Wyoming LLC vs Delaware LLC: Where Should You Incorporate

Are you thinking about starting a business in the U.S. as a solopreneur, a digital nomad, an overseas founder, or even as a member of a new startup team? One of the first questions you’ll have to answer is which state you will form your LLC in.

Many states offer a more business-friendly approach, but Wyoming and Delaware are always ranked as the first two options.

While both states have their unique strengths, the right state for you will depend on your business objectives, financial strategies, and future plans.

In this guide, we will thoroughly discuss the key differences between forming LLCs in Wyoming and Delaware to assist you in deciding where to incorporate.

Why Are Wyoming and Delaware So Popular for LLCs

Let us first look at the reasons that make these two states popular with businessmen around the world.

Delaware: The Corporate Capital of America

It has taken many years for Delaware to establish itself as the preferred destination for corporates and new businesses. It hosts over 66% of Fortune 500 companies and nearly 1.9 million business entities, many of which are created solely for the legal benefits. The state offers:

• Favors complex investment structures and business-friendly rules for venture-backed startups.
• Business-friendly judges and fast legal resolution to disputes.
• A dedicated Court of Chancery for any business disputes.
• Advisable and predictable body of corporate law.

Wyoming: The Hidden Gem for Entrepreneurs

Wyoming is a state that is frequently overlooked but is a favorite for small business owners, individual entrepreneurs, and overseas business people because of low fees, complete privacy, and little regulatory burden. It was the first US state to adopt LLCs in 1977, which now offers:

• Low filing and maintenance charges.
• No state income tax.
• Fast and simple online filing.
• Strong privacy for LLC members.

💰 Cost Comparison: Formation and Maintenance Fees

One of the biggest differences between Wyoming and Delaware LLCs lies in their cost structure. For bootstrapped businesses or early-stage founders, these costs can significantly impact your bottom line.

Wyoming LLC Costs

• Formation Fee: $100 (one-time)
  
• Annual Report Fee: $60
  
• Registered Agent: ~$25 to $100/year (varies by provider)
• Franchise Tax: None

Delaware’s Disclosure Rules

• Formation Fee: $90 (one-time)
  
• Annual Franchise Tax: $300 flat
  
• Registered Agent: ~$50 to $150/year
• Annual Report Fee: None for LLCs, but tax is mandatory

Key Insight:

Wyoming stands out for offering unmatched privacy for those wanting to keep their identity and assets protected like digital entrepreneurs, crypto businesses, or anyone working in high-risk fields.

✅ Verdict: Wyoming leads in privacy and asset protection.

🔒 Asset Security and Protection of Privacy

The consideration of anonymity and asset protection drives entrepreneurs to seek states with robust privacy regulations.

Wyoming’s Privacy Advantage

• Does not require the member or manager names to be listed in filings.
• Offers charging order protection for single member LLCs, which prevents personal creditor claims on your LLC assets.
• Supports nominee services, thus simplifying the concealment of ownership identity.

Delaware’s Disclosure Rules

• Requires contact person and business address disclosure.
• While member/manager names may not be publicly available, state records may contain them more easily.
• Offers charging order protection but it is weaker for single member LLCs.

Key Insight:

For digital entrepreneurs, crypto businesses, or participants in high-risk industries, needing to safeguard identity and assets, Wyoming leads with unmatched privacy.

✅ Verdict: Leading states for privacy and asset protection is Wyoming.

⚖️ Legal System and Business-Friendly Courts

Legal matters are important for companies looking to raise capital, issue shares, or engage in complex legal contracts.

Delaware’s Court of Chancery

• A unique, separate court that deals only with business matters.
• Judges (called Chancellors) are highly experienced in corporate law.
• Decisions are fast, and legal precedents are clear and well-documented.
• The best option if you expect legal disputes or investor litigation.

Wyoming’s Legal System

• Reliable and straightforward but does not have a specialized business court.
• Court decisions may take longer and be less predictable.
• Best suited for simpler legal needs and small business operations.

Key Insight:

It’s easy to see why large established companies and investor-backed startups incorporate in Delaware, its legal ecosystem offers confidence and predictability.

✅ Verdict: Delaware wins for legal infrastructure and investor-friendliness.

🧾 Tax Benefits and State Compliance

Both states have tax benefits, but differences exist with LLC taxes and enforcement of compliance.

Wyoming Tax Profile

• No state income tax (corporate or personal)
• No franchise tax
• Low $60 annual report based on in-state assets (if any)
• Fewer bureaucratic obligations

Delaware Tax Profile

• No sales tax or personal income tax on non-residents
• Flat $300 annual franchise tax for LLCs
• No income tax if your company doesn’t operate physically in Delaware
• May be subject to more complex filings depending on your structure

Key Insight:

Both states avoid personal income tax, but Wyoming offers lower and simpler tax compliance for small business owners.

✅ Verdict: Wyoming is the clear winner on taxes for small and remote businesses.

Which Businesses Should Choose Which State?

Here’s a breakdown based on business model, goals, and structure:

✅ Bizstartz Tip: If you’re not raising capital soon and want to keep things simple and private, start with Wyoming.

🌐 International Entrepreneurs: Wyoming vs Delaware

If you live outside the U.S. and want to open a U.S. company, both states are open to you. But there are practical differences:

Wyoming for Non-Residents

• Easier to maintain with fewer reporting obligations
• Low startup and ongoing costs
• Simple EIN, bank account, and ITIN setup
• Better for passive income and eCommerce models

Delaware for Non-Residents

• Slightly more paperwork
• Preferred for startups seeking global investment or entering U.S. markets
• Higher annual tax obligations

✅ Verdict for Non-U.S. Founders: Wyoming is the easier and more affordable option.

What Bizstartz Recommends

As experts in helping founders from around the world start their U.S. companies, Bizstartz provides complete guidance based on your unique goals.

Here’s our general recommendation:

We handle everything from LLC formation, EIN, ITIN, banking setup, BOI filing, and more, 100% online.

✅ Final Thoughts: Wyoming or Delaware?

Here is the simplified analysis:

• Select Wyoming for remote management and affordability’s privacy and simplicity.
• Select Delaware for fundraising, issuing shares, or developing a venture-backed startup.

Regardless of your choice, Bizstartz will assist you at every stage while forming your U.S. LLC from any corner of the globe.

Business LLC registrations in the US are done in record time with Bizstartz.

👉 Form Your U.S. LLC with Bizstartz, 100% Online, Fast, and Reliable

📚 FAQs About Wyoming vs Delaware LLCs

1. Can I open a U.S. bank account with either type of LLC?

Yes. Both Wyoming and Delaware LLCs can be used to open U.S. bank accounts. Bizstartz provides end-to-end assistance for this.

2. Do I need a U.S. address to form an LLC?

No. Both states allow foreign residents to form LLCs without a U.S. address or Social Security Number (SSN).

3. Is Wyoming or Delaware better for Stripe and PayPal?

Both are accepted by Stripe, PayPal, and other major platforms. Your approval depends more on your documentation and website rather than the state.

4. Is it possible to transfer my LLC to a new state later on?

You can, but it requires “domestication” or starting a new LLC. It’s easier to make the right decision from the onset.

5. Are Wyoming entities compliant with FinCEN’s BOI Reporting requirements effective 2024?

Yes. Wyoming LLCs are subject to BOI reporting just like every other LLC in the US. We can take care of this filing for you.