Deep Dive9 min readJuly 27, 2026

By Alexander Stylianoudis

Best State for a Non-Resident LLC: It's Not Just About Tax

If you live outside the US and want a US LLC, almost every guide, forum reply, and formation service will tell you the same word: Wyoming. It isn't wrong so much as lazy: it answers the question as if a non-resident's only variable were the filing fee. It isn't. The right state turns on three things at once, what it costs, whether your bank will recognise the name, and how much of your ownership stays off the public record, and those three don't all point at the same state. Picking on tax alone is the mistake, because the state you form in barely changes your tax at all. What it does change is your banking odds and your privacy, and those are worth weighing deliberately.

So this post does two things. It ranks New Mexico, Wyoming, and Delaware for a non-resident owner honestly, across all of those factors rather than fees alone: New Mexico usually wins on cost, Wyoming wins if a bank or payment processor gives you trouble, and Delaware is for one specific person only. And it spends real time on the layer that actually moves the money, the costs that are identical in every state, the mandatory federal filing, the registered agent, and the cross-border tax return, which are several times larger than any gap between states and carry a five-figure penalty if you get one wrong. If you'd rather have your own profile weighed against all of it than read this end to end, the free quiz does exactly that in about five minutes.

This article is for general information only and does not constitute legal, tax, or financial advice. Laws and regulations change frequently. Consult a qualified professional before making decisions based on this content.

The decision that actually costs money isn't the state

A US resident who forms an LLC in the wrong state gets punished by their home state, which makes them register the company a second time (foreign qualification) and pay twice. A non-resident with no US base skips that entire trap, because there is no home state to answer to. That's the good news, and it's why "just form in Wyoming" mostly works for people abroad.

The catch is that skipping the state trap doesn't make a non-resident LLC cheap. It just moves the real cost to three line items that are the same in every state:

Cost	What it is	Roughly
Registered agent	A US address in the formation state to receive legal mail. Mandatory, and a non-resident can't be their own	~$125/yr
Form 5472 + pro-forma 1120	Federal filing every foreign-owned single-member LLC must submit, even with zero revenue	Prep ~$500 to $1,500/yr
Cross-border tax return	Reporting the income where you are actually tax resident	Varies by country

Form 5472 is the one that matters most, and the one cheap formation checkouts rarely mention. Any foreign-owned single-member US LLC has to file it annually alongside a pro-forma Form 1120, regardless of whether the company made a dollar. The penalty for not filing is $25,000 per form, per year. Set that number next to the thing everyone argues about, the $60 difference between Wyoming and New Mexico, and the priorities sort themselves out. Pick the state in five minutes and spend the saved hours making sure the 5472 gets filed.

For the full non-resident picture, including whether you even need a US entity and how a Wyoming LLC compares to a Delaware C-Corp, see Non-US Founder, US Company: When You Actually Need One.

The three states, ranked for a non-resident

Everything below assumes the common non-resident setup: a single-member LLC, owned by someone with no US residence, running an online or service business with no US employees, office, or inventory. Change those facts and the ranking can change, which is exactly what the quiz checks.

New Mexico: the cheapest state for a non-resident LLC

New Mexico costs $50 to form and $0 every year after that. It has no annual report at all, which is close to unique, so once the company exists the only recurring state-side cost is the registered agent. New Mexico also keeps member names out of public filings, so ownership stays private without paying extra for it.

For a bootstrapped nomad or a solo founder running a lean online business, this is usually the right answer. Lowest cost, no annual deadline to miss, and privacy included. The one thing New Mexico doesn't have is a marketing reputation, which occasionally matters for the next point.

Wyoming LLC for a non-resident: the one banks recognise

Wyoming costs $100 to form and a $60 minimum annual report. It offers the same public-record privacy as New Mexico (no member or manager names disclosed) plus strong asset-protection statutes. On paper it's slightly more expensive than New Mexico for slightly more paperwork.

What Wyoming actually buys you is recognition. Because it has spent years marketing itself as the non-resident's state, banks, payment processors, and fintechs like Mercury, Relay, and Wise see Wyoming LLCs constantly and onboard them smoothly. A New Mexico LLC clears the same checks, but occasionally draws an extra question. If your business lives or dies by getting a US business account and a Stripe approval on the first try, the $60 a year is cheap insurance. That is the honest case for Wyoming over New Mexico, and it's the only one that survives scrutiny.

If you're weighing these two directly, Wyoming vs New Mexico puts them side by side.

Delaware LLC for non-US residents: for one person only

Delaware costs $110 to form and $300 every year in flat franchise tax, and it discloses more than the other two. For a non-resident running an online business, that's more money and less privacy for benefits they will never use. Delaware's advantage is a court system and body of corporate law built for companies with outside shareholders, boards, and priced funding rounds.

The one person who should pick Delaware is the non-resident planning to raise money from US venture investors inside the next year or two, and that person almost certainly wants a Delaware C-Corp, not an LLC, because US funds rarely invest in LLCs. For everyone else, the honest read is that you probably don't need Delaware. If you're comparing the structures rather than the states, Delaware C-Corp vs Wyoming LLC is the matchup that matters.

