"Which state should I form my LLC in?" is the first question most founders ask, and the internet is full of answers that push Delaware, Wyoming or Nevada. The honest answer is simpler: if you live and operate in the US, your home state is almost always the best choice. The famous "business-friendly" states mainly help two groups — start-ups raising investment, and people who live outside the US. This guide explains why, and how to pick if you are in one of those groups.
1. Why your home state usually wins
An LLC is registered with one state, but it has to be registered in every state where it actually does business — where you have an office, employees, a shop, or where you physically provide services. If you live in Georgia and run a landscaping business there, a Wyoming LLC still has to register in Georgia as a "foreign LLC", pay Georgia's fees, follow Georgia's rules and pay Georgia tax on its profit.
So forming out of state does not remove your home state's costs. It adds a second state's costs on top. That is why, for a local business, the cheapest and simplest option is to form where you are.
2. The "foreign LLC" trap
Here is what forming in Wyoming while operating in California actually costs you:
- Wyoming formation ($100) and Wyoming annual report ($60 minimum) and a Wyoming registered agent.
- California foreign LLC registration, a California registered agent, California's Statement of Information — and California's $800 minimum franchise tax every year, which applies to any LLC doing business there, wherever it was formed.
You end up with two sets of filings, two agents, two deadlines and no tax saving. The same logic applies to almost every state. If you are not sure whether your activity counts as "doing business" in your home state, assume it does.
3. When Wyoming makes sense
Wyoming is the right choice for a specific type of founder: someone who does not physically operate in any US state. That usually means:
- Non-US residents running an online business, an e-commerce store, a consultancy or a software company from abroad.
- US digital nomads with no fixed office or employees.
- Holding companies that own assets rather than run a business.
What Wyoming offers: a $100 filing approved instantly online, a $60 minimum annual report, no state income tax, no franchise tax, and member names kept off the public record. It is the most common choice for founders outside the US — see our non-resident LLC guide.
4. When Delaware makes sense
Delaware is the home of US corporate law. Investors, venture capital funds and lawyers know its rules, its Court of Chancery handles business disputes quickly, and most start-ups that raise money are Delaware entities (usually C-Corporations rather than LLCs).
Choose Delaware if you plan to raise money from US investors or expect to have many shareholders. Otherwise it is an expensive habit: a $110 filing plus a flat $400 franchise tax every year regardless of income, and you would still register in your home state. Our Wyoming vs Delaware comparison goes deeper.
5. Nevada, Florida and Texas
Nevada has no state income tax and strong privacy, but it is expensive to keep: $425 to form (three filings bundled together) and $350 a year for the annual list and state business licence. It makes sense mainly if you live or trade in Nevada.
Florida and Texas are popular because they have no personal income tax and large economies — but that advantage only reaches you if you actually live there. Form there because you are there, not as a tax strategy from elsewhere.
6. State fee comparison
State fees only, checked on official state websites in September 2026. Every state also requires a registered agent, and your Incofile package fee is shown separately before you pay.
| State | Filing fee | Yearly state fee | State income tax on LLC profit | Best for |
|---|---|---|---|---|
| Wyoming | $100 | $60 minimum | None | Non-US owners, online businesses |
| Delaware | $110 | $400 franchise tax | None if no Delaware business | Start-ups raising investment |
| Nevada | $425 (3 filings) | $350 | None | Businesses based in Nevada |
| Florida | $125 | $138.75 | None | Businesses based in Florida |
| Texas | $300 | $0 (report required) | None | Businesses based in Texas |
| Georgia | $100 | $50 | Yes, on owners' returns | Businesses based in Georgia |
| California | $70 | $800 minimum tax + $20 every 2 years | Yes, on owners' returns | Businesses based in California |
| New York | $200 + publication | $9 every 2 years + income-based fee | Yes, on owners' returns | Businesses based in New York |
Want the numbers for your own state? Use the free LLC cost calculator — it covers all 50 states and DC.
7. How to decide in 60 seconds
- Do you live in the US and run the business from where you live? Form in that state. Done.
- Do you live outside the US and run the business online? Wyoming is the usual choice; Delaware if investors expect it.
- Will you raise money from US investors? Delaware — and talk to a lawyer about whether you need a C-Corporation instead of an LLC.
- Still unsure? Take our two-minute business entity quiz or ask us before you order.
Whichever state you choose, Incofile prepares and files the paperwork, provides a registered agent, and tracks your yearly deadlines. Start your LLC or compare packages.
General information, not legal or tax advice. State fees are set by each state and can change; the exact total is shown before you pay. September 2026.