Wyoming vs Delaware vs New Mexico LLC for Non-Residents

Start with the part the formation-agent pages bury: for a foreign owner, Wyoming vs Delaware vs New Mexico LLC for non-residents is mostly a cost-and-privacy decision, not a tax decision. The federal treatment is identical in all three states. A single-member LLC owned by a foreign person is a disregarded entity, its profit is taxed in the owner's hands rather than at the entity level, and whether any US tax is owed turns on effectively connected income and a US trade or business — never on which state appears on the Articles of Organization (IRS).

The same federal paperwork follows you everywhere too. Every foreign-owned disregarded LLC must file a pro forma Form 1120 with Form 5472 attached, and missing it carries a $25,000 penalty regardless of state (IRS). So the real comparison is narrow and practical: what each state costs to form and keep, how much owner privacy it offers, and what legal extras justify a premium. New Mexico is cheapest and most private. Wyoming balances low cost with strong asset protection. Delaware earns its higher fee only for companies raising venture capital.

This guide leads with the head-to-head cost table, then separates the federal rules that apply to all three from the state features that actually differ. Two persistent myths get corrected along the way, and a decision matrix closes it out by owner profile.

Key takeaway: For a non-resident, the federal tax outcome is the same in Wyoming, Delaware, and New Mexico — a disregarded single-member LLC, taxed only on effectively connected US income, with a mandatory Form 5472 carrying a $25,000 penalty. The state choice is about cost and privacy: New Mexico is cheapest and most private, Wyoming offers the best cost-to-protection balance, and Delaware is worth its premium only for companies courting investors.

What does each state's LLC actually cost?

New Mexico is the cheapest of the three by a wide margin: a one-time $50 Articles of Organization fee, with no annual report and no franchise tax for LLCs (CostCrunch). Wyoming costs $100 to form and at least $60 a year (Wyoming LLC Attorney). Delaware sits highest on recurring cost with a flat $300 annual tax (Delaware).

The recurring figure matters more than the formation fee, because you pay it every year the company exists. Wyoming's annual obligation is a license tax of the greater of $60 or 0.0002 of in-state assets, due on the first day of the LLC's anniversary month; companies with $300,000 or less of Wyoming assets pay the $60 minimum (Wyoming LLC Attorney). Most non-resident-owned LLCs hold no in-state assets, so the $60 floor is the real number.

Delaware's $300 alternative-entity tax is due on or before June 1 each year, and late payment triggers a $200 penalty plus 1.5% interest per month on the tax and penalty; Delaware LLCs file no annual report (Delaware). That fixed $300 is the clearest cost difference between Delaware and the other two.

Factor	New Mexico	Wyoming	Delaware
Formation fee	$50 one-time (CostCrunch)	$100 ($102 online) (Wyoming LLC Attorney)	Filing fee + $300 annual tax (Delaware)
Annual state cost	None — no annual report, no franchise tax (CostCrunch)	$60 minimum license tax (Wyoming LLC Attorney)	$300 flat, due June 1 (Delaware)
Annual report	None (CostCrunch)	Required annually (Wyoming LLC Attorney)	None (Delaware)
Member disclosure to state	No member or manager names (LLC Attorney)	Not published in public register	Not published in public register
Late-payment penalty	n/a (no annual filing)	License tax accrues if unpaid (Wyoming LLC Attorney)	$200 + 1.5%/month interest (Delaware)

Source: figures per the cited Delaware, Wyoming LLC Attorney, CostCrunch, and LLC Attorney pages. Outcomes are general; specific facts can change the result. Compare these states alongside other low-tax options on our comparison tool.

Is the federal tax treatment really identical in all three states?

Yes — and this is the correction that reframes the whole decision. A foreign-owned single-member LLC is a disregarded entity for US federal tax purposes, so it pays no entity-level income tax in any of the three states. The tax question passes straight through to the owner, and the test is the same nationwide: is the LLC's income effectively connected with a US trade or business (IRS)?

All US-source income connected with a foreign person's US trade or business is effectively connected income (ECI), and after allowable deductions it is taxed at the graduated rates that apply to US citizens and resident aliens, potentially reduced by treaty (IRS). The state on the formation paperwork has no bearing on that calculation. Wyoming, Delaware, and New Mexico all impose no personal income tax of their own on this kind of pass-through income for a non-resident, but the federal layer is what does the real work.

The threshold question is whether a US trade or business exists at all. To be engaged in one through personal services, a foreign person's activities must be "considerable, continuous and regular," and the IRS is explicit that merely trading stocks, securities, or commodities through a US resident broker does not create a US trade or business (IRS). That single line separates a tax-free structure from a taxable one — and it is decided by facts, not by state.

Myth 1: Is a US LLC automatically tax-free for foreigners?

