Delaware has been America’s default corporate address for decades — roughly two out of three Fortune 500 companies are incorporated there, and most US venture capital firms still write “Delaware” into their term sheets before anything else. That reputation doesn’t make Delaware the right call for every non-resident founder, though. Here’s what forming and running a Delaware LLC actually involves, and where it fits next to our other state, Wyoming.
Why founders still choose Delaware
Delaware’s advantage isn’t marketing — it’s infrastructure the state has spent two centuries building:
- A dedicated business court. The Court of Chancery hears corporate disputes in front of judges, not juries, which tends to make outcomes faster and more predictable than a general civil court.
- Deep, well-tested case law. Two hundred-plus years of business rulings means most governance questions already have an answer, and attorneys everywhere are trained on Delaware law specifically.
- Investor familiarity. VCs, accelerators, and M&A counsel default to Delaware because it’s the entity they already know how to review quickly.
- No state income tax on out-of-state income. If your LLC does no business inside Delaware, you owe Delaware no income tax — only the flat annual franchise tax below.
This is the same infrastructure that makes Delaware the default choice if you ever convert an LLC to a C-Corp to raise institutional funding.
Delaware vs. Wyoming, in brief
We only form companies in Wyoming and Delaware, and the two solve different problems. The short version:
| Delaware | Wyoming | |
|---|---|---|
| State filing fee | $110 | $100 (~$102 online) |
| Ongoing annual fee | ~$300 franchise tax | ~$62 annual report |
| Member names public? | No | No |
| Best fit | Raising VC, converting to a C-Corp | Bootstrapped, cost-conscious, solo founders |
For the full breakdown — privacy, legal framework, and how we help clients pick — see our Wyoming vs. Delaware guide.
How Delaware LLC formation works
The process is entirely remote — no US visa, Social Security Number, or trip to Delaware required:
- Pick a name ending in “LLC,” “L.L.C.,” or “Limited Liability Company.” We check availability with Delaware’s Division of Corporations before filing.
- Appoint a registered agent. Delaware requires a physical in-state street address — no PO boxes — which we provide as part of formation.
- File the Certificate of Formation. Standard processing runs about 5–7 business days.
- Apply for your EIN. We prepare the IRS Form SS-4 application so you have a federal tax ID for banking and compliance.
- Sign an operating agreement that sets out ownership, management, and how the business runs day to day.
- Stay current on the annual franchise tax and your federal filings once the company is live.
Handled end to end, this typically lands around four weeks from the day you start to a fully formed company with an EIN in hand — the state filing moves fast; the EIN is usually what sets the pace.
What it costs
First year
- Delaware filing fee: $110
- Registered agent: $50–$300
- Operating agreement + EIN application: included in our company formation plans, which start at $199/year
Every year after
- Franchise tax: a flat $300, due June 1, regardless of revenue
- Registered agent: $50–$300
- Federal tax filing (Form 5472 + pro-forma 1120): $399 per filing for a single-member LLC, or $899 per filing for a C-Corp or multi-member LLC, if you use our service
Missing the June 1 franchise tax deadline adds a $200 penalty plus 1.5% monthly interest. It’s an easy date to plan around once you know it’s coming — and it’s one we track automatically for every client.
Your federal tax obligations
Forming in Delaware doesn’t change your federal filing requirements — those come from the IRS, not the state. As the non-resident owner of a single-member LLC, you’ll typically file:
- Form 5472, reporting transactions between your LLC and its foreign owner, required even at zero income.
- A pro-forma Form 1120 attached to the 5472 — a mostly blank corporate return that exists to carry it.
One piece of good news: since March 2025, domestic US LLCs are exempt from Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act — only foreign entities registered to do business in the US still need to file that separately.
If your LLC earns only foreign-sourced income and isn’t engaged in a US trade or business, you typically owe no federal income tax — just the informational filings above. Our federal tax filing service prepares and files Form 5472 and the pro-forma 1120 every year; for how the two forms fit together, see our guide to the pro-forma 1120.
A few things to watch for
- Don’t pick Delaware for privacy. Wyoming offers stronger member anonymity — Delaware just isn’t built for that goal.
- Budget for the franchise tax every year, not only at formation. Over five years it adds up to $1,500+, versus Wyoming’s flat annual report fee.
- Use a real street address for your registered agent. Delaware law doesn’t accept a PO box.
- If you’re planning to raise venture capital, start as a C-Corp, not an LLC. Most VCs want the entity type they already know, and converting later adds cost you can skip by starting there.
Is Delaware the right call for you?
Delaware tends to fit if you:
- Plan to raise venture capital or bring in institutional investors
- Expect to convert to a C-Corp down the line
- Anticipate complex litigation where Court of Chancery expertise matters
- Want the entity type investors and their lawyers already recognize
Wyoming tends to fit if you:
- Want the lowest possible ongoing costs
- Value stronger member privacy
- Are running a bootstrapped, solo, or small-team business with no outside funding plans
If you’re not sure yet, that’s a normal place to start from — we help you weigh it as part of every company formation conversation.
Quick answers
Can non-US residents form a Delaware LLC?
Yes. There’s no citizenship, visa, or Social Security Number requirement. We handle the entire process remotely, from filing through your EIN.
Do I need to visit Delaware in person?
No. Formation, registered agent service, and the EIN application are all handled without you setting foot in Delaware or the US.
Delaware LLC or Delaware C-Corp — which one?
An LLC gives you pass-through taxation and simpler ongoing management, which suits most non-resident-owned businesses. A C-Corp makes sense specifically if you’re raising venture capital, since that’s the structure most US investors expect.
Will I owe US federal income tax?
Only if your business is engaged in a US trade or business, or earns US-sourced income. Foreign-sourced income with no US trade or business typically means no federal income tax — but Form 5472 and the pro-forma 1120 are still due every year, regardless of income.
Ready to form your Delaware LLC? Our company formation plans start at $199/year and cover the Certificate of Formation, registered agent, EIN, and operating agreement in one pass. Once you’re up and running, our accounting service keeps your books current in Xero, and our federal tax filing service handles the annual 5472 and 1120 — so nothing falls through the cracks.
