Choosing the Right State for Your Non-US LLC: Delaware Vs Wyoming

Which is the best state to set up a non-US LLC? Daleware Vs Wyoming, find out which is the right state to set up LLC.

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If you are looking to register your business in the US as a non-US resident, Delaware, and Wyoming are at the top of the choice list. While differences exist, both states are fine-tuned in terms of corporate growth opportunities.

Delaware and Wyoming provide low corporate and income taxes, marketing benefits, a pro-business legal system, minimized paperwork costs, and fine property and asset protection. As a non-US citizen, while choosing a state, the goals of the business and the owner matter most.

Let’s see whether Delaware or Wyoming is the right choice for you as a non-US resident.

Taxation In Delaware

The taxes that you need to provide for any business registered in Delaware are the ‘Franchise Tax’ (depending on the amount of authorized share) and ‘Corporate Income Tax’ (8.7% of federal taxable income in the state). There is no state or local sales tax in Delaware.

All businesses are required to have an annual business license (generally $75.00 only for one location). A gross recipient tax is imposed on the provider.

Taxation In Wyoming

The first thing that catches the eyes of the LLCs in Wyoming is the sales tax rate, which is only around 5% making it one of the lowest in the US. There is no corporate income tax or franchise tax in Wyoming.

For the businesses that plan on not moving to Wyoming, the state has Wyoming Trusts. The modern trust laws of the state allow for the movement of assets that might otherwise be in a location with income taxes, helping the business avoid excessive taxing. Wyoming doesn’t have any gross receipt tax or excise tax.

Pricing Factor

TaxesWyomingDelaware
Franchise taxNoYes
The initial filing fee rateMinimalModerate
Annual feesMinimalModerate
Corporate share taxNoNo
Personal income taxNoYes
Corporate income taxNoYes
Local taxYesNo
Stock taxNoNo

Benefits of Doing Business in Delaware

Delaware has the 10th most robust economy in the US. Also, it is among the top 10 states in terms of equality. In terms of statistics, 60% of the 500 fortune companies, and 50% of publicly traded companies in the US are incorporated here.

Incorporation Law Made Easy

Delaware is known for its favorable corporate laws and business-friendly environment. The Delaware General Corporation Law is designed to attract new businesses to the state, and the state’s highly efficient court system, specifically the Court of Chancery, is equipped to handle corporate cases with accuracy and predictability.

This specialized court system, established in 1972, is dedicated to resolving legal disputes and is known for its expertise in handling corporate cases. In shareholder disputes, the management is typically favored under Delaware law, making the state an attractive option for businesses.

Delaware is also recognized for its ability to handle high levels of mergers and acquisition activity through the use of procedures such as schemes of arrangement. This, along with its favorable corporate laws, makes Delaware a top choice for businesses looking to incorporate.

Ease of Doing Business

Delaware is known for its ease of doing business, making it an attractive destination for new businesses. The process of incorporating a business can be completed in a timely manner and for a minimal fee of $100.

In addition, the state provides unique benefits for international businesses, including permits, streamlined business transactions, conversions, and transfers. There is no need for judicial approval for business combinations with entities, whether foreign or domestic.

Investors of any nationality can take advantage of the Delaware statute, which allows for the obtainment of various post-transaction legal opinions. Companies incorporated in Delaware do not require a physical office within the state and only require a registered agent.

The ownership and management of businesses can be comprised of individuals of any nationality, and business authorities can even obtain written consent via electronic means for votes and other actions. With its ease of doing business and favorable business environment, Delaware is an ideal location for starting a business.

Resources and Legal Framework

Delaware is a business-friendly state, providing ample resources and support for entrepreneurs and established businesses. The state’s Division of Small Businesses is committed to the success of startups and online ventures.

With a wide array of government and non-government organizations, Delaware offers everything from registered agents to branding and marketing companies to law firms. These resources are easily accessible online, making them convenient for all businesses.

Whether you’re launching a new venture or looking to expand an existing one, Delaware provides the tools and services you need to succeed. Come join the thriving business community in Delaware and take advantage of its supportive environment.

Benefits of Doing Business in Wyoming

If you want a state that is open arms when it comes to new businesses and has an undeniably good tax climate for business then Wyoming is the go-to option. The business environment in Wyoming is focused on attracting as many corporations as possible with easy administrative procedures and policies.

Low-Cost Incorporation in Wyoming

Wyoming has very business-friendly corporate laws that provide for the quick growth of the companies.. These laws are specifically made to provide smooth corporate functionality, making almost all business activities restriction-free. The state has kept its filing and incorporation fees low and steady for over a decade, backed by a robust 10 billion dollar rainy day fund. This means businesses can thrive without being burdened by rising fees.

Wyoming’s legal system recognizes the fiction of a corporation’s domicile status, granting registered companies the ability to change their domicile to Wyoming later on. This makes it an attractive option for businesses looking to expand. With the allowance of nominee shareholders and no need for share certificates, Wyoming’s liberal corporate laws make it a welcoming environment for businesses of all sizes.”

Business-Friendly Environment in Wyoming

Wyoming has a long history of being a favorable state for business owners. It was the first state to introduce the Limited Liability Company (LLC) in 1977 and since then, many other states have followed suit. Wyoming is well-regarded for its strong protection of assets and trust laws that can last for centuries.

Starting a business in Wyoming is easy, as there are no minimum capital requirements. The state places a high value on the privacy of business owners, and corporations can keep their member and stockholder information confidential from public records.

Furthermore, Wyoming offers unique benefits for single-member LLCs, including the ability to protect their assets and company in the event of a lawsuit through charging order protection.

Business Growth Resources in Wyoming

Wyoming provides ample support and resources for businesses, both established and new. Entrepreneurs can access a variety of services, including licensing and permitting assistance, SBIR/STTR funding, and expert counseling.

The Wyoming Small Business Administration (SBA) offers extensive online resources and coordinates programs and services through its partner agencies, including PTAC, SBDC, SCORE, and WWBC. These agencies specialize in helping small businesses and startups with their specific needs, such as marketing and financial planning, as well as international trade.

SBDC in particular helps startups and small businesses with marketing plans, financial strategies, and international trade. WWBC helps entrepreneurs to develop their small businesses in Wyoming. These agencies have a large online network and resources for all registered corporations.

Which State Should You Choose? 

Wyoming has the strongest LLC statute in the US. This state also has lower initial and annual fees compared to Delaware. While Wyoming has the longest LLC case law history, the sophistication of the Delaware corporate law and court system is superior. The process of reporting taxes is quite simple in Delaware.

The size of the business also matters. You will be much more equipped in Wyoming if you are a small business because of the minimal fees and other corporate benefits. While larger and more structured companies can benefit highly from Delaware legal procedures, asset and property protection, and shareholder benefits.

Final Words

For non-US residents with international businesses, both Delaware and Wyoming can provide market advantages. They make it easier to access the inner market networks of the US. The financial benefits from the exclusive tax laws and legal protections are deal makers. With that being said as a non-US resident if you are looking for the lowest tax fees choose Wyoming. If you want the corporate hassles to be the least smooth, choose Delaware.

You should decide on the State, depending on the goals of your business. Base your decisions on long-term benefits, and you will know whether it’s Delaware or Wyoming that takes the cake for you.

Do you want an expert to answer your specific questions and guide you in setting up your business as a non-US citizen? Business Globalizer can help you set up your business from scratch or improve your existing one.

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