New Mexico vs Wyoming vs Delaware: which state for your LLC

0, 60 or 300 USD per year by state: we compare New Mexico, Wyoming and Delaware on real privacy, asset protection, annual maintenance and who each one truly suits with current numbers.

New Mexico charges 0 dollars for the Annual Report, Wyoming asks 60 dollars with a 60-dollar minimum franchise tax, and Delaware demands 300 dollars of Franchise Tax every June 1: three states, three very different annual cost models.

Pillar guide: for the full step-by-step flow, see our definitive guide to opening a US LLC.

When forming a US LLC as a non-resident, one of the first decisions you'll face is which state to choose. New Mexico, Wyoming, and Delaware are the three most popular options. Here's an honest comparison with real numbers.

Why does the state matter?

Your LLC will be registered in one US state, which determines:

Formation costs and ongoing fees
Privacy protections for your personal information
Annual report requirements and fees
Asset protection laws
Perception among US banks and investors

All three states are excellent choices. The right one depends on your specific situation.

New Mexico: the hidden gem

New Mexico is the best-kept secret among US LLC formations. It offers:

Advantages:

No annual report required; no ongoing state fees
Complete privacy; member names are not in any public database
No publication requirement (unlike some states like New York)
Very low formation cost (state filing fee)
Excellent for most digital businesses and freelancers
Fastest and simplest annual maintenance

Considerations:

Less recognized by traditional VC investors
Some banks may ask additional questions (but Mercury and Relay accept NM LLCs without issues)

Best for: Freelancers, digital entrepreneurs, content creators, advisors, and anyone who wants a simple, cost-effective structure with strong privacy. This is our recommended choice for the vast majority of clients.

Wyoming: the privacy powerhouse

Wyoming has been a leader in LLC law for decades. It invented the LLC structure in 1977.

Advantages:

Some of the strongest asset protection laws in the US
Strong privacy; no public member disclosure required
Low annual fees (state-level annual report)
"Charging order" protection is very strong; creditors can only get a charging order on distributions, they cannot seize your LLC membership or force distributions
Well recognized globally
Strong case law supporting LLC protections

Considerations:

Annual report required (due on the anniversary date)
Slightly higher than New Mexico for ongoing costs

Best for: Entrepreneurs with significant assets to protect, those who want maximum asset protection, anyone facing potential litigation risks, or those with higher-value businesses.

Delaware: the corporate standard

Delaware is where most Fortune 500 companies and startups incorporate. It has the most developed corporate law in the US.

Advantages:

Preferred by US investors and venture capital firms
Well-established corporate court system (Court of Chancery) with specialist judges
Easy to convert from LLC to C-Corp when raising funding
Globally recognized and respected
Most extensive body of corporate case law

Considerations:

Flat annual franchise tax for LLCs (non-negotiable)
Less privacy than New Mexico or Wyoming
Higher overall annual costs
Overkill for most freelancers and small businesses

Best for: Startups planning to raise VC funding, businesses that will eventually convert to C-Corps, those who need the credibility of a Delaware entity for specific business reasons.

Side-by-side cost comparison

Privacy comparison

All three states require BOI Report filing and banking KYC; privacy applies to public databases, not to government agencies.

Our recommendation

For most of our clients: New Mexico or Wyoming.

If you're a freelancer, advisor, agency, or digital entrepreneur who wants to optimize taxes, access US banking, and operate professionally. New Mexico gives you everything you need at the lowest ongoing cost.

If asset protection is a priority (you have significant personal assets, face litigation risk, or want extra peace of mind). Wyoming offers the strongest protections.

Choose Delaware only if you have specific plans to raise venture capital or need the Delaware prestige for a particular reason.

What we do at Exentax

We analyze your situation during the strategic consultation and recommend the optimal state for your specific circumstances. We've helped hundreds of entrepreneurs choose correctly, and we've never had a client wish they'd chosen differently once they understand the tradeoffs.

State comparison: the complete picture

Our recommendation: New Mexico for most clients

For 90% of non-resident digital entrepreneurs, New Mexico is the optimal choice:

no annual state maintenance (no annual report required, ever)
Maximum privacy (owner names never appear on public record)
No state income tax on foreign-source service income
Fast formation (1-2 business days)
Clean track record with Mercury, Stripe, Wise, and other fintech platforms
No annual state cost (vs. Wyoming annual report and Delaware franchise tax)

Over 5 years, choosing New Mexico over Delaware saves significant state fees, and that's before considering the time saved by not filing annual reports.

