Wyoming vs Delaware vs New Mexico LLC: Which One Should You Pick as a Non-Resident?
"Wyoming, Delaware, or New Mexico? See the real cost, privacy, and tax differences for foreign LLC owners in 60 seconds."
Three states come up every single time someone asks where to form a US LLC as a foreign owner: Wyoming, Delaware, New Mexico. I get asked to compare them constantly, usually phrased a dozen different ways — Wyoming vs Delaware, New Mexico vs Delaware, Wyoming vs New Mexico. Same question, different order. So let's settle it properly, state by state, head to head.
Short version: Wyoming wins for most foreign owners. But the "why" matters more than the conclusion, so here's the real breakdown.
Wyoming vs Delaware LLC
This is the most common matchup people ask about, mostly because Delaware has brand recognition from the startup world and Wyoming doesn't.
Cost. Wyoming: $100 to form, $60/year after that. Delaware: $110 to form, $300/year franchise tax forever. Over five years, Wyoming costs you $340 total. Delaware costs you $1,610. That's not a small gap.
Privacy. Wyoming doesn't put LLC members in public records — only your registered agent shows up. Delaware is decent but not as airtight; some filings can expose ownership depending on how the entity is structured.
The franchise tax trap. Delaware's $300 annual tax is easy to miss, especially if you're managing the LLC from abroad. Miss it and Delaware charges 1.5% monthly interest plus penalties, and they will move to administratively dissolve your LLC. I've seen a client's $900 in owed franchise tax balloon to $1,890 after a few years of penalties and interest, with Delaware threatening dissolution within 30 days of the notice.
When Delaware actually makes sense. If you're raising venture capital or building a multi-member entity that institutional investors need to be comfortable with, Delaware's corporate law is the industry standard and VCs' lawyers know it cold. For a single-member LLC owned by a foreign national just running a business, none of that matters — you're paying for legal infrastructure you'll never use.
Bottom line: Wyoming wins for privacy and cost. Delaware wins only if you specifically need institutional investor comfort.
Wyoming vs New Mexico LLC
This one's closer, but Wyoming still edges it out.
Cost. New Mexico is actually cheaper to form — $50 versus Wyoming's $100 — and New Mexico has no annual report requirement at all, versus Wyoming's $60/year. On pure dollars, New Mexico wins by a small margin.
Privacy. This is where New Mexico loses. Wyoming's privacy protections are considered among the strongest of any state. New Mexico's are weaker — public records requests can expose more than you'd want, and the lack of an annual report means less structure around how your information is maintained and protected over time.
Legal precedent. Wyoming has been writing LLC law since 1977 — they were the first state to create the LLC structure and have decades of case law and charging order protection built up. New Mexico's LLC framework is comparatively thin on precedent, which matters if you ever end up in a dispute.
No annual filing vs a $60 filing. Some people like New Mexico specifically because there's nothing to remember — no annual report, no renewal deadline. If your worry is "I'll forget and get administratively dissolved," New Mexico removes that risk entirely. But $60/year for Wyoming is a small price for meaningfully better privacy and legal standing.
Bottom line: New Mexico saves you $60/year and one annual filing. Wyoming gives you significantly better privacy and legal protection. For most foreign owners, that trade favors Wyoming — the savings are marginal, the protection gap isn't.
New Mexico vs Delaware LLC
If you're choosing between these two specifically, this isn't close.
Cost. New Mexico: $50 to form, $0/year ongoing. Delaware: $110 to form, $300/year forever. New Mexico is dramatically cheaper — over five years you're looking at $50 total versus Delaware's $1,610.
Privacy. Delaware actually beats New Mexico here. Delaware doesn't require member names on public formation documents. New Mexico's protections are weaker, and combined with no annual report requirement, there's less institutional structure protecting your information over time.
