Jurisdictions

Wyoming, Delaware or New Mexico

By the Atiko team · Last reviewed October 2026

A US company is formed under the law of one state, and a founder living abroad is free to pick any of them. With no office or staff in the country, there is no home state that settles the question automatically. Three names come up far more often than the others in this situation: Wyoming, Delaware and New Mexico.

This guide describes what each state is commonly chosen for and what the choice does and does not change. It does not tell you which one to pick. Atiko is not a law firm or an accounting firm, and the decision is yours. Where your situation raises legal or tax questions, they belong to an independent licensed professional.

What the state of formation actually governs

The state where you file determines which company law applies to the internal affairs of the entity. That covers how the company is created, what must be filed each year, what the state charges to keep it active, what information goes on the public record and which courts interpret disputes between owners. It also determines where your registered agent must be located.

These are real differences, and they are narrower than founders usually expect. The state of formation sets the yearly administrative cost and the legal framework. It has little effect on the larger questions of federal tax, banking and payment processing, which follow the same rules whichever of the three states you choose.

What stays the same in every state

Federal obligations do not vary by state. The EIN is issued by the IRS in the same way. An LLC is taxed on a pass-through basis by default wherever it is formed. A foreign-owned single-member LLC generally must file Form 5472 with a pro forma Form 1120 every year in all three states, and the penalty for not filing starts at $25,000 in each of them.

Sales tax is equally unaffected. Your obligation to collect depends on nexus in the states where your customers and inventory are located, and the state of formation does not change it. Banks and payment providers also apply their own verification to the company, its owners and its store regardless of the state on the formation document.

• The EIN process and timing
• Default federal tax treatment of the LLC
• Form 5472 and pro forma Form 1120 for foreign-owned single-member LLCs
• Sales tax nexus rules in customer states
• The registered agent requirement
• Bank and payment provider verification

Wyoming

Wyoming is commonly chosen by founders of small and medium online businesses who want an LLC with modest and predictable upkeep. The state requires an annual report, and the minimum fee is $60. Wyoming has no state corporate income tax and no personal income tax. Its LLC statute is long established, and the state has a reputation for being straightforward to deal with.

The typical profile is an owner-operated store with one or a few members and no plan to raise institutional capital. For that profile, founders tend to value the low recurring cost and the simplicity of the annual report. The annual report must still be filed on time every year. A missed report can lead the state to dissolve the company administratively, which then has to be repaired before a bank or provider will accept current documents.

Delaware

Delaware is the state most associated with American corporate law. It has a specialized business court, a large body of case law and statutes that lawyers and investors across the country know well. For C Corporations it is the usual state, and it is the standard choice for companies that intend to raise venture capital, since investors generally expect a Delaware corporation.

Delaware LLCs are also widely used. A Delaware LLC pays a flat annual tax of $400 and does not file an annual report in the way a corporation does. Founders who choose it for an LLC often cite its name recognition and its legal framework, or expect to convert to a corporation later. Compared with Wyoming, the recurring state cost is higher. Whether the legal framework justifies that difference for a given business is a judgment the founder makes.

New Mexico

New Mexico is commonly chosen by founders who want the lowest ongoing state administration. A New Mexico LLC has no annual report requirement. After formation there is no yearly filing to make with the state for the LLC itself, which removes one recurring deadline and one recurring state fee from the calendar.

The absence of an annual report does not mean the absence of obligations. The registered agent must be maintained, federal filings apply in full, and the company must keep its own records in order. New Mexico is also less widely known than Delaware as a formation state. That has no legal consequence, although a counterparty may occasionally ask more questions about it. Founders weigh that against the lighter administration.

Privacy and the public record

The three states differ in what they place on the public register, and each is often described as offering a degree of privacy for LLC owners compared with many other states. The details of what is collected and published are set by each state and can change, so Atiko confirms the current position before filing.

Public-record privacy should be understood for what it is. It concerns what a member of the public can find by searching the state’s database. It does not make the company anonymous to the authorities, banks or payment providers. Banks and providers are required to identify the people who own and control the company, and they ask for that information directly during verification. Federal reporting rules on ownership are separate again and are set by the federal government.

Forming in one state and operating in another

A company formed in one state and carrying on business in another, for example through an office, employees or a warehouse it operates there, may need to register in that second state as a foreign entity. In that case it has annual obligations in both. This rule is the reason US-resident founders are often told to form in the state where they live.

A founder abroad with no physical operations in the United States is usually in a different position, which is why the three states discussed here are so frequently considered. Whether a specific arrangement, such as stock held with a logistics provider, amounts to doing business in a state for registration purposes is a legal question that depends on that state’s law. It should be put to a licensed professional.

How founders typically frame the decision

In practice the decision usually turns on a few questions. One is whether the company will seek outside investors, which points many founders toward a Delaware corporation. Another is how much weight to give recurring state cost and filings. A third is how much the recognition of the state’s name matters to the people the company will deal with.

It also helps to know that the choice is not permanent. A company can later be converted, moved to another state or replaced by a new entity, although each of these takes time and has costs and possible tax consequences. Government fees are set by the state, are the same whoever files, and are shown separately from Atiko’s own fee. We form companies in all three states and prepare the file for the one you select.