The Real Cost of Forming an LLC in Every US State (2026)

Here is the number most incorporation guides bury: for an owner-operator, choosing Delaware adds roughly $2,235 over five years on top of what you would pay anyway. That is $110 to form plus about $425 every year in franchise tax and a registered agent.

What that $2,235 means depends entirely on who you are. For a venture-backed SaaS startup it is a rounding error, and Delaware is genuinely the smart choice: investors and their lawyers expect a Delaware entity, the Court of Chancery and two centuries of case law make disputes predictable, and the financing paperwork is standardized down to the template. Trying to save it by forming elsewhere usually costs more than it saves once you have to convert later.

For a company with real complexity, co-founders, equity to divide, or a genuine privacy need, it can still be money well spent. But for a solo consultant or a bootstrapped e-commerce store running everything from home, that same $2,235 buys a court system you will never set foot in, and the financial and operational cost of keeping a corporation in a state you do not live in can quietly turn into an expensive tangle. Delaware is not a scam. It is just priced for a company you are probably not running yet.

And $2,235 is a floor, not a total. It counts Delaware's own fees only, before the home-state registration and the extra bookkeeping that maintaining a company in a state you do not live in adds, including a higher tax-prep bill for a business filing in two places. The real number runs higher, which only sharpens the point.

The wider pattern is stranger. The states the internet tells you to form in to "save money" or look legitimate, Delaware, Wyoming, Nevada, are usually the ones that cost you more, once you count a fee almost nobody mentions until the bill arrives. The table below has the real numbers for all 50 states and DC. Search your state, then read why the cheapest-looking option often is not.

Two costs decide almost everything here: the one-time formation fee and the recurring annual cost (a report fee or a franchise tax). The all-in yearly figure above assumes a typical registered agent at about $125 a year, which most owners pay unless they act as their own. Formation is a one-time hit and is listed separately, because over any real time horizon it is the annual number that matters.

Why forming out of state usually costs more, not less

The advice to "just form in Wyoming" quietly assumes your LLC exists in a vacuum. It does not. It exists wherever you actually run it.

If you live in California and form a Wyoming LLC, you have not escaped California. The moment you operate the business from your kitchen table in Los Angeles, California treats it as doing business in the state. You now have to register the Wyoming company in California as a foreign LLC, appoint an agent, and pay California's fees, on top of everything Wyoming charges. You are running one business and paying two states.

That second-state cost is the part the listicles skip, and it is not small:

Register a foreign LLC in	One-time fee	Plus
Texas	$750	Annual franchise report
New York	$250	Publication, often $600 to $1,200+
Illinois	$150	$75 annual report
Colorado	$100	~$25 periodic report
California	$70	$800 minimum franchise tax, every year

So the honest comparison is not "Wyoming's $185 versus my home state's fee." It is "Wyoming's $185 plus my home state's foreign-registration cost versus just forming at home once." For most people who run the business where they live, forming at home wins outright, and it still routes through the same formation services if you would rather not deal with the paperwork yourself. We ran this math state by state in the cheapest state to form an LLC, and the foreign-qualification trap is the thesis there too.

The exception is a business with no real physical home: a fully remote founder, a nomad, or a non-US resident. If you are not "doing business" in any particular state, there is no home state forcing a second registration, and the calculus changes. That is the situation where a deliberately chosen state actually earns its place.

Who Delaware or Wyoming is actually for

None of this means the popular states are wrong. It means they are right for a specific, smaller group than the marketing implies. Pay the premium on purpose if you are one of these:

• Raising venture capital. Investors and their lawyers expect a Delaware entity, usually a C-Corp. Fighting that expectation costs more than the franchise tax ever will. If a priced round is genuinely on your roadmap, Delaware from the start saves a later conversion. See do you actually need Delaware? for where that line really sits.
• Privacy is a real requirement, not a preference. Wyoming and New Mexico do not put members or managers on the public record. For founders with a concrete reason to keep ownership private, that protection is worth a modest premium, and New Mexico delivers it at $0 a year.
• You have no home state to anchor to. Non-US founders and location-independent owners are not forced into a second registration, so a low-cost, well-recognized state like Wyoming, or a US LLC formed through a service that handles the whole remote setup, is a clean default. This is the one group for whom "form in Wyoming" is usually correct advice.
• Multiple co-founders or complex equity. Delaware's deep case law is genuinely useful once ownership gets complicated and disputes become possible.

