Wyoming vs Delaware
The two owner-private LLC states, compared honestly. This is a much closer contest than the internet suggests, and most of the reasons people give for choosing between them turn out to be wrong.
Wyoming, unless something in the business actually names Delaware.
On the two things founders are usually sold on, privacy and asset protection, these states are effectively tied. Both keep members off the public record. Both make the charging order the exclusive creditor remedy, and both extend it to single-member LLCs by statute. Anyone telling you Wyoming is dramatically more private than Delaware is comparing Wyoming to Texas and putting Delaware's name on it.
What is left is real but narrow. Delaware costs $240 more every year and gives you the Court of Chancery plus a name no counterparty questions. If a contract, a lender, a platform, or a co-founder agreement makes use of that, pay it without hesitation. If nothing does, you are buying a brand.
Every line you actually pay for or file
Shaded rows are genuine ties, and there are more of them than the marketing suggests.
| Parameter | Wyoming LLC | Delaware LLC |
|---|---|---|
| Formation fee | $100Edge Articles of Organization | $110 Certificate of Formation |
| Annual state cost | $60 minimumEdge Or $0.0002 per dollar of Wyoming-situs assets, whichever is greater. The state portal adds a $2 convenience fee online, so $62 in practice | $300 flat No calculation, no share structure |
| Annual report | One form Annual Report / License Tax | NoneEdge Delaware LLCs pay the tax and file nothing |
| Annual deadline | Anniversary monthEdge First day of the month you formed in | June 1 Fixed, regardless of when you formed |
| Late penalty | Administrative dissolution After roughly 60 days | $200 + 1.5% monthly Interest accrues until paid |
| Ownership on public recordTie | Absent Members and managers are not on the state record | Absent Members and managers are not on the Certificate of Formation |
| Charging orderTie | Sole and exclusive remedy Single-member included (Wyo. Stat. section 17-29-503) | Exclusive remedy Single-member included (6 Del. C. section 18-703) |
| State income taxTie | None | None On income earned outside Delaware |
| Courts | General jurisdiction Business disputes go to the ordinary courts | Court of ChanceryEdge A dedicated business court, no juries, centuries of precedent on LLC and fiduciary disputes |
| Counterparty recognition | Universal with fintech Occasionally queried by traditional US institutions and enterprise procurement | UniversalEdge No US counterparty asks why you chose Delaware |
| Registering into this state later | $150Edge Foreign LLC registration | $200 to qualify And a foreign LLC in Delaware then owes $400 a year, higher than the $300 a domestic one pays |
| EIN processTie | Identical. Fax Form SS-4 with "FOREIGN" in Box 7b to +1 855-641-6935. Budget 3 to 6 weeks. | |
| Federal filingTie | Form 5472 + pro-forma 1120 for a single-member LLC, or Form 1065. A $25,000 automatic penalty either way. | |
| FinCEN BOITie | Currently exempt. Both are entities created under the laws of a US state. | |
| BankingTie | Mercury, Relay and Wise treat both identically. Neither state helps or hurts approval. | |
| RBI / ODI treatmentTie | Identical. Schedule III, Form FC, UIN, and an APR due 31 December. The state of formation is invisible to the AD bank. | |
Four things you were probably told
Every one of these is a real claim from real formation-service marketing. None of them survives contact with the statutes.
What the $240 actually buys
Ten years of holding the entity, state fees only. Registered agent, EIN, and federal filings are identical in both and excluded.
Where Delaware genuinely earns it
Two real advantages, stated without inflation.
Chancery is what you are paying for
A dedicated business court, judges rather than juries, and a body of precedent on operating agreements and fiduciary duties deeper than any other state's. This matters when there is more than one member and the operating agreement might one day be argued over. For a single-member LLC with no partners, it is insurance against a dispute that cannot occur.
