Delaware vs Wyoming LLC: Which State is Right for Your International Business?

If you're an international entrepreneur forming a US LLC, one of your first major decisions is: Which state should I register in?

While the US has 50 states to choose from, the reality is that for most foreign-owned LLCs, the choice comes down to two powerhouse options: Delaware and Wyoming.

Both states offer significant advantages for international businesses, but they serve different needs. Choose wrong, and you could pay hundreds of dollars more per year or miss out on important benefits.

This comprehensive guide will help you make the right choice for your specific situation.

Quick Answer: Which Should You Choose?

Delaware LLC: The Credibility Champion

Delaware is the incorporation capital of America. Over 1.5 million businesses are registered here, including 66% of Fortune 500 companies.

Why Delaware is So Popular

1. Unmatched Legal Framework

Delaware has over 200 years of business law precedent. The Delaware Chancery Court specializes exclusively in business disputes, providing:

• Predictable legal outcomes
• Fast resolution of corporate disputes
• Judges who are business law experts (not juries)
• Well-established case law for complex situations

2. Investor Preference

Venture capitalists and institutional investors overwhelmingly prefer Delaware entities:

• 66% of funded startups are Delaware companies
• Standard investment documents are written for Delaware law
• Faster due diligence (investors know Delaware law intimately)
• Easier to raise follow-on rounds

3. Business Flexibility

Delaware offers maximum flexibility in corporate structure:

• Easy to create multiple share classes
• Simple conversion from LLC to C-Corp
• Ability to have directors protect themselves from liability
• Annual meetings can be held anywhere in the world

4. No State Income Tax for Non-Residents

If you don't conduct business physically in Delaware, you pay no Delaware state income tax on your LLC income.

Delaware Costs (2025)

Wyoming LLC: The Privacy & Cost Leader

Wyoming was the first state to create the LLC structure in 1977. Today, it's the gold standard for privacy-focused entrepreneurs and bootstrapped businesses.

Why Wyoming Stands Out

1. Strongest Privacy Protection

Wyoming offers the best privacy laws in America:

• No public ownership disclosure: Member names never appear in public records
• Nominee managers allowed: Can list a registered agent as manager
• No beneficial ownership database: Unlike many states
• Court order required to access member information

2. Lowest Cost Structure

Wyoming has the most affordable LLC maintenance in the US:

• Only $60 annual report fee (vs $300 in Delaware)
• No franchise tax
• No state income tax
• Low registered agent fees ($50-100/year)

3. Strong Asset Protection

Wyoming's charging order protection is among the strongest:

• Creditors can't seize LLC assets to satisfy personal debts
• Only remedy is a charging order (right to distributions)
• Single-member LLCs get same protection as multi-member

4. Business-Friendly Environment

• No corporate income tax
• No franchise tax
• No personal income tax
• Simple compliance requirements

Wyoming Costs (2025)

Side-by-Side Comparison

Making Your Decision: A Framework

Choose Delaware If Any of These Are True:

• You plan to pitch venture capitalists within 2 years
• You're building a tech startup with $10M+ revenue potential
• You want to IPO or be acquired by a public company
• You're coming from an accelerator like Y Combinator (they require Delaware)
• Your advisors or investors are asking for Delaware
• You want maximum legal predictability

Choose Wyoming If Any of These Are True:

• You're bootstrapping and every dollar counts
• Privacy is a top priority for you
• You're running e-commerce, SaaS, consulting, or agency work
• You don't plan to raise institutional funding
• You want strong asset protection
• You value simplicity and low maintenance costs

Real-World Examples

What About Other States?

Why Not California?

• $800/year minimum franchise tax even with $0 income
• Complex tax filing requirements
• High compliance costs
• Only choose if: You have physical presence/employees in California

Why Not Nevada?

• Marketed as "tax-free" but costs more than Wyoming
• Less established legal framework than Delaware
• Doesn't offer advantages over Wyoming or Delaware
• Business license fees add up

Why Not New York?

• Expensive filing and annual fees
• Publication requirement (must publish formation notice in newspapers: $1,000+)
• Complex tax structure
• Only choose if: You have substantial NY operations

Home State Registration

You only need to register in your "home state" if you have physical nexus there:

• Office or warehouse
• Employees working in the state
• Inventory stored there
• Regular in-person sales activities

As an international founder with no US physical presence, you typically only register in one state (Delaware or Wyoming).

Next Steps: How to Register

DIY Registration (Not Recommended)

You can file directly with the state, but you'll need to:

1. Navigate state filing systems (often confusing)
2. Hire a registered agent separately ($50-125/year)
3. Draft your own operating agreement
4. Apply for EIN yourself (can be difficult internationally)
5. Set up compliance reminders
6. Research banking options alone

Total DIY cost: $150-225 upfront + 15-20 hours of research and work

Professional Formation Service (Recommended)

Professional formation services handle everything:

• State filing
• Registered agent (1 year included)
• EIN application
• Operating agreement
• Banking guidance
• Compliance reminders
• Ongoing support

Time savings: 20+ hours of research and paperwork

At I Love LLC, we can handle services like that.

The Bottom Line

For most international entrepreneurs, the choice is clear:

• Delaware if you're building a venture-backable startup
• Wyoming if you're bootstrapping any other type of business

Both are excellent choices that far surpass other states. You can't go wrong with either — it just depends on your specific goals and situation.

The good news? Whichever you choose, you're making a smart decision for your international business.