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.

<p class="text-sm opacity-80 italic"><strong>Pillar guide:</strong> for the full step-by-step flow, see our <a href="/en/form-llc">definitive guide to forming a US LLC</a>.</p>

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 LLC 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 LLC (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 banking KYC. BOI is now a scope-based FinCEN question, not a universal state comparison item. Privacy applies first to public records; banks, tax filings and regulated procedures still require a coherent file.

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:

1. no annual state maintenance (no annual report required, ever)
2. Maximum privacy (owner names never appear on public record)
3. No state income tax on foreign-source service income
4. Fast formation (1-2 business days)
5. Clean track record with Mercury, Stripe, Wise, and other fintech platforms
6. 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 LLC from all 50 states. However, they're most familiar with New Mexico, Wyoming, and Delaware LLC 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. At Exentax, the answer starts from the file: facts, documents, deadline and follow-up.
• 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

1. Are you seeking VC investment? → Delaware
2. Do you have physical US operations? → State where you operate
3. Is asset protection your top priority? → Wyoming
4. Is cost minimization your top priority? → New Mexico
5. 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, <a href="/en/blog/us-llc-for-non-residents-real-pros-and-limits">Advantages and disadvantages of a US LLC for non-residents: honest analysis</a> and <a href="/en/blog/spanish-autonomo-vs-us-llc-structure-and-reality">Self-employed in Spain vs LLC in the US: complete tax comparison</a> fill in nuances this guide only touched on.

State selection should support the tax file, banking narrative, annual maintenance and privacy profile of the LLC, not just the incorporation fee.

> <a href="/en/services">See whether my case fits</a>

State choice should be tied to the file you want to operate: privacy, annual obligations, franchise tax exposure, bank expectations, legal predictability and how easy it is to maintain the LLC cleanly year after year.