Delaware vs Wyoming vs Texas: Which State Is Best for Foreign LLCs? (2025 Guide)

When setting up a Limited Liability Company (LLC) in the United States as a foreign entrepreneur, choosing the right state can make or break your business structure. Delaware, Wyoming, and Texas are among the top contenders for LLC formation, but each offers distinct benefits, tax rules, and legal frameworks. In this 2025 guide, we compare these three popular states from every critical angle—formation cost, privacy, taxation, maintenance, and foreigner-friendliness—to help you decide where to register your LLC.

1. Delaware LLC: The Corporate Powerhouse

Delaware has long been the corporate capital of America, home to over 60% of Fortune 500 companies. Its business-friendly court system, called the Court of Chancery, is famous for resolving disputes quickly and professionally without juries.
Pros:

Prestigious and recognized worldwide, ideal for startups seeking investors or venture capital.
Flexible operating agreements that protect owners’ rights.
No state sales tax and no income tax on out-of-state revenue.
Cons:
Higher annual fees compared to Wyoming.
Requires a registered agent in Delaware.
Less suitable for small or single-member LLCs operating internationally.
Annual Franchise Tax: Minimum $300/year.
Formation Cost: Around $90–$150.

2. Wyoming LLC: The Privacy Champion

Wyoming is often called the “Nevada of the North” for its strong privacy laws and low fees. It’s a favorite among digital entrepreneurs, e-commerce sellers, and non-residents looking for simplicity and protection.
Pros:

Excellent privacy — you can form an anonymous LLC without public disclosure of owners.
No state income tax, no business license tax, and very low annual fees.
Strong asset protection laws, preventing creditors from seizing LLC assets.
Ideal for online businesses and international founders.
Cons:
Less recognition among international investors compared to Delaware.
Not the best option for those seeking VC funding or incorporation prestige.
Annual Report Fee: $60 (or less).
Formation Cost: Around $100–$120.

3. Texas LLC: The Business-Friendly Giant

Texas combines a booming economy with affordable costs and a massive consumer market. It’s a great option if you plan to physically operate or hire within the U.S.
Pros:

No personal income tax and relatively low business costs.
Access to a huge business ecosystem and local banking.
No separate franchise tax for small LLCs under $1.23 million in annual revenue (as of 2025).
Cons:
Public disclosure of LLC members (less privacy).
More complex compliance requirements than Wyoming.
Formation Cost: $300.
Annual Franchise Tax: Based on revenue, free for small LLCs.

4. Tax Comparison (2025 Overview)

State	State Income Tax	Annual Fee	Sales Tax	Anonymous LLC	Best For
Delaware	Only for in-state revenue	$300	0%	❌	Investor-backed startups
Wyoming	0%	$60	4%	✅	Digital & e-commerce owners
Texas	No personal income tax	$0–$300	6.25%	❌	U.S.-based operations

5. Privacy and Legal Protection

If your top priority is privacy and asset protection, Wyoming wins clearly. It allows anonymous ownership, which is crucial for non-residents who want to keep their personal data off public records. Delaware offers strong legal protection but requires more paperwork. Texas, while friendly for business operations, does not allow anonymity and demands public filing of members’ names.

6. Banking and Non-Resident Setup

Foreigners can form an LLC in any U.S. state, but banking access varies. Wyoming and Delaware are both friendly to remote bank account setups through fintechs like Mercury and Relay. Texas may require a local presence for business accounts, which can complicate matters for non-residents.

7. Cost Breakdown Summary

State	Formation Cost	Annual Fee	Ease for Foreigners	Banking Access	Reputation
Delaware	$90–$150	$300	Moderate	Excellent	⭐⭐⭐⭐⭐
Wyoming	$100–$120	$60	Excellent	Excellent	⭐⭐⭐⭐
Texas	$300	Variable	Good	Medium	⭐⭐⭐

8. Verdict: The Best State for Foreign LLCs in 2025

For maximum privacy and low cost: Wyoming is the clear winner.
For prestige, funding, and international credibility: Delaware remains unbeatable.
For physical operations in the U.S.: Texas provides the best infrastructure and market access.

In conclusion, the best state depends entirely on your business goals. If you are a foreign entrepreneur running an online or e-commerce business remotely, Wyoming LLC is your smartest choice. But if you aim to raise U.S. investment or partner with large American entities, Delaware LLC will give your business the credibility it deserves.