To start with, we want to answer why you should choose an LLC as a non-U.S. resident and grow globally.
LLCs in the United States present numerous advantages for non-U.S. residents looking to establish a business. An LLC provides personal liability protection, meaning owners are not personally liable for business debts and obligations.
This structure also offers flexibility in management and pass-through taxation, which can be beneficial for entrepreneurs seeking to minimize their tax burdens.
Additionally, an LLC can enhance credibility with customers and suppliers, making it an attractive option for international entrepreneurs.
US LLC Taxes
(Quick Point: Tax Rates Are the Same for non-US residents)
If your LLC checks a few boxes, its tax rate in the US will be a straight 0%, regardless of its state of incorporation. For clarity, US taxes typically don’t touch non-resident LLCs if they:
- Don’t employ people in the US
- Don’t have physical premises in the US, and
- Don’t stay over 90 days (sometimes more) in the US within a calendar year.
You might get caught in the US tax web if you slip up on these—and that’s not always fun. There are, however, a lot of online businesses that easily qualify for zero-tax. For each of them, an LLC in Wyoming or Delaware might be the right thing.
Best State to Form an LLC?
Wyoming vs. Delaware
When considering where to form an LLC, Wyoming and Delaware are often highlighted as top contenders, each with unique benefits.
However, you should pay attention to the corporate veil and low maintenance fees for LLCs. Both Wyoming and Delaware offer distinct advantages, particularly for non-U.S. residents looking to form a business.
Here’s a detailed comparison of their privacy protections, corporate veil considerations, and maintenance costs:
Corporate Veil
Wyoming
Strong Protection: Wyoming is known for its robust protection of the corporate veil, which separates personal assets from business liabilities. This means that owners are generally not personally liable for the debts and obligations of the LLC.
Specific Statutory Protections: Wyoming has specific laws that prevent the piercing of the corporate veil under most circumstances, including single-member LLCs. This provides an added layer of security for owners against creditors.
Charging Order Protection: In Wyoming, if a creditor seeks to collect from an LLC owner, they can only obtain a charging order, which limits their ability to seize assets directly from the LLC.
Delaware
Legal Framework: While Delaware also offers limited liability protections, it is more permissive regarding piercing the corporate veil under certain conditions, such as fraud or failing to maintain proper business formalities.
Disclosure Requirements: Delaware requires more public disclosures compared to Wyoming, which can affect privacy. For example, the names of directors and officers must be disclosed in annual reports.
Low Maintenance Fees
Wyoming
Low Formation and Maintenance Costs: Wyoming has one of the lowest initial formation fees (around $100) and minimal annual fees (approximately $50) for maintaining an LLC. This makes it financially attractive for entrepreneurs looking to minimize ongoing costs.
No State Income Tax: Additionally, there is no state income tax in Wyoming, which can significantly reduce overall tax liabilities for LLC owners.
Delaware
Higher Fees: Delaware has higher initial formation fees (starting at $90) and an annual franchise tax that can be more expensive than Wyoming’s fees. The franchise tax can start at $300 and increase based on company size.
Business-Friendly Environment: Despite higher costs, Delaware is often chosen for its well-established legal framework that supports corporate governance and dispute resolution.
Is Wyoming the Best Option?
For non-U.S. residents looking to form an LLC, Wyoming emerges as the superior choice due to its combination of low costs, favorable tax environment, and strong privacy protections.
The absence of state income tax and minimal regulatory requirements make it easier and more cost-effective for international entrepreneurs to maintain their businesses.
Wyoming’s standout features are the low operational costs paired with robust asset safeguards. Opting for Wyoming over Delaware could save you several hundred bucks annually, largely due to the absence of a franchise tax. If you’re dipping your toes into international entrepreneurship with a tight budget, we advise you to consider Wyoming LLC.
Here’s our advice: If securing funding is on your horizon, remember that starting as a Wyoming LLC and transitioning to a Delaware LLC or C-Corp later is easy and doable. This way, you can maintain low ongoing costs for your LLC in the interim.
For those in e-commerce, freelancing, service-centric domains like marketing or consultancy, or software enterprises not eyeing immediate investments, Wyoming saves you $300 annually on franchise tax. It doesn’t seem like big money, but for some entrepreneurs, it could mean a lot in the beginning.
If you are eyeing angel investment or venture capital in the very near future, consider Delaware. In all other cases, Wyoming naturally stands out.
Neubase Process
You can start your entrepreneurial journey by forming a US company from anywhere, literally.
This journey can be an exploration field for yourself, and you can DIY it or you can partner up with us.
With the Neubase process, we handle everything from start to finish. Every step is done in roughly 4 weeks, and it’s mostly a waiting queue for the US authorities to approve your company’s EIN.
You can grab your ‘1-on-1’ 15-minute free consultation with our team and get a more tailored approach for your business.
Conclusion
For non-U.S. residents seeking to establish a business in the United States, forming an LLC in Wyoming offers unparalleled benefits in terms of taxation, privacy, and overall cost-effectiveness.
If you understand the advantage of this structure and navigate the formation process effectively, you can successfully launch your ventures in one of the most business-friendly environments available today.
