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Not all US states are equal when it comes to forming an LLC as a non-resident. Some charge $50, others $800 per year. Some offer privacy, others publish your name online. Some are ideal for digital businesses, others for physical product sales. Here is a practical, honest comparison of the most relevant states for international founders.

The top picks: Wyoming, New Mexico, Delaware

Wyoming is the default choice for most non-resident founders. Filing costs $100, the annual report is $60/year (due in your formation anniversary month), there is no state income tax, and member names are not listed in public filings. Wyoming also offers the strongest single-member LLC charging order protection in the country, meaning your LLC assets are shielded from personal creditors. Best for: online services, consulting, e-commerce, digital products, holding companies.

New Mexico is the cheapest option. Filing costs $50 and there is no annual report at all. Your only recurring cost is your Registered Agent fee. Privacy is strong. The trade-off is slightly less name recognition among US business partners, though this rarely matters in practice. Best for: low-cost holding structures, digital businesses, founders who want minimal maintenance.

Delaware is the standard for VC-backed startups. Filing costs $90, but the annual franchise tax is $300/year (due June 1). Delaware is known for its business-friendly courts (Court of Chancery) and well-established corporate law. However, for a single-member LLC run by a non-resident with no US investors, Delaware offers no real advantage over Wyoming while costing more. Best for: companies seeking venture capital or institutional investors.

Solid alternatives

Florida works well if you plan to visit the US regularly or have customers in the state. Filing costs $125, the annual report is $138.75/year (due May 1, late fee $400). No state income tax. Manager-managed LLCs keep member names private. Miami and Fort Lauderdale have excellent international flight connections and banks experienced with foreign-owned businesses. Not ideal for physical products due to sales tax.

Colorado is a budget-friendly option at $50 to file and only $10/year for the annual report (due in your anniversary month). Offers manager anonymity. Not suitable for physical products due to sales tax and nexus rules. Denver is reasonably well-connected internationally.

Alaska is an underrated choice. No state income tax and no sales tax, making it one of the few states suitable for physical product sales without triggering tax obligations even if nexus is established. The annual report is biennial (every two years) at $100. The downside: Alaska is geographically remote, making in-person banking difficult.

States to use with caution

Nevada markets itself aggressively as a tax haven, but the combined annual fees are $350/year ($150 annual list + $200 business license). That is nearly six times what Wyoming charges for a comparable level of privacy and protection. Nevada is not the bargain it appears to be.

Georgia has a reasonable $50/year annual report and Atlanta is one of the best-connected US airports for international travelers. Banking in Atlanta is straightforward for foreign-owned LLCs. However, sales tax and nexus rules make it unsuitable for physical products. A practical choice if you plan to open a bank account in person.

Arizona requires no annual report at all, which makes it attractive for holding companies or shell entities that rarely change ownership. However, the lack of ongoing reporting can raise suspicion with banks, especially if the LLC has changed hands without documentation. Sales tax and income tax apply.

States to avoid

California charges an $800/year minimum franchise tax regardless of whether your LLC earns any income. Additional fees apply based on revenue. California also has some of the strictest nexus rules in the country. Unless you need a Silicon Valley address for branding purposes, there is no reason for a non-resident to form an LLC here.

Idaho has its own complicated tax rules for LLCs that can result in state-level taxation even for pass-through entities. Not recommended for non-residents.

Connecticut charges $80/year for the annual report (due March 31). While its old $250 biennial business entity tax was repealed in 2020, pass-through entity tax rules at 6.99% can still apply to LLC income. Not the worst choice, but offers no advantages over Wyoming or New Mexico for non-residents.

What about physical products?

If your LLC will sell physical products in the US (Amazon FBA, Shopify with US fulfillment, etc.), your state choice matters more because of sales tax nexus. Most states with sales tax will require you to collect and remit tax if you have inventory, a warehouse, or use a fulfillment service in the state. Alaska, Montana, New Hampshire, Oregon, and Delaware have no sales tax, making them worth considering for product-based businesses.

