Wyoming wins on cost ($60/yr vs $300/yr) and privacy; Delaware wins for startups raising venture capital. Side-by-side comparison table and decision guide.
By Omer Aydin ·
For most small businesses, online businesses, and non-resident founders, Wyoming is the better state to form an LLC in 2026 — it costs $60 per year to maintain versus Delaware's $300 franchise tax, and it offers stronger ownership privacy. Delaware is the better choice if you plan to raise venture capital, because investors expect Delaware entities and its Court of Chancery provides the deepest body of business case law in the country.
Here is the full side-by-side, followed by a decision guide for the cases where the answer is less obvious.
| Factor | Wyoming | Delaware |
|---|---|---|
| Filing fee | $100 ($102 online) | $110 |
| Annual cost | $60 annual report (minimum) | $300 franchise tax (flat) |
| State income tax | None | None on out-of-state income |
| Franchise tax | None | $300/year, due June 1 |
| Owner privacy | Strong — members not on public filings | Strong on filings, but less privacy-focused overall |
| Business courts | Standard state courts | Court of Chancery — dedicated business court |
| Investor preference | Neutral | Strongly preferred (especially as a C-Corp) |
| Series LLC | Not available | Available |
| Non-resident friendly | Yes | Yes |
| Best for | Small business, e-commerce, holding companies, privacy | Startups, VC funding, complex ownership structures |
Cost over time. The gap compounds. Over five years, a Wyoming LLC pays about $300 in state maintenance ($60 × 5); a Delaware LLC pays $1,500 ($300 × 5). Neither state taxes out-of-state income, so for a business that operates online, the maintenance fee is the entire difference.
Privacy by default. Wyoming does not put members or managers on the public record — formation filings show only the registered agent and organizer. Wyoming also markets itself on asset protection: it pioneered charging-order protection for single-member LLCs.
Simplicity. One $60 report per year, no franchise tax return, no surprises. The details are in our Wyoming LLC guide and Wyoming benefits breakdown.
Venture capital. Most institutional investors require a Delaware entity before they invest — usually a C-Corp, not an LLC. If you form a Delaware LLC now, the eventual conversion to a Delaware C-Corp is a routine statutory process inside the same state. If fundraising is certain, many founders skip the LLC and form the Delaware C-Corp directly.
Legal infrastructure. The Court of Chancery decides business disputes without juries, applying two centuries of corporate precedent. For companies likely to face shareholder disputes, complex contracts, or M&A, that predictability is worth real money.
Contractual flexibility. Delaware's LLC Act lets operating agreements customize governance and even fiduciary duties to a degree most states don't allow — useful for joint ventures, funds, and layered ownership structures. Delaware also offers the Series LLC for founders who need internally shielded asset compartments.
| Cost over 5 years | Wyoming | Delaware |
|---|---|---|
| Formation | $100 | $110 |
| State maintenance | $300 | $1,500 |
| Total state fees | $400 | $1,610 |
Registered agent and service fees are similar in both states, so the franchise tax is the structural difference. Delaware's $300/year buys you its legal system and investor familiarity — pay it if you will use them, not because Delaware sounds prestigious.
If your business has a real physical footprint — a storefront, office, or employees in, say, Texas or Florida — forming in Wyoming or Delaware usually means registering as a foreign LLC in your home state anyway, paying two states' fees and maintaining two registered agents. In that case, forming directly in your home state is often cheaper and simpler. Wyoming and Delaware shine for location-independent businesses and non-residents. Also consider Nevada's trade-offs in our three-state comparison.
Wyoming. Formation costs are similar ($100 vs. $110), but Wyoming's annual report starts at $60 while Delaware charges a flat $300 franchise tax every year. Over five years that is roughly $400 versus $1,610 in state fees.
Because investors require it. Venture funds standardize on Delaware C-Corps for predictable law (Court of Chancery), familiar documents, and easy stock mechanics. A startup that begins as a Delaware LLC can convert to a Delaware C-Corp through a routine statutory conversion when it raises.
Both states keep members off the public formation filing. Wyoming goes further as a matter of policy — no member or manager disclosure in annual reports either, plus strong charging-order protection. Note that federal beneficial-ownership reporting and bank KYC apply regardless of state.
Wyoming has no state income tax at all. Delaware does not tax LLC income earned outside Delaware. In both cases you still owe federal tax, and your home state taxes your personal income from the LLC.
Yes. Both states allow statutory domestication/conversion, so an LLC can re-domicile without dissolving and starting over. There are filing fees and some paperwork in both states, so choosing well up front is still cheaper.
If the goal is a simple, low-cost entity for an online business, Wyoming. If the goal is raising US venture capital, Delaware (typically as a C-Corp). Both states work for non-residents with no SSN — see the non-resident guide.
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