Identical liability protection, identical federal tax treatment, the same banks. Delaware's premium buys one thing: the Court of Chancery. The question is whether you will ever need it.
Over 1.8 million entities are registered in a state of under a million residents. The reason is not tax (Delaware has both corporate and personal income tax) but legal infrastructure. The DGCL and the Delaware LLC Act are the most frequently updated and most heavily litigated business statutes in the world.
The Court of Chancery, founded in 1792, hears business disputes before judges rather than juries, with specialist expertise and two centuries of precedent behind almost any conceivable question. That is why every VC-backed startup, IPO candidate and major M&A transaction defaults here.
Costs: $110 to form ($90 filing plus $20 certified copy), $100 more for 24-hour expedited service, registered agent from $50 to $300 depending on provider, and a flat $400 franchise tax due 1 June with a $200 late penalty. No annual report for LLCs.
Wyoming created the modern LLC in 1977, fifteen years before Delaware adopted its equivalent in 1992. It has built a business code around low cost, simplicity and owner privacy: no corporate income tax, no personal income tax, no franchise tax, no inventory tax.
The Wyoming LLC Act makes the charging order the exclusive creditor remedy against a single-member LLC, protection that is not reliably available elsewhere. That makes it the default for asset-protection structures, real estate holding and single-owner operating companies.
Costs: $102 to form ($100 filing plus a $2 online fee), no expedited tier because standard processing is already one to three days, registered agent from $50 in the most competitive market in the country, and a $60 minimum annual report, or $0.0002 per dollar of Wyoming assets, whichever is greater.
Start in Wyoming. Convert when a term sheet makes you.
Unless you are actively raising a priced institutional round, there is no practical reason to pay Delaware's $400 over Wyoming's $60. Liability protection is equivalent, single-member charging order defence is stronger in Wyoming, privacy is better, and federal tax treatment is identical.
When you reach Series A, converting a Wyoming LLC to a Delaware C-corp is a routine $500 to 2,500 transaction every startup lawyer has done hundreds of times. Paying the premium years early buys nothing.
Most of what founders worry about is federal, not state. These four are identical either way.
The EIN, the registered agent, and the Form 5472 obligation for foreign-owned single-member LLCs are where non-residents actually get stuck.