No, and this is the most expensive misunderstanding non-residents make. A US LLC is tax-transparent, not tax-exempt. Whether the foreign owner owes US tax depends entirely on the ETBUS and ECI analysis: if the LLC is engaged in a US trade or business, its effectively connected income is taxed at graduated US rates (IRS). The wrapper answers nothing on its own.

The marketing shorthand — "form a US LLC and pay zero US tax" — is true only when the underlying activity stays outside the US trade-or-business definition. A non-resident selling digital services to clients worldwide, with no US presence, often falls outside it. A non-resident running an e-commerce operation with US-based fulfillment, staff, or agents who close deals can land squarely inside it. Same LLC, opposite tax outcome.

This is why choosing Wyoming over New Mexico to "save tax" is a category error. Neither state changes the federal answer. Read the full mechanics in our US LLC for non-residents guide, and treat the trade-or-business question as the live one — not the state line.

Myth 2: Does an "anonymous" LLC stay anonymous after the 2025 CTA changes?

Partly — the privacy story changed meaningfully in 2025, and it needs qualifying. Under FinCEN's March 21, 2025 interim final rule, the Corporate Transparency Act's "reporting company" definition was narrowed to entities formed abroad and registered to do business in the US; domestic US companies and US persons are now exempt from beneficial-ownership (BOI) reporting (FinCEN). A domestic Wyoming, Delaware, or New Mexico LLC no longer files BOI.

That is genuinely good news for owner privacy at the federal register level, but it does not make an LLC invisible. Banks still require beneficial-ownership disclosure under the federal Bank Secrecy Act when you open a business account, so an anonymous New Mexico LLC does not stay anonymous to its bank (Ralph Law Group). Privacy from the public record is not privacy from your financial institution.

New Mexico still leads on state-level privacy specifically. It is the only state that allows formation of an LLC without disclosing member or manager names to the Secretary of State; only the registered agent and organizer are listed (LLC Attorney). Wyoming and Delaware keep ownership off the public register too, but New Mexico's no-annual-report design means there is no recurring filing where names could surface.

The post-2025 privacy picture is a layered one, and conflating the layers is where owners get the wrong expectation. The federal BOI exemption removed one disclosure point; the Bank Secrecy Act preserved another. New Mexico optimizes the public-register layer hardest, but every operating LLC still has a bank that knows exactly who owns it.

When is Wyoming the right choice?

Wyoming is the best balance of low cost and legal protection for most non-residents running an active business. At $100 to form and a $60 minimum annual license tax, it is cheap without being bare-bones, and it pairs that with strong charging-order asset protection and the most established registered-agent ecosystem of the three (Wyoming LLC Attorney). For a foreigner who wants a credible, well-supported structure, it is the default.

The charging-order protection is the substantive differentiator. A creditor of a Wyoming LLC member is generally limited to a charging order against distributions rather than seizing the membership interest or forcing a sale — useful for holding assets behind a layer of separation. Wyoming's deep formation-agent market also means banking introductions, registered-agent service, and compliance support are easy to source, which matters more for a non-resident operating remotely.

The trade-off versus New Mexico is the annual report. Wyoming requires one every year on the LLC's anniversary month (Wyoming LLC Attorney), where New Mexico requires none. For owners who value that ecosystem and protection, the $60 and the filing are a fair price. You can review Wyoming's profile in detail on our Wyoming jurisdiction page.

When is New Mexico the right choice?

New Mexico wins on pure economics and state-level privacy, full stop. The one-time $50 fee with no annual report and no franchise tax makes it the lowest-maintenance LLC in the country, and it is the only state that lets you form without naming any member or manager to the Secretary of State (CostCrunch; LLC Attorney). For a solo digital-service provider who wants minimal cost and maximum public-register privacy, it is hard to beat.

The catch is what you give up. New Mexico's asset-protection case law is thinner than Wyoming's, and its registered-agent and banking-support ecosystem is smaller. For a low-asset, services-only business, that may not matter at all. For an owner planning to hold valuable assets behind the entity, the weaker protection record is a real consideration.

Remember the privacy qualification from above: New Mexico's no-name design protects you from the public register, not from your bank's Bank Secrecy Act obligations (Ralph Law Group). Treat New Mexico as cheapest-and-most-private on paper, with the bank as the one place anonymity ends.

When is Delaware worth the premium?

Delaware is worth its higher recurring cost almost exclusively when you plan to raise venture capital or convert to a C-corporation. The flat $300 annual tax is more than triple Wyoming's minimum, and for a self-funded service or e-commerce business that premium buys little a non-resident actually uses (Delaware). The value lives in the legal infrastructure investors expect.

The Court of Chancery is the substantive draw. Its specialized, century-deep body of business case law gives sophisticated investors predictable outcomes, which is why most US venture financings assume a Delaware entity. The clean path from a Delaware LLC to a Delaware C-corp also matters for founders who expect a priced equity round, since investors typically require the C-corp form.