The bottom line

For most non-resident founders running a digital business, the choice is simple: Wyoming for the best all-around package, New Mexico for the lowest cost, or Delaware if you need to attract US investors. Everything else is a niche decision based on specific business needs.

All other states at a glance

Arkansas — $45 filing, $150/year franchise tax (due May 1). Suitable for services and digital products. Sales tax and income tax make it unsuitable for physical products. Limited international flight connections.

Hawaii — $50 filing, $15/year annual report. Attractive on paper, but many banks and payment processors exclude Hawaii-based LLCs due to separate licensing requirements. Geographically remote.

Illinois — $150 filing, $75/year annual report. A 1.5% property replacement tax on net income makes it suboptimal for non-residents. Chicago is well-connected internationally.

Indiana — $95 filing, $30 biennial report. Suitable for services and digital products. Strict nexus rules disqualify it for physical products. Indianapolis has limited international connections.

Iowa — $50 filing, $30 biennial report. Works for digital services and investments. Sales tax applies to physical products. Des Moines is poorly connected internationally.

Kansas — $160 filing, $50/year annual report. Suitable for services and digital products. Strict nexus rules (any inventory triggers nexus). Topeka is hard to reach from abroad but banks are surprisingly accommodating to foreign founders.

Kentucky — $40 filing, $15/year annual report. Suitable for smaller businesses. Above $3M in revenue, the state imposes a Limited Liability Entity Tax. Member names are disclosed in the annual report. The capital Frankfort is sometimes confused with Frankfurt, Germany, by German founders.

Louisiana — $100 filing, $30/year annual report. Works for digital products, services, and investments. New Orleans is poorly connected internationally despite its reputation.

Maine — $175 filing, $85/year annual report (due June 1). Works for services and digital products. Remote location, limited international connections. Banks are not accustomed to foreign-owned LLCs.

Maryland — $100 filing, $300/year annual report. Not recommended for non-residents. The state taxes distributions to out-of-state members, the annual report is expensive and must be filed by mail. Digital infrastructure is lagging.

Massachusetts — $500 filing, $500/year annual report. One of the most expensive states. Boston is well-connected internationally and banks are experienced with foreign founders, but the cost is hard to justify over Wyoming.

Michigan — $50 filing, $25/year annual report. Very strict nexus: even $1 of property or a single contractor in the state triggers nexus. Detroit has good international connections.

Minnesota — $155 filing, $0/year annual report. No annual fee is a plus, but the state has income tax and sales tax for physical products. Revenue over $500K may trigger additional tax obligations.

Mississippi — $50 filing, $0/year annual report. Low-cost option with no annual fees. Suitable for services and digital products. Limited international accessibility.

Missouri — $50 filing, no annual report required. One of the cheapest states with zero ongoing state fees. Suitable for services and digital products. Sales tax applies for physical products.

Montana — $35 filing (cheapest in the US), $20/year annual report. No sales tax, making it one of the few states suitable for physical products. Privacy is limited as member names are public.

Nebraska — $100 filing, $10 biennial report. Low ongoing costs. Suitable for services and digital products. Omaha has limited international connections.

New Hampshire — $100 filing, $100/year annual report. No sales tax and no income tax, making it suitable for physical products. However, there is a Business Enterprise Tax that can apply to certain businesses.

New Jersey — $125 filing, $50/year annual report. Suitable for services and digital products. Newark is well-connected internationally, and banks in the NYC metro area are experienced with foreign-owned LLCs. Sales tax applies for physical products.

New York — $200 filing, $9 biennial report. The low ongoing cost is offset by a publication requirement that can cost $500-$1500 (you must publish notice of formation in two newspapers). Best avoided unless you specifically need a New York address.

North Carolina — $125 filing, $200/year annual report. Expensive ongoing costs relative to what the state offers. Charlotte has decent international connections.

North Dakota — $135 filing, $50/year annual report. Low-profile state suitable for services and digital products. Bismarck is very remote internationally.

