Where you form your LLC matters. Different states offer different benefits - from tax savings to privacy protection to business-friendly courts. Here's our ranking of the best states for LLC formation in 2026.
💡 Quick Tip
If you do business in only one state, form your LLC there. Forming in another state means registering as a "foreign LLC" in your home state anyway - double the fees and paperwork.
Quick Comparison Table
| State | Filing Fee | Annual Fee | Privacy | Taxes | Asset Protection |
|---|---|---|---|---|---|
| 🏔️Wyoming | $100 | $60 | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ |
| 🏛️Delaware | $90 | $300 | ⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ |
| 🎰Nevada | $425 | $350 | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐⭐ |
| 🌵New Mexico | $50 | $0 | ⭐⭐⭐⭐⭐ | ⭐⭐⭐ | ⭐⭐⭐ |
| 🤠Texas | $300 | $0 | ⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐ |
| 🌴Florida | $125 | $138.75 | ⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐ |
The Top 6 States Ranked
Wyoming
Best for: Online businesses, real estate investors, privacy-conscious owners
Pros
- ✓No state income tax
- ✓Best privacy (no public member disclosure)
- ✓Strongest asset protection
- ✓Lowest annual fees
✗ Cons
- ✗Remote from most business hubs
- ✗Less name recognition than Delaware
Delaware
Best for: Startups seeking funding, tech companies, businesses expecting litigation
Pros
- ✓Most business-friendly courts (Court of Chancery)
- ✓Well-established business law
- ✓Preferred by investors/VCs
- ✓No sales tax
✗ Cons
- ✗Higher annual franchise tax
- ✗Requires registered agent
- ✗Less privacy than Wyoming
Nevada
Best for: Gambling/entertainment, California business owners seeking privacy
Pros
- ✓No state income tax
- ✓Strong privacy
- ✓No franchise tax
- ✓No information sharing with IRS
✗ Cons
- ✗Highest filing fees
- ✗Commerce tax for $4M+ revenue
- ✗Less case law than Delaware
New Mexico
Best for: Budget-conscious owners, anonymous LLCs
Pros
- ✓Cheapest to form ($50)
- ✓No annual report
- ✓Strong privacy
- ✓No publication requirement
✗ Cons
- ✗State income tax (up to 5.9%)
- ✗Less business infrastructure
- ✗Less known for business
Texas
Best for: Businesses with Texas presence, oil/gas, large operations
Pros
- ✓No state income tax
- ✓No annual report fee
- ✓Large business ecosystem
- ✓Strong economy
✗ Cons
- ✗Franchise tax (0.375-0.75%)
- ✗Public member disclosure
- ✗Higher filing fee
Florida
Best for: Florida-based businesses, real estate, tourism
Pros
- ✓No state income tax
- ✓Strong homestead protection
- ✓Business-friendly culture
- ✓Large market
✗ Cons
- ✗Annual report required
- ✗Public member info
- ✗Charging order protection only for multi-member
Key Factors to Consider
1. Tax Implications
States like Wyoming, Nevada, Texas, and Florida have no state income tax, which can mean significant savings. However, remember that you'll still owe taxes in states where you actually conduct business or have employees.
2. Privacy
Wyoming and New Mexico offer the best privacy - they don't require listing LLC members publicly. Delaware, Texas, and Florida require public disclosure of members/managers.
3. Asset Protection
Wyoming has the strongest "charging order protection" which shields your LLC interest from personal creditors. This is why many real estate investors choose Wyoming.
4. Ongoing Costs
Consider both initial filing fees AND annual fees. New Mexico has no annual fee at all, while Delaware charges $300/year minimum. Over 10 years, this adds up significantly.
10-Year Cost Comparison
*Texas has franchise tax for businesses over $2.47M revenue
Our Recommendation
For most small business owners, here's our simple advice:
If you want simplicity
Form in your home state. Less paperwork, no foreign registration, familiar laws.
Start in Your State →If you want optimization
Wyoming for privacy + asset protection. Delaware if seeking investors.
Learn About Wyoming →Summary
- Wyoming - Best overall for privacy, asset protection, and low fees
- Delaware - Best for startups seeking investors or expecting lawsuits
- Nevada - Good for California owners wanting privacy, but expensive
- New Mexico - Cheapest option with no annual fees
- Texas - Good if you're already in Texas
- Florida - Good if you're already in Florida
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