacy

If you want your name off public records, the best states are New Mexico, Wyoming and Delaware. None of them asks for member names in the public formation filing, and your registered agent’s address appears instead of yours. Your details still go to the IRS with your EIN application and to your bank, so an LLC is private, not secret. Read more in our anonymous LLC guide.

Best State for LLC Taxes

Most LLC tax is federal and depends on how the LLC is taxed, not where it was formed. State tax matters when you live or do business in a state. Wyoming, Texas, Florida, Nevada, South Dakota and Alaska have no state personal income tax, which helps owners who live there. For a non-US owner with no US office, staff or inventory, state income tax usually does not apply to the LLC’s foreign profits, so the yearly state fee is the cost that matters most.

States to Avoid Unless You Live There

• California: $800 minimum franchise tax every year, even with no income
• Massachusetts: $500 annual report
• Delaware: $400 annual LLC tax
• Nevada: about $350 a year for the annual list and business license
• Maryland: $300 annual report

See every state’s yearly filing in our LLC annual report by state guide.

Best State for LLC for Amazon, Shopify and Online Business

For an online store, Amazon FBA business or freelance company run from abroad, Wyoming and New Mexico are the usual picks. Keep in mind that inventory stored in US warehouses, such as Amazon FBA stock, can create sales tax or other obligations in the states where it sits, whatever state you formed in.

Other States People Ask About

Nevada

Nevada has no state income tax and a strong business reputation, but it is one of the most expensive states to keep an LLC: about $350 a year for the annual list and state business license, and its annual list names managers or members. For most small businesses and founders abroad, Wyoming offers the same no-income-tax benefit for far less. See our Nevada LLC guide.

South Dakota

South Dakota has no state income tax and is popular for trusts and some holding companies. It files an annual report each year. It is a reasonable choice, but it is less familiar to banks and platforms than Wyoming. See our South Dakota LLC guide.

Alaska

Alaska has no state personal income tax and files a biennial report every two years ($100). It rarely makes sense unless you live or do business there. See our Alaska LLC guide.

How an LLC Is Taxed, Whatever the State

• Single-member LLC: by default a “disregarded entity”. A US owner reports the profit on their personal return.
• Multi-member LLC: by default taxed as a partnership and files a partnership return.
• Optional corporate tax: an LLC can elect to be taxed as a corporation. S corporation status is only for US owners.
• Foreign-owned single-member LLC: files Form 5472 with a pro forma Form 1120 every year, and often owes no US income tax without US-connected income.

Because federal tax works the same way in every state, the state you choose mainly changes your yearly state fees, privacy and paperwork.

Best State for LLC: FAQs

Related Guides

• Wyoming vs New Mexico LLC
• Delaware vs Wyoming LLC
• LLC cost and requirements by state
• US LLC for non-residents