For UK and EU founders expanding into the United States, forming a Limited Liability Company is often the first practical step. But unlike registering a UK limited company — where the jurisdiction is fixed — the US allows you to form an LLC in almost any state, regardless of where you actually operate. That freedom is useful, but it creates a decision most international founders are not immediately prepared for.
Four states consistently stand out for non-resident founders: Wyoming, Delaware, New Mexico, and Texas. Each has distinct advantages depending on your business model, growth ambitions, and long-term plans. This guide covers each one factually and gives you a clear framework for choosing.
Why Your Choice of State Matters
The state you form in determines your formation costs and annual fees, the level of privacy around your ownership information, your state-level tax obligations, your ongoing compliance requirements, and the legal framework governing disputes and company structure. For UK and EU entrepreneurs operating remotely from abroad, choosing the right state can mean the difference between a genuinely low-maintenance US company and one that generates unexpected administrative cost and complexity year after year.
Delaware — The Gold Standard for Startups and Investment
Delaware is the most recognised US incorporation state in the world, and for good reason. It is home to more than a million registered businesses including a majority of Fortune 500 companies, and its legal infrastructure has been built and refined over decades specifically to support commercial activity at scale.
Delaware's Court of Chancery is a specialised business court with no jury — just experienced judges who handle corporate and commercial disputes exclusively. This produces predictable, well-precedented rulings that investors, lawyers, and institutional partners trust and rely on. US venture capital firms and angel investors almost universally prefer Delaware entities; many term sheets are drafted around Delaware corporate law assumptions. If you are building a startup with plans to raise external funding, Delaware is not a stylistic preference — it is a practical necessity for most fundraising paths.
The drawbacks for smaller businesses are real. Delaware LLCs pay a flat $300 annual tax regardless of revenue. The compliance and legal ecosystem is oriented around institutional business rather than lean remote operations. And if you are not raising capital, Delaware's advantages largely disappear while the cost premium remains. For the majority of UK and EU founders running online businesses without immediate VC plans, Delaware is more than is needed.
Best for: founders building venture-backed startups, companies planning to raise institutional investment, businesses targeting US investors, or founders whose US legal advisers specifically recommend it.
Wyoming — The All-Round Favourite for Non-Residents
Wyoming has become the most popular formation state for non-resident founders, and the reasons are consistent and practical. Wyoming was the first US state to introduce the LLC structure — back in 1977 — and it has refined its LLC laws specifically to keep them attractive to founders of all kinds, including those operating entirely from abroad.
The cost advantage over Delaware is significant. Wyoming's initial filing fee is $100 and the annual report fee is a minimum of $60 for most remote-operated LLCs — compared to Delaware's $300 flat annual tax. Over five years, that is a difference of $300 versus $1,500 in state fees alone, before accounting for any additional compliance work Delaware may generate.
Wyoming imposes no personal state income tax and no corporate income tax on pass-through LLCs. In most cases, public state filings do not require owner or member names to be disclosed — one of the strongest privacy protections of any US state. Annual compliance obligations are minimal: maintain a registered agent, file a short annual report, pay the fee. There are no mandatory board meetings, no publication requirements, and no complex governance filings.
The one meaningful limitation is that Wyoming is not Delaware. If you raise a funding round from US VCs in the future, you may need to redomicile the company to Delaware — a process that adds cost and complexity but is not impossible. For founders without near-term fundraising plans, this is a theoretical future cost, not a current practical concern.
Best for: UK and EU founders running online businesses, e-commerce operations, SaaS products, consulting firms, digital agencies, and any remote-first business without immediate plans for institutional fundraising. For a full breakdown, see our Wyoming guide.
New Mexico — The Lowest-Maintenance Option
New Mexico is rarely the first state founders hear about, but it occupies a distinctive position: it is the only US state with no annual report requirement for LLCs. Most states require annual or biennial reports accompanied by a fee — New Mexico does not. This makes it the lowest-maintenance formation state in the country from a compliance standpoint, and it has attracted founders who want to minimise the administrative footprint of their US entity.