Nobody asks a second question
Enterprise procurement teams, traditional banks, and larger US counterparties process a Delaware entity without friction. Wyoming clears fintech banking easily but occasionally prompts a question from an institution that has not seen many. If you sell into large US organisations, the smoother path can be worth $240 a year.
“But what if I raise money later?”
The answer is the same on the US side either way, and it carries an India-side cost worth pricing in.
Starting in Wyoming costs you nothing on the US side
When a priced round actually appears, the move is to a Delaware C-Corp, and getting there from a Wyoming LLC is no harder than getting there from a Delaware LLC. Both are conversions handled by counsel at the time, priced against the round, and paid for out of it. Forming a Delaware LLC today does not shorten that path, because it is the wrong entity type for investors either way.
The conversion is a new ODI, not an amendment
On the India side you are not editing a filing. You are acquiring equity in a different foreign entity, which means a fresh Form FC and a new UIN through your AD bank, correct reporting of the disposal of the original holding, and a clean APR history for the entity you are leaving.
Founders who never filed the original ODI properly discover it here, mid-round, with an investor's counsel doing diligence. That is the argument for doing the RBI paperwork correctly on day one, whichever state you pick.
Identical in both states
These are federal obligations. Neither state changes them.
No state advantage. Same process, same wait.
Without an SSN or ITIN you cannot apply online. Fax Form SS-4 to the IRS international unit at +1 855-641-6935, writing “FOREIGN” in Box 7b. Budget 3-6 weeks. You need the approved formation document first, so the state you pick affects when you can start, not how long the EIN takes.
Form 5472 + pro-forma 1120, and an automatic $25,000 penalty
A foreign-owned single-member LLC is a disregarded entity that must still file Form 5472 attached to a pro-forma Form 1120, every year, even with zero revenue. The minimum penalty for failure is $25,000 per year and it is automatic, not discretionary. Multi-member LLCs file Form 1065 with K-1s, plus withholding schedules where there is effectively connected income.
Exempt today, and only today
In March 2025 FinCEN issued an interim final rule removing beneficial ownership reporting for all entities created under the laws of a US state. Your Wyoming or Delaware LLC is exempt today.
The Corporate Transparency Act itself was not repealed; the agency narrowed its own scope by rulemaking, and rulemaking can be revisited. Treat this as monitored, not closed.
Three real obligations, two governments, three deadlines
Formation is the easy part. This is the part that compounds.
Pipe and permission
Identical in both states, and invisible to your state choice. Formation platforms file the US paperwork and stop here.
LRS and ODI are not alternative routes. They stack.
A 100%-owned US LLC is unambiguously Overseas Direct Investment, meaning equity in an unlisted foreign entity rather than portfolio investment. For a resident individual it falls under Schedule III of the Foreign Exchange Management (Overseas Investment) Rules, 2022. There is no separate, larger ODI allowance: the money still moves under LRS and still counts against the same annual cap.
Two conditions that stop the structure before it starts
- No financial services. A resident individual cannot make ODI into a foreign entity engaged in financial services. Fintech, lending, and insurance products need counsel before anything is filed.
- No controlled step-down subsidiaries. A resident individual cannot make ODI into a foreign entity that has a subsidiary or step-down subsidiary in which the individual holds control. This bites the moment a founder wants the LLC to own a second entity.
Which one, for whom
Read down to the line that describes your situation.
One asymmetry worth knowing before you pick
Registering into Delaware later is more expensive than it looks
A Wyoming LLC that later needs to register in Delaware pays $200 to qualify, and a foreign LLC registered in Delaware then owes $400 a year, higher than the $300 a domestic Delaware LLC pays. Going the other way, registering into Wyoming costs $150.
Neither is a large sum, and neither should drive the decision. It is worth knowing so you can answer the question when someone asks it.
Physical presence creates nexus wherever you formed
Employees, an office, or inventory sitting in a third-party warehouse means you must register in that state as a foreign LLC and meet its filings, on top of whatever you maintain in Wyoming or Delaware. California and New York are the usual surprises. California alone carries an $800 minimum annual franchise tax once you have nexus there.