Cost, side by side

The numbers behind the ranking, for the non-resident case (no US home state, so no foreign qualification):

	New Mexico	Wyoming	Delaware
Formation fee	$50	$100	$110
Annual state cost	$0	$60 min report	$300 franchise tax
Public owner privacy	Yes	Yes	Weaker
Registered agent	~$125/yr	~$125/yr	~$125/yr
Year one	~$175	~$285	~$535
Each year after	~$125	~$185	~$425

(Verify current rates with the state and a cross-border advisor before filing; fees move.)

Notice what the table does and doesn't show. The spread between the cheapest and most expensive option is about $300 a year. The Form 5472 preparation that applies identically to all three columns is $500 to $1,500 a year, and the penalty for skipping it is $25,000. The state decision is real, but it's the rounding error, not the headline. For the same cost breakdown across all 50 states, the real cost of forming an LLC by state study has the full dataset.

The tax question everyone gets backwards

Choosing a state does not change your US federal tax, and it does not change what you owe at home. A single-member LLC owned by a non-resident is a disregarded entity by default. If it has no US trade or business and no effectively connected income, it generally owes no US federal income tax at the entity level, whichever state formed it. New Mexico does not make the income more tax-free than Wyoming does; the federal treatment is the same.

The income still gets taxed. It flows through to you and is taxable where you are tax resident, under your own country's rules. A US LLC is a liability shield and a US-facing invoicing and banking vehicle, not a way to make income disappear. Anyone selling a US LLC as a zero-tax structure is either ignoring your home country's rules or your controlled-foreign-company exposure, and both of those bills are larger than any state fee. To model the actual federal, withholding, and personal layers for your situation, run it through the tax calculator.

The mistake to avoid

The predictable failure mode for non-resident owners isn't picking the wrong state. It's spending a week comparing Wyoming and New Mexico threads, forming the company, opening the bank account, celebrating, and then never hearing the words "Form 5472" until a $25,000 notice explains them. The state choice is the fun, visible, low-stakes part. The compliance filing is the boring, invisible, high-stakes part. Reverse the amount of attention most guides give each, and a non-resident LLC is genuinely straightforward to run.

Pick New Mexico if you want the lowest cost and quiet privacy. Pick Wyoming if banking friction would hurt and you want the name banks know. Pick Delaware only if US venture money is on the near horizon, and if it is, look at a C-Corp instead. Then put the real energy into the federal filing. If you want that whole decision made for you against your specific profile, the free quiz is built for exactly this.

FAQ

What is the best state for a non-resident to form an LLC?

For most non-residents running an online or service business, New Mexico offers the lowest total cost: $50 to form, $0 in annual state fees, and no public disclosure of owners. Wyoming is the better pick if smooth bank and payment-processor onboarding matters, because its name is widely recognised. Delaware only makes sense for founders raising from US venture investors, who usually need a C-Corp rather than an LLC.

Is Wyoming or New Mexico better for a non-resident LLC?

New Mexico is cheaper: $50 to file versus $100, and $0 per year versus Wyoming's $60 minimum annual report, with the same public-record privacy. Wyoming's advantage is reputation. Banks, Stripe, Mercury, and similar services see Wyoming LLCs constantly and tend to onboard them with fewer questions. If getting a US business account approved on the first attempt is critical, Wyoming's small extra cost can be worth it.

Do non-residents pay US tax on a US LLC?

Usually not at the federal level, if the LLC is a single-member disregarded entity with no US trade or business and no effectively connected income. The income instead flows through to the owner and is taxed where the owner is tax resident. The formation state does not change this. However, every foreign-owned single-member LLC must still file Form 5472 with a pro-forma Form 1120 each year, or face a $25,000 penalty.

Does a non-resident need a registered agent?

Yes, in every state. A registered agent is a person or company with a physical address in the formation state who receives legal and official mail for the LLC. A non-resident with no US address cannot serve as their own agent, so this is a mandatory recurring cost of roughly $125 per year regardless of which state is chosen.

Can a non-resident open a US bank account for the LLC?

Often yes, but not with traditional branch banks, which usually require an in-person visit. Fintech providers such as Mercury, Relay, and Wise are the common routes and can onboard non-resident-owned LLCs remotely, though approval is not guaranteed and depends on the country and industry. This banking-recognition factor is the main practical reason some non-residents choose Wyoming over cheaper New Mexico.

Which state is cheapest overall for a non-resident LLC?

New Mexico, on both measures: the lowest formation fee among the popular non-resident states at $50, and the only one with no recurring annual state cost at all. After the registered agent, a New Mexico LLC can cost roughly $125 a year to maintain on the state side, versus about $185 for Wyoming and $425 for Delaware.

Sources

Primary sources for the rates and rules cited in this article:

About the author

Alexander Stylianoudis · Legal and Financial Executive

Alexander has spent over 15 years working with US, UK, Canadian, and European companies. He built IncorpAssist after getting tired of searching for objective incorporation guidance and finding formation-service marketing instead.