Formation costs in New Mexico are also low, and ownership details are not publicly disclosed in state filings — privacy protections are comparable to Wyoming's. There is no state income tax on LLC income. The total cost of maintaining a New Mexico LLC over multiple years is lower than Wyoming because of the absent annual report fee, though Wyoming's fees are already modest.
The limitations are worth being clear about. New Mexico is less recognised than Wyoming or Delaware, and the professional service ecosystem around LLC formation is smaller. It is not a suitable base for a business planning to scale significantly or raise investment. It is also less commonly recommended by US CPAs and legal advisers, which can occasionally create friction with banking or professional service relationships that expect more familiar state formations.
Best for: solo founders and freelancers, passive income businesses, founders who want the absolute minimum ongoing administrative obligation, and lean remote-first businesses where the priority is simplicity over recognition.
Texas — Best for Physical US Presence
Texas is a fundamentally different option from the other three states on this list. It is not primarily a formation-of-convenience state — it is a genuine business hub with a large and growing economy, a massive workforce, no personal state income tax, and strong infrastructure. It becomes relevant when a founder's relationship with the US involves physical operations rather than purely remote ownership.
If you plan to open a US office, hire employees in the US, or operate physically within Texas, forming there avoids the need to register as a "foreign LLC" in Texas on top of a formation in another state — saving both cost and administrative duplication. Texas also does not have a personal state income tax, which matters for founders who relocate there personally.
For purely remote UK and EU founders with no US physical operations, Texas offers few advantages over Wyoming or New Mexico and comes with higher compliance requirements — including a franchise tax that kicks in above certain revenue thresholds. It is not a cost-effective formation-of-convenience state.
Best for: businesses planning US physical operations, founders relocating to Texas personally, companies hiring US employees, or businesses that will be operating substantially within the Texas market.
The Foreign LLC Registration Point
One important consideration that many UK and EU founders overlook: if your LLC is formed in Wyoming but you are physically operating in another US state — opening an office, hiring employees, or running a retail location — you may be required to register as a "foreign LLC" in that state and comply with its rules and fees in addition to Wyoming's. For fully remote businesses with no US physical presence, this does not apply. For businesses with any US operational footprint, the state where you actually operate matters as much as the state where you formed.
Head-to-Head: Which State Wins?
- Formation fee: New Mexico (lowest) > Wyoming ($100) > Delaware/Texas (higher)
- Annual ongoing cost: New Mexico (no annual report) > Wyoming ($60 minimum) > Delaware ($300) > Texas (franchise tax above threshold)
- Privacy: Wyoming and New Mexico (strong, no public owner disclosure) > Delaware and Texas (more disclosed)
- Investor recognition: Delaware (dominant) > Wyoming (acceptable) > New Mexico and Texas (less relevant for fundraising)
- Compliance simplicity: New Mexico (no annual report) ≈ Wyoming (short annual report) > Delaware > Texas
- Best for physical US operations: Texas > all others
The Decision Framework
Choose Wyoming if you want the best balance of low cost, strong privacy, minimal compliance, and broad credibility for an online or remote business. It is the right choice for the majority of UK and EU founders.
Choose Delaware if you are actively planning to raise venture capital from US investors, issue equity to co-founders or employees, or your legal advisers specifically require it. The cost premium is justified when Delaware's institutional advantages are actually needed.
Choose New Mexico if you want the absolute lowest-maintenance US entity and your business is a solo operation, passive income vehicle, or side business where you want minimal ongoing administrative obligation.
Choose Texas if you will physically operate in the US — opening offices, hiring employees, or building a presence in the Texas market.
For most UK and EU founders launching a US LLC remotely, the choice is between Wyoming and Delaware, and for those without immediate fundraising plans, Wyoming wins on every practical measure. The strategic decision is not about prestige — it is about aligning your formation state with what your business actually needs.
We help UK and European founders form Wyoming and Delaware LLCs entirely remotely, with registered agent service included and EIN applications handled by our licensed Enrolled Agent Richard Williams.
Wyoming vs Delaware — Detailed Comparison
Why Choose Wyoming — Full Guide
How to Start a US Company from the UK or Europe
Can Non-Residents Own a US Company?
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