Is Delaware a good choice for non-residents?
Delaware is workable but not the typical choice for non-residents. For founders who never set foot in the US, the standard recommendations are Wyoming, New Mexico, or Delaware. Delaware compares as:
- Banking accessibility: 10/10 (top — Mercury, Brex, Wise all available).
- Privacy: 7/10 — members appear on public filings.
- State income tax: 6.6% — non-residents typically don't owe Delaware state tax unless they have Delaware-source income.
- Filing fee: $110 (one-off) plus $300 per year.
- Franchise minimum: $300/yr — paid regardless of profit.
The standard non-resident path in Delaware
- Choose a registered agent with a Delaware street address (Northwest, ZenBusiness, Bizee — $39-$125/yr). Required.
- File Articles of Organization with the Delaware Secretary of State ($110). Most states accept online filing without requiring SSN.
- Get an EIN from the IRS. Non-residents can't apply online — fax Form SS-4 to IRS Philadelphia (267-941-1040). Takes 4-6 weeks. Some services (doola, Firstbase) offer rush options for ~$100.
- Adopt an operating agreement — even single-member. Keep on file.
- File FinCEN BOI report within 90 days of formation. Online, free, federal. Penalty: $591/day if missed.
- Open a US business bank account. Best options for non-residents:
- Mercury Bank — online application, accepts most jurisdictions.
- Relay Financial — online, multi-currency.
- Wise Business — workable but not a true US bank.
- Traditional banks (Chase, BofA) — require an in-person visit, often with W-8BEN.
- Apply for Stripe / payment processors using the EIN and US bank account.
Annual US tax obligations
- If single-member (disregarded entity) with foreign owner: File Form 5472 + pro-forma Form 1120 annually. Penalty: $25,000 if missed. Most owners hire a US international-tax CPA ($800-$2,000/yr).
- If multi-member (partnership): File Form 1065 + K-1 for each member. More complex.
- US federal income tax: Generally NOT owed if you have no US trade or business and no US-source effectively connected income (ECI). Pure online services to US customers from outside the US typically don't create ECI.
- FinCEN BOI: One-off filing, then update within 30 days of any change.
What you still owe in your home country
Your home country still taxes you personally on the LLC's income. Many countries apply "controlled foreign company" (CFC) rules to single-owner foreign LLCs. Treat the US LLC as a US compliance and payment-processing vehicle — not a tax-saving structure.
Common non-resident mistakes
- Skipping the BOI report ($591/day penalty).
- Skipping Form 5472 ($25,000 penalty per year).
- Assuming Wyoming = no US tax for any non-resident. State tax: usually true. Federal tax: depends entirely on ECI.
- Using a bank that doesn't actually serve non-residents (most US banks require a US SSN and visit).
- Not filing in the home country — your domestic tax authority will eventually find out via CRS / FATCA.
Most non-resident founders pick Wyoming over Delaware when Delaware is not their target market. Wyoming offers $62/yr annual fee, 9/10 privacy, and equal banking access. Try our 5-question quiz or the Non-Resident Tax calculator for a personalized recommendation.