Ohio — $99 filing, no annual report required. Zero ongoing state fees. Suitable for services, digital products, and investments. Columbus and Cleveland have reasonable international connections. A solid low-maintenance choice.

Oklahoma — $100 filing, $25/year annual report. Budget-friendly ongoing costs. Suitable for services and digital products. Oklahoma City has limited international connections.

Oregon — $100 filing, $100/year annual report. No sales tax, making it one of the few states suitable for physical products. Portland is reasonably well-connected. A good choice for product-based businesses.

Pennsylvania — $125 filing, $7 decennial report (yes, only once every 10 years). Extremely low ongoing costs. Suitable for services and digital products. Philadelphia is well-connected internationally. An underrated choice for low-maintenance LLCs.

Rhode Island — $150 filing, $50/year annual report. Suitable for services and digital products. Providence has limited international connections.

South Carolina — $110 filing, no annual report required. Zero ongoing state fees. Suitable for services and digital products. Charleston has limited but growing international connections.

South Dakota — $150 filing, $50/year annual report. No state income tax. Known for trust-friendly laws. Suitable for investment LLCs and holding structures. Remote location with limited international access.

Tennessee — $300 filing, $300/year annual report. One of the most expensive states for ongoing costs. Nashville is well-connected domestically but has limited international flights. Hard to justify over Wyoming.

Texas — $300 filing, no annual report. No state income tax. The franchise tax only applies if revenue exceeds $2.47M. Suitable for services and digital products. Houston and Dallas are major international hubs. A viable choice if you want a Texas address, but the high filing fee and sales tax for physical products are downsides.

Utah — $54 filing, $15/year annual report. Very affordable. Suitable for services and digital products. Salt Lake City has growing international connections. An underrated budget option.

Vermont — $125 filing, $35/year annual report. Low ongoing costs. Suitable for services and digital products. Burlington is poorly connected internationally.

Virginia — $100 filing, $50/year annual report. Suitable for services and digital products. Richmond and the DC metro area are well-connected. Banks are accustomed to international businesses.

Washington — $200 filing, $71/year annual report. No state income tax. Suitable for services, digital products, and investments. Seattle is an excellent international hub. Sales tax applies for physical products. The B&O tax (Business & Occupation Tax) applies to gross receipts, which can be a surprise for founders unfamiliar with it.

West Virginia — $100 filing, $25/year annual report. Budget-friendly. Suitable for services and digital products. Charleston is poorly connected internationally.

Wisconsin — $130 filing, $25/year annual report. Suitable for services and digital products. Milwaukee has limited international connections. Sales tax applies for physical products.

Washington D.C. — Not a state, but you can form an LLC here. $300 biennial report. Well-connected internationally with banks experienced in foreign business. However, high costs relative to what you get.

Not sure which state is right for you? freeLLC’s state recommendation quiz helps you pick in 60 seconds. The DIY path is completely free.

For non-US residents forming a US LLC, three states dominate the conversation: Wyoming, New Mexico, and Delaware. Each has real advantages. Here is an honest comparison.

Quick comparison

Wyoming: $100 filing fee, $60/year, strong privacy, no state income tax, best asset protection.

New Mexico: $50 filing fee, $0/year (no annual report), good privacy, no state income tax. Cheapest to maintain.

Delaware: $90 filing fee, $300/year franchise tax, weaker privacy, no state income tax on out-of-state income. Standard for VC-funded startups.

Choose Wyoming if…

You want the best all-around option. Strongest asset protection, best privacy, reasonable costs. The default for online businesses, consulting, and e-commerce run by non-residents.

Choose New Mexico if…

Minimizing ongoing costs is your priority. No annual report, no franchise tax. Your only recurring cost is a Registered Agent fee. Trade-off: slightly less name recognition, though this rarely matters in practice.

Choose Delaware if…

You plan to raise venture capital (many VCs require Delaware entities) or need the Court of Chancery. For everyone else, the $300/year franchise tax and weaker privacy make it less attractive.

What about Florida, Nevada, or Texas?