For a non-resident with no investor on the horizon, none of that is relevant, and the $300 is a recurring cost without a corresponding benefit. Choose Delaware deliberately — for a fundraising plan, not for prestige. Browse alternative structures and territories on our jurisdiction directory.

What federal paperwork applies no matter which state you pick?

Every foreign-owned single-member LLC faces the same federal filing, and the penalty is identical in all three states. A foreign person wholly owning a domestic disregarded entity must file a pro forma Form 1120 with Form 5472 attached by the return's due date, including extensions; only the LLC's name and address and items B and E on page 1 of Form 1120 are required (IRS). It reports related-party transactions and creates no tax on its own.

The penalty is what makes it non-negotiable. Failing to file Form 5472 when due, or filing a substantially incomplete form, triggers a $25,000 penalty; if the failure continues more than 90 days after IRS notification, an additional $25,000 applies for each related party per 30-day period (IRS). That number does not change between Wyoming, Delaware, and New Mexico.

One procedural trap catches the unprepared: Form 5472 for a foreign-owned disregarded entity cannot be e-filed and must be mailed or faxed to a dedicated IRS address in Ogden, Utah (IRS). So the cheapest LLC to form still carries the most consequential filing in the structure. Model the after-compliance picture on our tax calculator before you decide.

Decision matrix: which state fits which owner?

The honest summary is that owner profile decides the state once you accept the tax treatment is fixed. A digital-service provider with no US footprint usually wants the lowest cost and most privacy — that is New Mexico. An active e-commerce or operating business that values asset protection and a supportive ecosystem leans Wyoming. A founder raising capital needs Delaware. A pure holding or investment vehicle can go either way, weighted toward Wyoming's charging-order protection.

Owner profile	Best fit	Why
Digital service provider (no US presence)	New Mexico	Cheapest, no annual report, strongest state-level privacy (CostCrunch; LLC Attorney)
E-commerce / active operating business	Wyoming	Low cost plus charging-order protection and deep agent ecosystem (Wyoming LLC Attorney)
Holding / investment vehicle	Wyoming	Asset-protection case law favors holding structures (Wyoming LLC Attorney)
Startup raising venture capital	Delaware	Court of Chancery, investor familiarity, clean C-corp conversion (Delaware)

Source: figures and features per the cited Delaware, Wyoming LLC Attorney, CostCrunch, and LLC Attorney pages.

Frequently asked questions

Does the state of formation change my US tax bill as a non-resident?

No. A foreign-owned single-member LLC is a disregarded entity for federal tax in all three states, and tax depends on whether its income is effectively connected with a US trade or business, taxed at graduated rates if so (IRS). Wyoming, Delaware, and New Mexico produce the same federal result.

Is the cheapest state always the best for a non-resident?

Not always. New Mexico is cheapest at $50 once with no annual report (CostCrunch), but Wyoming's $60 a year buys stronger asset-protection case law and a deeper registered-agent ecosystem (Wyoming LLC Attorney). For active or asset-holding businesses, the small extra cost can be worth it.

Did the 2025 CTA change mean my LLC is fully anonymous now?

No. FinCEN's March 21, 2025 rule exempted domestic US companies and US persons from BOI reporting (FinCEN), but banks still require beneficial-ownership disclosure under the Bank Secrecy Act when you open an account (Ralph Law Group). You gain public-register privacy, not bank privacy.

What happens if I miss the Form 5472 filing?

The penalty is $25,000 for failing to file when due or filing a substantially incomplete form, with a further $25,000 per related party per 30-day period if the failure continues more than 90 days after IRS notification (IRS). It cannot be e-filed and must be mailed or faxed to Ogden, Utah (IRS).

Do I need Delaware if I am not raising money?

Rarely. Delaware's $300 annual tax buys the Court of Chancery and a clean C-corp conversion path that venture investors expect (Delaware). Without a fundraising plan, that premium delivers little to a non-resident, and Wyoming or New Mexico usually serves the same operating purpose for less.

Bottom line for non-resident founders

The state choice is real but narrow, because the federal tax engine is fixed. In all three states the LLC is a disregarded entity, taxed only where the activity becomes a US trade or business, and saddled with the same mandatory Form 5472 and its $25,000 penalty (IRS; IRS). Pick the state on cost, privacy, protection, and fundraising fit — not on a tax saving that does not exist.

New Mexico is cheapest and most private on the public register, Wyoming offers the best cost-to-protection balance for active and asset-holding businesses, and Delaware is worth its premium only when investors are in the picture. Whatever you choose, the two facts that decide your actual tax bill are the same: whether you have a US trade or business, and your personal tax residence and treaty position. Get those right first. Compare US states against territories like Puerto Rico and the US Virgin Islands on our comparison tool, then take qualified advice before filing.

Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently and vary by jurisdiction. Consult a qualified professional before acting.