2026 Rankings
Best State to Form an LLC in 2026
Honest rankings across 50 US states + DC. We don't sell formation services — these picks come from the math, not affiliate margins.
The short answer
For most US residents: your home state. Forming an LLC out-of-state almost always costs more than forming locally, because operating in your home state requires "foreign-qualifying" the out-of-state LLC there — meaning you pay both states' fees, taxes, and registered agents.
For non-US residents and holding companies: Wyoming. It costs $62/year, members never appear on public filings (privacy 9/10), it offers the US's strongest charging-order asset protection, and banks accept Wyoming LLCs the same as Delaware ones.
For VC-backed startups: Delaware — but as a C-Corp, not an LLC. Investors require Delaware C-Corp structure.
Top 8 states by 5-year total cost
5-year cost = filing fee + 5 × (annual report + $50 registered agent + franchise tax minimum). All figures 2026.
| # | State | Filing | Annual | Franchise min | Privacy | Banking | 5-yr total |
|---|---|---|---|---|---|---|---|
| 1 | Arizona LLC | $50 | — | — | 5/10 | 7/10 | $300 |
| 2 | Missouri LLC | $50 | — | — | 6/10 | 8/10 | $300 |
| 3 | New Mexico LLC | $50 | — | — | 9/10 | 6/10 | $300 |
| 4 | Ohio LLC | $99 | — | — | 5/10 | 8/10 | $349 |
| 5 | Colorado LLC | $50 | $10 | — | 5/10 | 8/10 | $350 |
| 6 | Idaho LLC | $100 | $0 | — | 5/10 | 7/10 | $350 |
| 7 | South Carolina LLC | $110 | — | — | 6/10 | 7/10 | $360 |
| 8 | Hawaii LLC | $50 | $15 | — | 4/10 | 7/10 | $375 |
Best state for your specific situation
Forming out-of-state triggers foreign-qualification — you pay double. Stay in-state unless you have a specific reason.
Runner-up: Wyoming
$62/yr, 9/10 privacy, equal banking, no state tax. The default for non-residents for a reason.
Runner-up: New Mexico
Investors require Delaware C-Corp (not LLC). If you must use LLC first, form in Delaware and convert later.
Strongest charging-order protection. Series LLC available. Non-public ownership.
Runner-up: South Dakota
No annual report, members never disclosed, $50 filing. Wyoming is a close second.
Runner-up: Wyoming
Foreign-LLC fees and dual registered agents eat any savings. Form where you operate.
Wyoming vs Delaware vs New Mexico vs Nevada
The four states most commonly compared for non-resident and asset-protection LLC formation:
| Wyoming | Delaware | New Mexico | Nevada | |
|---|---|---|---|---|
| Filing fee | $100 | $110 | $50 | $75 |
| Annual cost | $62/yr | $300/yr | None | $350/yr |
| Franchise tax min | None | $300 | None | None |
| State income tax | 0% | 6.6% | 5.9% | 0% |
| Privacy | 9/10 | 7/10 | 9/10 | 8/10 |
| Banking | 8/10 | 10/10 | 6/10 | 8/10 |
| Series LLC | ✅ | ✅ | ❌ | ✅ |
| 5-year total | $660 | $3,360 | $300 | $2,075 |
The 5 questions that decide the right state
- Where do you operate? If you have a physical presence in any state (office, employees, regular in-person work), form there. Forming out-of-state to operate locally always costs more.
- Are you a non-US resident? If yes, form in the cheapest privacy-friendly state — Wyoming, New Mexico, or Delaware. You're not picking based on where you live (you don't live in the US); you're picking based on cost and banking access.
- Will you raise venture capital? Investors expect Delaware C-Corp. If you're not at that stage yet, form a Wyoming LLC and convert when needed.
- How much privacy matters? If members must be off public filings, your top picks are Wyoming, New Mexico, Nevada. If you're fine being public, your home state works too.
- What's your revenue trajectory? Under $50k: minimize fixed costs. Over $250k: tax efficiency (S-Corp election) and asset protection (Series LLC) matter more than $200/year filing differences.
The myths to ignore
- "Wyoming LLCs pay no tax." True only of state tax, and only if you don't operate in another state. Federal tax always applies.
- "Delaware LLCs are the most legitimate." Banks, the IRS, and Stripe treat all 50 states equally for LLCs. Delaware case law matters only for complex corporate disputes — irrelevant for 95% of small LLCs.
- "Anonymous LLCs hide you completely." State-level anonymity is real in Wyoming/NM/NV. But every LLC must file a FinCEN BOI report listing beneficial owners — non-public but accessible to law enforcement.
- "Nevada is the new Wyoming." Nevada's $350/yr fees (business license + list) make it 3-5× more expensive than Wyoming for the same privacy benefit.
Frequently asked questions
What is the best state to form an LLC overall?
For most US residents, your home state is the best choice — forming out-of-state usually costs more, not less, because of foreign-qualification requirements. For non-residents and pure holding companies, Wyoming wins on cost + privacy ($162 year-1) while Delaware wins on legal infrastructure ($410 year-1).
What is the cheapest state to form an LLC?
Kentucky has the lowest filing fee ($40) but a $175 LLET franchise minimum kicks in above $3M revenue. For pure 5-year cost, New Mexico is unbeatable: $50 filing + no annual report = $300 over 5 years (with a budget registered agent).
Why is Wyoming so popular for LLC formation?
Wyoming combines $100 filing fee, $62/year ongoing, no state income tax, strongest charging-order asset protection in the US, members never on public record (privacy 9/10), and equal banking acceptance to Delaware. For non-residents and bootstrappers, it consistently scores 1st or 2nd.
Is Delaware really worth it for a small LLC?
For most small LLCs: no. Delaware costs $300/year just in franchise tax. The Court of Chancery expertise and case law matter for venture-backed companies, M&A targets, and multi-member structures with complex agreements. For solo operators or freelancers, Wyoming or your home state are cheaper with no real downside.
Should non-US residents form LLCs in Wyoming, Delaware, or New Mexico?
Wyoming is the default recommendation: lowest $62 annual fee, strongest privacy, no state-level reporting friction. New Mexico is slightly cheaper ($50 + no annual report) and equally private but has slightly weaker banking acceptance. Delaware is overkill unless you plan to raise VC funding.
Can I form my LLC in Wyoming and operate in California?
Technically yes, but you must register the Wyoming LLC as a "foreign LLC" in California — and California will charge its $800/year minimum franchise tax regardless. You end up paying both states. The Wyoming-LLC-for-California-business strategy almost always costs more, not less.