Florida works if you plan to move there ($125 filing, $139/year). Nevada markets itself as tax-friendly but costs $350/year in combined fees. Texas has no income tax but a $300 filing fee. None offer clear advantages over Wyoming or New Mexico for non-residents.

Not sure which state? freeLLC’s state quiz helps you pick the right state in 60 seconds. The DIY path is completely free.

Every US LLC needs an EIN (Employer Identification Number). It is the tax ID that lets you open bank accounts, accept payments through Stripe or PayPal, and file taxes. If you are a non-US resident without a Social Security Number, you can still get one. Here is how.

What is an EIN?

An EIN is a 9-digit number assigned by the IRS to identify your business. Think of it as a Social Security Number for your LLC. You need it for banking, payment processors, hiring contractors, and filing your annual Form 5472.

Why you cannot apply online

The IRS online EIN application requires a Social Security Number or ITIN. Without either, you must apply by fax using the paper Form SS-4.

Step-by-step: applying by fax

Step 1: Download Form SS-4 from irs.gov/pub/irs-pdf/fss4.pdf.

Step 2: Fill in the form. Key fields: Line 1 (LLC name exactly as filed), Line 3 (your name), Line 4a (your address), Line 7b (leave blank), Line 8a (check “LLC”), Line 9a (check “Other”, write “formed in [state]”), Line 10 (“Started new business”), Line 11 (LLC approval date), Line 16 (12 for December).

Step 3: Sign at the bottom. Title: “Member” or “Managing Member”. Include your phone number with country code.

Step 4: Fax to 855-215-1627 (the IRS international fax line for applicants without SSN). Use FaxZero.com if you do not have a fax machine.

Step 5: Wait 4 to 6 weeks. The IRS faxes back your EIN confirmation letter (document CP 575).

Important: form your LLC first

You need the LLC approval date for Line 11. Complete your state filing, wait for approval, then fax the SS-4.

What if you do not hear back?

Fax the form again after 6 weeks. The IRS sometimes loses faxes. Keep copies of everything.

Faster option: apply by phone

Call the IRS at 267-941-1099 (Monday to Friday, 6am to 11pm Eastern). An agent processes the SS-4 over the phone and gives you the EIN immediately. Hold times can be very long. freeLLC offers EIN application services starting at $19 if you prefer not to handle it yourself.

Need help? Start your LLC with freeLLC — the DIY path includes a pre-filled SS-4 guide with your data.

After forming your LLC and getting an EIN, you need a US bank account. Without one, you cannot accept USD payments, pay US vendors, or use Stripe. Several online banks accept foreign-owned LLCs and can be opened entirely online.

Documents you need

Every bank requires: Articles of Organization, EIN Confirmation Letter (CP 575), signed Operating Agreement, passport or government ID, and proof of home address (utility bill or bank statement).

Mercury

The most popular choice for foreign-owned LLCs. Free to open, no minimum balance, supports ACH and wire transfers. Mercury has the highest approval rate for non-resident LLCs. Application is fully online: upload documents, verify identity with a selfie and passport photo, wait 1 to 3 business days.

Relay

Strong alternative if Mercury declines you. Also free, no minimum balance. Relay offers multiple sub-accounts for organizing finances (taxes, expenses, savings). Each bank evaluates independently, so a Mercury rejection does not affect Relay.

Wise Business

Best for multi-currency needs. Hold and send money in 50+ currencies with competitive exchange rates. Wise provides local receiving details in multiple countries, so clients pay you as if you have a local account. If you earn revenue in EUR, GBP, or other currencies, Wise is often the most cost-effective option.

Tips for approval

Apply to Mercury first. Make sure your LLC name matches exactly across all documents. Describe your business clearly in the application. If one bank declines, try the next one.

Traditional banks

Chase, Bank of America, and Wells Fargo generally require in-person visits to a US branch. For most international founders, online banks are the practical choice.

Need help? freeLLC’s Banking Support ($49) helps you choose the right bank, prepare documents, and troubleshoot rejections.

Wyoming is the most popular state for non-US residents forming a US LLC. Low filing fees, strong privacy protections, no state income tax, and a business-friendly legal framework make it the default choice for international founders.