Frequently asked state questions

"Can I change states later?"

Yes, through a process called "domestication" or by forming a new LLC in the target state and dissolving the old one. However, it involves new filing fees, new EIN (potentially), and updating all banking relationships. Better to choose correctly the first time.

"Does the state affect my taxes?"

For non-residents with no US-source income: no. Your federal tax obligation doesn't change by state. The state choice affects annual fees, privacy, and legal framework, not your tax bill.

"Does Mercury care which state I choose?"

Mercury accepts LLCs from all 50 states. However, they're most familiar with New Mexico, Wyoming, and Delaware LLCs from non-residents. These states have the smoothest approval process.

"What about Nevada?"

Nevada markets itself as a business-friendly state, but its advantages (no state income tax, strong privacy) are matched by Wyoming and New Mexico at lower cost. Nevada's higher annual fees make it less attractive than New Mexico or Wyoming.

"Can I form in one state and operate in another?"

Yes, this is called "foreign qualification." Your LLC can operate anywhere regardless of where it's formed. For digital businesses with no physical US presence, this is rarely relevant.

State-specific formation requirements

Five-year total cost comparison (state fees only)

These are just state costs. Add Registered Agent fees, professional filing fees, and professional service costs, and the gap grows even larger.

The state nobody talks about: Florida

Florida is a popular choice for LLC formation because of its zero state income tax and business-friendly reputation. However, for non-residents:

Annual report: mandatory annual report (failure dissolves the LLC)
Late filing penalty: state-level penalty if filed after May 1. Now is the moment to ask for help. At Exentax we open the case, file what is missing and reply to the relevant authority for you.
Privacy: LOW. officer/member names appear on public Sunbiz.org record
Formation speed: 1-3 days (standard), same day available (expedited surcharge applies)
Best for: Entrepreneurs with physical US presence or operations in Florida

For purely digital, non-resident businesses, New Mexico or Wyoming offers every advantage of Florida at a fraction of the cost with much better privacy.

Which state for which profile?

The decision tree

Are you seeking VC investment? → Delaware
Do you have physical US operations? → State where you operate
Is asset protection your top priority? → Wyoming
Is cost minimization your top priority? → New Mexico
All other cases? → New Mexico (default recommendation)

At Exentax, we recommend New Mexico for 90%+ of our clients. The combination of no annual state fees, maximum privacy, and proven compatibility with Mercury, Stripe, and other fintech platforms makes it the clear winner for digital entrepreneurs.

To keep going on this thread, Advantages and disadvantages of a US LLC for non-residents: honest analysis and Self-employed in Spain vs LLC in the US: complete tax comparison fill in nuances this guide only touched on.

Tax compliance in your country: CFC, controlled-foreign rules and income attribution

A US LLC is a fully legal, internationally recognized vehicle. But compliance does not end at incorporation: as an owner who is tax-resident elsewhere, your local tax authority still has the right to tax what the LLC earns. The key is under which regime.

By jurisdiction

Spain (LIRPF/LIS). An operative single-member disregarded LLC (real services, no significant passive income) is generally treated under income attribution (art. 87 LIRPF): the LLC's net profits are attributed to the member in the year they arise and integrated into the general IRPF base. If instead the LLC elects corporation treatment (Form 8832) and is controlled by a Spanish resident with mostly passive income, the CFC regime (art. 91 LIRPF for individuals, art. 100 LIS for companies) can apply. The choice is not optional: it depends on economic substance, not on the label.
Information returns. US bank accounts with average or year-end balance >€50,000: Form 720 (Law 5/2022 after CJEU C-788/19, 27/01/2022, penalties now under the general LGT regime). Related-party transactions and dividend repatriation: Form 232. US-custodied crypto: Form 721. Now is the moment to ask for help. At Exentax we open the case, file what is missing and reply to the relevant authority for you.
Spain–US tax treaty. The treaty (BOE 22/12/1990, Protocol in force 27/11/2019) governs double taxation on dividends, interest and royalties. An LLC without a permanent establishment in Spain does not by itself create a PE for the member, but effective management can if all activity is run from Spanish territory.
Mexico, Colombia, Argentina and other LATAM jurisdictions. Each has its own CFC regime (Mexico: Refipres; Argentina: foreign passive income; Chile: art. 41 G LIR). Common principle: profits retained inside the LLC are deemed received by the member if the entity is treated as transparent or controlled.