If none of those describe you, the premium is buying insurance against risks your business does not carry.

How we calculated this

Every state has two figures that drive the comparison, and those are what the tool tracks:

• Formation fee: the one-time cost to file the LLC's articles of organization with the state.
• Annual cost: the recurring state charge, whether it is an annual report fee, a franchise tax, or a biennial fee annualized to a yearly number.

The "all-in per year" figure adds a typical commercial registered agent at about $125, since most owners use one. Where a state has a quirk that changes the real cost, New York's publication requirement, California's $800 minimum, Texas's zero-fee-but-mandatory filing, it is noted in the tool.

These are state filing costs only. They deliberately exclude professional fees, such as an accountant handling a multi-state entity, and the cost of registering an out-of-state LLC in your home state as a foreign LLC. Both raise the real total, so treat the figures here as a clean floor for comparison rather than an all-in budget.

Figures were reviewed in July 2026, and all but a few were checked against the state's own Secretary of State or Department of Revenue, or against two agreeing current sources. A small number are marked "listed" where a figure could only be confirmed through secondary sources or is mid-change (Kansas, for instance, cut its formation fee and moved to biennial reporting in 2026). State fees change, so confirm the current rate with the state or a local advisor before you file. To see how the state choice interacts with your actual tax bill, not just filing fees, model it in the tax calculator.

FAQ

What is the cheapest state to form an LLC?

On pure filing cost, states like Montana ($35), Kentucky ($40), and several at $50 including New Mexico are the cheapest to form. But the cheapest to run matters more over time: New Mexico is the standout at $0 a year with no annual report, followed by states like Missouri and Ohio that also have no annual fee. The catch is that if you operate the business from a different state, you usually have to register there too, which erases the saving. For most owners the cheapest real option is their own home state.

Does forming an LLC in Delaware or Wyoming save money?

Usually not, if you run the business from your home state. Because you still have to register the out-of-state LLC at home as a foreign LLC, you end up paying two states instead of one. For an owner-operator, defaulting to Delaware adds roughly $2,235 over five years on top of home-state costs. Delaware and Wyoming genuinely save money or add value only in specific cases: raising venture capital, a real privacy need, or having no fixed home state at all.

Do I have to live in the state where I form my LLC?

No. You can form an LLC in any state regardless of where you live. But living elsewhere and operating the business from there generally means you must register the LLC as a foreign LLC in your home state and appoint a registered agent in both, which adds cost. Forming where you actually operate is simpler and usually cheaper unless you have a specific reason to do otherwise.

What is a registered agent and do I need one?

A registered agent is a person or company with an address in the state that accepts legal and government mail for your LLC. Every state requires one. You can act as your own agent if you have an address in the state and are available during business hours, which costs nothing, or you can hire a commercial agent for around $125 a year. Out-of-state and non-US owners almost always need to hire one.

Which state is best for a non-US resident forming a US LLC?

Non-US residents are not "doing business" in any particular US state in the way a local resident is, so they are not forced into a second-state registration. That makes a low-cost, widely recognized state a clean choice, with Wyoming and New Mexico being common picks for cost and privacy, and Delaware where a US C-Corp and future fundraising are the goal. A single-member LLC owned by a non-resident also has federal reporting to plan for, so it is worth reading the guide for non-US founders before choosing.

Is Delaware worth it for a small business?

For a typical small business with no outside investors, usually no. The advantages people cite, the Court of Chancery and Delaware's case law, come into play mainly when there are investors, co-founders, or complex equity. A single-member consulting or e-commerce LLC pays the premium without ever using what it buys. Delaware earns its cost on the venture-funding path, not on the bootstrapper path.