Every state will form an LLC for someone who lives abroad, but from outside the US only three things really separate them: what the state charges every year, whether it puts owners' names on a public record, and whether a bank reviewing your application sees a state it's used to. Here's how the states compare on those three.
What matters from abroad, and what doesn't
- The yearly charge matters. You'll pay it for as long as the company exists. You file once, but the report or tax comes round every year.
- The public record matters. Some states list members or managers on the articles or the yearly report, and some list nobody. From abroad, a public list of owners costs you privacy and gains you nothing.
- Familiarity matters more than people expect. Banks and payment processors review a lot of non-resident companies, and the states they see most often raise the fewest questions.
- State income tax mostly doesn't. An LLC that doesn't operate in a state generally owes that state no income tax, whatever the rate. It matters only if you'll operate there.
- The filing fee barely matters. You pay it once, so even a $100 difference is small next to years of yearly charges.
The four states founders ask about
Wyoming is the best fit for most founders abroad forming an LLC, and it's the state we recommend. Delaware is the choice for a company that will raise money, because investors expect it, and it charges $400 a year for that. New Mexico comes closest to Wyoming: it costs less to keep and is just as private, but banks and processors know it less well, and for most founders that's worth more than $60 a year. Nevada is the one people remember from years ago. It now costs $350 a year, and its yearly list of managers or members is public.
Every other state, in brief
Cheap to keep, with owners off the record, but less familiar to banks: Alabama, Colorado, Georgia, Iowa, Michigan, Missouri, Ohio, Oklahoma, South Carolina, South Dakota, Virginia and Wisconsin.
Expensive to keep: California ($800 a year), Massachusetts ($520 a year), Rhode Island ($450 a year), Tennessee ($400 a year), Maryland ($300 a year), North Carolina ($203 a year), Kentucky ($190 a year), Arkansas ($150 a year) and the District of Columbia ($300 every two years).
Members or managers named on the public record: Alaska, Arizona, Arkansas, California, Connecticut, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Montana, New Hampshire, New Jersey, North Carolina, North Dakota, Pennsylvania, Tennessee, Texas, Utah, Vermont, Washington and West Virginia.
A newspaper notice required after forming: New York and Nebraska, and Arizona unless the statutory agent is in Maricopa or Pima County. Every state has its own page, with the figures and a straight answer on whether a founder abroad should form there.
When another state is the right choice
When the business will physically be there: staff, an office, a warehouse or property. A company that operates in a state has to register there wherever it was formed, so forming somewhere else first means paying two states every year. If the business has a home state, form it there. If it doesn't, form it in Wyoming.