On the same topic

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

> Find out whether an LLC fits your case

Practical rule: an operative LLC with substance, properly declared in your country of residence, is legitimate tax planning. An LLC used to hide income, fake non-residence or shift passive income with no economic justification falls within art. 15 LGT (anti-abuse) or, worse, art. 16 LGT (simulation). The facts decide, not the paperwork.

At Exentax we structure the entity to fit the first scenario and document every step so your local return can be defended in case of review.

Legal and regulatory references

This article relies on rules currently in force. Main sources for verification:

United States. Treas. Reg. §301.7701-3 (entity classification / check-the-box); IRC §882 (tax on foreign income effectively connected with a US trade or business); IRC §871 (FDAP and withholding on non-residents); IRC §6038A and Treas. Reg. §1.6038A-2 (Form 5472 for 25% foreign-owned and foreign-owned disregarded entities); IRC §7701(b) (tax residency, substantial presence test); 31 U.S.C. §5336 (Corporate Transparency Act, BOI Report to FinCEN).
Spain. Law 35/2006 (LIRPF), arts. 8, 9 (residency), 87 (income attribution), 91 (CFC for individuals); Law 27/2014 (LIS), art. 100 (CFC for companies); Law 58/2003 (LGT), arts. 15 (anti-abuse) and 16 (simulation); Law 5/2022 (Form 720 penalty regime after CJEU C-788/19 of 27/01/2022); RD 1065/2007 (Forms 232 and 720); Order HFP/887/2023 (Form 721 crypto). Breathe: at Exentax this is routine, we bring you up to date and the next review closes in one round, no drama.
Spain–US treaty. BOE of 22/12/1990 (original DTT); Protocol in force since 27/11/2019 (passive income, limitation on benefits).
EU / OECD. Directive (EU) 2011/16, amended by DAC6 (cross-border arrangements), DAC7 (Directive (EU) 2021/514, digital platforms) and DAC8 (crypto-assets); Directive (EU) 2016/1164 (ATAD: CFC, exit tax, hybrid mismatches); OECD Common Reporting Standard (CRS).
International framework. OECD Model Convention, art. 5 (permanent establishment) and Commentaries; BEPS Action 5 (economic substance); FATF Recommendation 24 (beneficial ownership).

Applying any of these rules to your specific case depends on your tax residency, the LLC's activity and the documentation you keep. This content is informational and does not replace personalized professional advice.

Banking and tax facts worth clarifying

Fintech and CRS information evolves; here is the current state:

Notes by provider

Mercury operates with several federally chartered partner banks and FDIC coverage via sweep network: mainly Choice Financial Group and Evolve Bank & Trust, with Column N.A. still in some legacy accounts. Mercury is not itself a bank; it is a fintech platform backed by those partner banks. If Mercury closes an account, the balance is typically returned by paper check mailed to the account holder's registered address, which can be a serious operational problem for non-residents; keep a secondary account (Relay, Wise Business, etc.) as contingency.
Wise ships two clearly different products: Wise Personal and Wise Business. For an LLC you must open Wise Business, not the personal account. Important CRS nuance: a Wise Business held by a US LLC sits outside CRS because the account holder is a US entity and the US is not a CRS participant; the USD side operates via Wise US Inc. (FATCA perimeter, not CRS). In contrast, a Wise Personal opened by an individual tax-resident in Spain or another CRS jurisdiction does trigger CRS reporting via Wise Europe SA (Belgium) on that individual. Opening Wise for your LLC does not bring you into CRS through the LLC; a separate Wise Personal in your own name as a CRS-resident individual does report.
Wallester (Estonia) is a European financial entity with an EMI/issuing-bank licence. Its European IBAN accounts are within the Common Reporting Standard (CRS) and therefore trigger automatic reporting to the tax administration of the holder's country of residence.
Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.
Revolut Business: when paired with a US LLC, it operates under Revolut Technologies Inc. with Lead Bank as its US banking partner. The account delivered is a US account (routing + account number); no European IBAN is issued to a US LLC. The European IBANs (Lithuanian, Belgian) belong to Revolut Bank UAB and are issued to European clients of the group. If you are offered a European IBAN tied to your LLC, confirm exactly which legal entity holds that account and which regime it reports under.
Zero tax: no LLC structure delivers "zero tax" if you live in a country with CFC/tax transparency or income attribution rules. What you achieve is no double taxation and correct reporting at residence, not elimination.