Compliance burden. New Mexico wins clearly — nothing to file annually, nothing to forget, no franchise tax lurking. Delaware requires an annual franchise tax payment that catches people off guard constantly, especially non-residents managing this from another country and time zone.
Legal infrastructure. Delaware wins if this matters to you — decades of corporate case law, judges who specialize in business disputes (the Delaware Court of Chancery), and comfort from investors and larger partners who recognize the entity type.
Bottom line: New Mexico is cheaper and lower-maintenance. Delaware has better privacy and legal infrastructure but costs 30x more over five years and carries real risk of penalty if you forget the franchise tax. For a simple foreign-owned single-member LLC with no VC ambitions, New Mexico beats Delaware on practical grounds — but neither beats Wyoming.
The Full Head-to-Head
| Feature | Wyoming | Delaware | New Mexico |
|---|---|---|---|
| Formation cost | $100 | $110 | $50 |
| Annual cost | $60 | $300 | $0 |
| Annual report required | Yes | Yes (franchise tax) | No |
| Privacy | Excellent | Good | Limited |
| State income tax | None | None | Yes |
| Franchise tax | None | $300/yr | None |
| Legal precedent | Strong (since 1977) | Strong | Limited |
| 5-year total cost | $340 | $1,610 | $50 |
How to Form Your Wyoming LLC
- Pick a unique LLC name
- Choose a Wyoming registered agent
- File Articles of Organization ($100)
- Get an EIN from the IRS — you don't need an SSN for this
- Pay the $60 annual license tax when it comes due
Most formation services (Northwest Registered Agent, LegalZoom, IncFile) handle this for $100-200 plus the state fee.
What Nobody Tells You After Formation — Regardless of State
Here's the part every formation company skips, no matter which state you pick. Once your foreign-owned LLC exists, the IRS requires you to file Form 5472 every year — even if the LLC has zero income, even if it's completely dormant. The penalty for not filing is $25,000 per year, and the statute of limitations never expires until you actually file.
This applies whether you formed in Wyoming, Delaware, or New Mexico. The state you pick affects privacy, cost, and legal protection — it does nothing to change your federal IRS obligations.
Form 5472 reports transactions between your LLC and its related parties — that includes you as the owner. Capital contributions go in Part V. Even the money you paid to form the LLC is reportable. If a transaction category totals $50,000 or less, there's a simplified reporting option.
The form can't be e-filed — it has to be mailed or faxed with a wet-ink signature. If you need more time, you can file an extension to push the deadline to October 15.
If You Picked Delaware and the Franchise Tax Is Piling Up
If you're already in Delaware and the franchise tax has gotten away from you, you have options besides letting the state dissolve your LLC. You can pay it off, or you can dissolve the entity properly and re-form in Wyoming if you want to keep operating with lower ongoing costs. Just make sure any missing Form 5472s get filed regardless of what you decide with the state.
The Bottom Line
Wyoming gives you the best combination of privacy, cost, and legal protection for most foreign LLC owners. New Mexico is the budget option if you want zero ongoing state compliance and don't mind weaker privacy. Delaware only makes sense if you specifically need the legal infrastructure that comes with venture funding or complex multi-member structures.
But picking the right state is only half the job. Staying compliant with the IRS is what actually keeps your LLC alive long-term. A simple Excel bookkeeping template to track your transactions throughout the year makes annual filing painless regardless of which state you're in.
Whether your LLC is for Amazon FBA, US rental property, a software agency, or freelancing — MyFreeTaxAmerica.com walks you through the entire Form 5472 filing step by step. Check our FAQ for the basics, or go straight to filing. Our Premium Package includes a full professional review before submission.
Resources:
- Wyoming Secretary of State — LLC Articles of Organization (PDF)
- Wyoming Secretary of State — How to Create a Wyoming Company (PDF)
- Delaware Division of Corporations — Franchise Tax
This article is for informational purposes only and should not be considered legal or tax advice. Consult qualified professionals regarding your specific situation.