Neither state is favoured or penalised
Mercury, Relay, and Wise treat both identically. What decides approval is the paperwork.
- Approved Articles of Organization or Certificate of Formation
- EIN confirmation letter, CP 575 or 147C
- Passport and proof of home address
- Do not list your registered agent address as the operating address. Mercury flags it. Your home address is the principal place of business, and stating it truthfully is what gets the account opened.
Wyoming vs Delaware, answered
Is Wyoming or Delaware better for a non-resident LLC?
Wyoming, unless something in the business actually names Delaware. On privacy and asset protection the two states are effectively tied: both keep members off the public record, and both make the charging order the exclusive creditor remedy including for single-member LLCs. Delaware costs $240 more a year and gives you the Court of Chancery plus a name no counterparty questions. If a contract, lender, platform, or co-founder agreement uses that, pay it.
Is a Delaware LLC less private than a Wyoming LLC?
No. Neither state lists members or managers on the formation document or the public record. Delaware's Certificate of Formation names only the registered agent, exactly as Wyoming's Articles of Organization do. The claim that Delaware exposes ownership is true of Texas, whose Public Information Report is publicly searchable on the Comptroller database, and it gets misattributed to Delaware.
Does Wyoming have stronger asset protection than Delaware?
They are close to identical. Wyo. Stat. 17-29-503 and 6 Del. C. 18-703 both name the charging order as the exclusive creditor remedy and both extend it to single-member LLCs. Delaware arguably has more case law testing its version. Neither is a reason to pick one over the other.
Is the Delaware franchise tax going to cost me thousands?
Not for an LLC. A Delaware LLC pays a flat $300 a year with no calculation, no share structure, and no annual report to file. The five-figure franchise tax bills people repeat online belong to Delaware C-Corps that used the authorised-shares calculation method instead of the assumed-par-value one.
Should I form in Delaware now so investors take me seriously later?
No. Investors want a Delaware C-Corp, not a Delaware LLC, and converting to one from a Wyoming LLC is no harder than converting from a Delaware LLC. Both are handled by counsel at the time of the round and paid for out of it. Forming a Delaware LLC today buys the letterhead without shortening the path.
What does converting to a C-Corp cost on the India side?
A fresh ODI filing, not an amendment. You are acquiring equity in a different foreign entity, so it means a new Form FC and a new UIN through your AD bank, correct reporting of the disposal of the original holding, and a clean APR history for the entity you are leaving. Founders who never filed the original ODI properly discover it mid-round, with an investor's counsel doing diligence.
How much cheaper is Wyoming over ten years?
About $2,410 in state fees. Wyoming runs $700 over a decade ($100 to form plus $60 a year, or roughly $720 including the $2 online portal fee), against $3,110 for Delaware ($110 plus $300 a year). Registered agent, EIN and federal filings are identical in both and excluded from that figure.
Is Nevada a third option?
Rarely worth it now. Nevada charges roughly $425 to form, about $350 a year, plus a $200 state business licence. Wyoming offers the same no-state-income-tax and privacy profile at a fraction of the running cost.
The state changes your bill by $240 a year.
Wyoming or Delaware is the cheapest decision in the whole structure. The EIN as a non-resident, the Form 5472 exposure, the AD bank that will process an LLC remittance, and the ODI paperwork that keeps your profits repatriable are the same in both states, and that is where the money and the risk actually sit.
This page is general business information, not legal or tax advice. It is not prepared by an attorney, a CPA, or a chartered accountant. Statutory citations are given for orientation, not as legal analysis, and conversions, flips, and multi-member structures require professional advice in both jurisdictions. State fees and the RBI Overseas Investment Rules are subject to change. Cost figures cover state fees only and exclude registered agent and other services. Figures last reviewed September 2026.
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