Legal & procedural facts

FinCEN and IRS reporting requirements moved recently; the current state is:

BOI / Corporate Transparency Act: your LLC is NOT required to file (a competitive advantage). After FinCEN's March 2025 interim final rule, the BOI Report obligation was narrowed to "foreign reporting companies" (entities formed OUTSIDE the US and registered to do business in a state). A US-formed LLC owned by a non-resident does NOT file the BOI Report: one fewer filing on your calendar, less paperwork, and a cleaner structure than ever. If your LLC was formed before March 2025 and you already filed BOI, keep the acknowledgement. The regulatory status can change again: we monitor FinCEN.gov on every filing and, if the obligation comes back, we handle it at no extra cost. Current status verifiable at fincen.gov/boi.
Form 5472 + pro-forma 1120. For a Single-Member LLC owned by a non-resident, the final regulations of Treas. Reg. §1.6038A-1 (in force since 2017) treat the LLC as a corporation for 5472 purposes. Procedure: pro-forma Form 1120 (header only: name, address, EIN, tax year) with Form 5472 attached. It is filed by certified mail or fax to the IRS Service Center in Ogden, Utah, not e-filed via standard MeF. Due date: April 15; extension via Form 7004 to October 15. Penalty: $25,000 per form per year, plus $25,000 per additional 30 days of non-filing after IRS notice.
Substantive Form 1120. Only applies if the LLC has filed a check-the-box election to C-Corp (Form 8832): it then pays 21 % federal corporate tax and files a substantive 1120. A standard disregarded LLC does not file a substantive 1120 and does not pay federal corporate tax.
EIN and notice. Without an EIN you cannot file 5472 or BOI. The IRS does not warn before imposing penalties; you find out when an EIN is flagged or a later filing is rejected.

Exentax today update: state comparison at end-today

The three states remain the reasonable choice for a non-resident LLC; the today nuances:

Wyoming: USD 100 filing, USD 60 Annual Report (due the day before anniversary), no state income tax, strong privacy. Ideal for standard operations and small holdings.
Delaware: USD 110 filing, USD 300 annual Franchise Tax (due June 1), Court of Chancery with consolidated case law. Higher cost but the preferred read for VC investors and corporate buyers.
New Mexico: USD 50 filing, no Annual Report, no state income tax, maximum public privacy. Minimum annual cost (RA only, ~USD 125). Ideal for side-projects, minimalist profiles and testing.

Frequently asked questions

Which one if I sell international SaaS? Wyoming by default. Delaware only if you plan to raise VC in the U.S. within 24 months.

Does New Mexico block Mercury or Stripe? No. Mercury, Relay, Wise and Stripe accept all three. The difference is cost and reputation, not access.

Can I redomicile from one state to another? Yes, via conversion or domestication: the LLC keeps its EIN, formation date and bank accounts. Cost USD 200-600 depending on state.

How we choose the state at Exentax: use case, not trend

The state choice is not won with a fee comparison: it depends on what you want the LLC for. What we apply at Exentax every week is a real-use elimination, not registered-agent advertising.

Wyoming for standard non-resident freelancer operations with digital income: reasonable privacy, stable annual report and banking accepted at Mercury, Wise and Relay.
New Mexico when you want maximum privacy in the public registry and no annual report, accepting that some banks will be stricter on KYC.
Delaware only if you will take investment, open a multi-level holding or use Series LLC; franchise tax and costs are higher and do not pay off for a freelancer.

For the cost and plan in each state for your case, run the Exentax calculator or book thirty minutes.

Want to discuss it now? Message us on WhatsApp and we'll get back to you today.

If you want to see the full process in detail, check our services page with everything we cover.

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For state-specific details, see our Delaware LLC service page with closed costs and timelines.

We compare New Mexico, Wyoming, Delaware and Florida against your real case — no trendy-state pitch. Compare my case with an advisor.