Why Wyoming?

Wyoming offers a combination that no other state matches for non-resident founders. The formation fee is $100, the annual report fee is just $60, and the state does not require member names on public filings. There is no state income tax, no franchise tax, and no requirement to have US residency. Wyoming also has the strongest charging order protection in the US, meaning your LLC assets are better protected from personal creditors.

What you need before filing

To form a Wyoming LLC, you need three things: an LLC name that ends in “LLC” or “Limited Liability Company”, a Registered Agent with a physical address in Wyoming, and the $100 filing fee. You do not need a US Social Security Number, an existing US bank account, or a visa.

Step-by-step formation process

Filing your Wyoming LLC involves submitting the Articles of Organization to the Wyoming Secretary of State at wyobiz.wyo.gov. The form asks for your LLC name, the Registered Agent name and address, whether the LLC is member-managed or manager-managed, and the organizer’s name. Wyoming accepts “any lawful business purpose” as the purpose statement. Online filings are typically approved within 1 to 3 business days.

After formation: what comes next

1. Get an EIN (Tax ID Number) from the IRS. As a non-resident without an SSN, you apply by fax using Form SS-4. Processing takes 4 to 6 weeks.

2. Draft an Operating Agreement that defines how your LLC is managed. Banks will ask for it.

3. Open a US bank account at Mercury, Relay, or Wise Business. All accept foreign-owned Wyoming LLCs.

4. Stay compliant with the annual report ($60) due in your formation anniversary month.

Costs summary

First-year cost: approximately $160 ($100 filing + $60 annual report). A commercial Registered Agent costs $49 to $125 per year. freeLLC offers formation guidance for free, and optional paid services if you need hands-on help.

Wyoming vs other states

New Mexico is cheaper ($50 filing, no annual report) but has less name recognition. Delaware costs more ($90 + $300/year franchise tax) and is mainly relevant for VC-funded companies. For most non-resident founders, Wyoming is the best balance of cost, privacy, and credibility.

Ready to form your Wyoming LLC? Start free with freeLLC — the DIY path costs $0, you only pay the $100 state fee to Wyoming.

Forming a US LLC from outside the United States is straightforward — but there are a few things worth understanding before you start. Here are five that come up in almost every conversation we have with founders.

1. You don’t need to visit the US

Everything can be done remotely. The Articles of Organization are filed electronically with the state. Your EIN application goes to the IRS by fax or phone. Bank accounts can be opened online with banks like Mercury or Relay. At no point do you need to set foot in the United States.

2. The state you choose matters more than you think

Wyoming, Delaware, New Mexico, Florida — each has different filing fees, annual costs, and privacy rules. Wyoming is popular for good reason (no state income tax, strong privacy, reasonable fees), but it’s not automatically the best for everyone. New Mexico has zero annual fees. Delaware makes sense mainly for VC-backed startups. Take five minutes with our state quiz before deciding.

3. An EIN is not optional

The EIN (Employer Identification Number) is your LLC’s tax ID. Without it, you can’t open a US bank account, register with Stripe, or file taxes. Non-residents can’t apply online — it has to be done by fax (4–6 weeks) or phone (3–5 days). Plan for this timeline.

4. Your home country still taxes you

A US LLC doesn’t change your tax residency. If you live in Germany, Austria, Spain, or anywhere else, your worldwide income is still taxable there. The LLC provides liability protection and access to US banking — it’s not a tax optimization tool. Talk to a tax advisor in your country before assuming anything about your obligations.

5. Ongoing compliance is real

Once your LLC exists, you have annual obligations: state filings (Annual Reports in most states), federal filings (Form 5472 for foreign-owned single-member LLCs), and possibly more depending on your situation. Missing Form 5472 starts at a $25,000 penalty. This is not something to forget about. Our Compliance Package handles it for $149/year, or you can use our free self-service wizard.

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Ready to start? Our wizard walks you through the entire process in about five minutes. Questions? Email us at support@freellc.us.