Non-Resident LLCs: Which State Saves You $1000? [2025]

Last Updated on 2 days by Komolafe Bamidele

Look, I’ve been in this business for years now, and I can’t tell you how many times I’ve seen foreign entrepreneurs struggle to break into the US market simply because they didn’t have the right business structure, I mean, Non-Resident LLCS.

 I remember working with a client from Thailand last year who was losing nearly 15% of his potential customers because they wouldn’t send payments to an overseas account. 

Three weeks after setting up his Wyoming LLC, his conversion rate jumped dramatically.

That’s the power of having a US-based business presence, and it’s why I’m passionate about helping non-residents navigate this process.

The LLC Benefits That My Clients Actually Care About

When I sit down with new clients, they usually come to me with the same concerns: “Will this help me get paid easier?” and “Am I going to end up with a US tax nightmare?”

Let me address both of these head-on.

One of my clients from Brazil was losing deals simply because potential US clients would see his foreign payment details and ghost him. 

It wasn’t that they didn’t want his services, they just didn’t want the hassle of international transfers.

With a US LLC, you get:

• A US bank account where clients can send payments as easily as they would to any local business
• Access to Stripe with dramatically lower decline rates (I’ve seen improvements from 15-20% declines down to 3-4%)
• The ability to accept ACH transfers, which many US businesses prefer for B2B transactions

I had another client from Malaysia who was running an e-commerce store and struggling with almost 30% payment declines. 

After setting up his US LLC and connecting a US Stripe account, that number dropped to under 5% overnight. That’s not a small improvement, it’s business-changing.

The Tax Situation Is Better Than You Think

Here’s where most people get confused, so let me clear this up once and for all: If you’re not physically doing business in the US, if you don’t have employees or an office in the US,

 And if you’re not a US resident yourself, the US government generally doesn’t want to tax your LLC’s income.

I know that sounds too good to be true, but it’s how the system is designed. The US taxes are based on either:

1. Your personal connection to the US (citizenship/residency)
2. Income effectively connected with a US trade or business

Without either of those, your LLC becomes what’s called a “disregarded entity” for tax purposes. 

You’ll still need to file some informational forms (and I’ll get to those later), but you’re not looking at actual US tax liability in most cases.

Of course, you’ll still pay taxes wherever you’re personally a tax resident—I’m not offering some magical global tax evasion strategy here. 

The advantage is that you get all the US business benefits without adding an extra layer of taxation.

The States I Actually Recommend (And Why I Have Strong Opinions)

After helping hundreds of clients through this process, I’ve developed some pretty strong opinions about which states make sense for non-residents. 

Let me break it down for you.

Wyoming: My Go-To Recommendation for Most Clients

I’ll just say it outright: Wyoming is my default recommendation for about 80% of the non-resident entrepreneurs I work with, and here’s why:

The privacy protection is unmatched, your name doesn’t appear in any public records.

 I had a client from Germany who was concerned about competitors finding out about his US expansion plans. With Wyoming, they had no way of connecting him to the US entity.

The annual fees are ridiculously low at just $62 for renewal. Compare that to Delaware’s $300 or California’s $800 minimum tax, and it’s not even close.

The state filing office actually answers their phone when there’s an issue. 

This might sound trivial, but when you’re dealing with government bureaucracy from another country, having someone actually pick up the phone is worth its weight in gold.

I also love that Wyoming doesn’t try to nickel-and-dime you with extra fees and requirements that crop up after formation. What you see is what you get.

Delaware: Only If You’re Raising Serious Investment Capital.

Here’s a controversial take: most non-residents forming an LLC in Delaware are wasting money. 

I know that might ruffle some feathers, but hear me out.

Delaware makes perfect sense if:

• You’re planning to raise venture capital (VCs love Delaware)
• You might convert to a C-Corporation soon for investment purposes
• You anticipate complex business litigation (their Court of Chancery is excellent)

For everyone else? You’re paying extra for prestige you probably don’t need.

I had a solopreneur client from India who was adamant about forming in Delaware because “all the big companies are there.”

 After I walked him through the additional $238 in annual fees he’d be paying compared to Wyoming, with no tangible benefit for his particular business model, he quickly changed his mind.

Florida: When You Actually Visit the US Regularly.

Florida can be a solid choice if you physically come to the US often and want the convenience of in-person banking. 

The annual fee is reasonable at $125, and there’s no state income tax.

One of my clients splits his time between Colombia and Miami, spending about 4 months a year in Florida. 

For him, having a Florida LLC meant he could walk into his bank whenever he was in town, which made certain transactions much smoother.

The downside? Your ownership information is public record. If privacy matters to you, this is a significant drawback.

The States I Tell My Clients to Always Avoid.

I’ve had clients come to me after making costly mistakes with their initial state selection. 

Let me help you avoid these pitfalls.

California: The Money Pit.

I don’t care what anyone tells you, forming an LLC in California as a non-resident is almost always a bad move. 

The $800 annual tax is just the starting point. 

They also have one of the most aggressive tax enforcement divisions in the country.

I had a client who formed there because he had family in California, thinking it would make things easier.

 Two years and nearly $2,000 in state fees later, he moved his LLC to Wyoming and wished he’d done it sooner.

New York: The Paperwork Challenges.

New York requires new LLCs to publish formation notices in approved newspapers,

an antiquated requirement that can cost anywhere from $200 to over $1,000 depending on the county.

Add in their complex tax filing requirements, and New York quickly becomes one of the least non-resident-friendly states for LLC formation.

New Mexico: Not As Great As Some Claim.

I’ve seen some formation services aggressively market New Mexico LLCs for their supposed privacy benefits, 

but let me be clear: Wyoming offers superior privacy protection with better overall business laws.

New Mexico also has a gross receipts tax that can complicate matters for certain business types.

 I generally steer clients away from New Mexico unless they have a specific reason to be there.

So what are you waiting for? Just get started. The company’s official website link is here: Bizee.

The 8 Steps You Need to Take to Form an LLC as a Non-Resident 

Let me walk you through exactly what needs to happen to get your US LLC up and running:

Step 1: Choose Your State (You Know My Recommendation)

Based on everything I’ve shared, pick the state that aligns with your needs. For most of you reading this, that’s going to be Wyoming, but consider your specific circumstances.

Step 2: Find a Registered Agent You Can Trust

Your registered agent is your official point of contact in the state. Since you don’t live in the US, you’ll need to hire a service for this. 

Prices range from $25 to $200 annually.

This is not where you want to cut corners. A reliable registered agent is critical, if they miss a service of process or important state notice,

 you could find yourself with a default judgment against your company or administratively dissolved.

I’ve seen clients try to save $50 a year by going with the cheapest option, only to discover their “registered agent” was essentially a mail forwarding service that wasn’t properly maintaining the required physical office.

Step 3: File Your LLC Formation Documents

This is the actual creation of your LLC. In Wyoming, it costs $100 and can be done entirely online. The state typically processes filings within 3-5 business days.

You’ll need to choose a name for your LLC (make sure it’s available in your selected state), provide your registered agent information, and sign as the organizer.

Step 4: Get Your EIN (This Can Be Tricky for Non-Residents)

The Employer Identification Number (EIN) is your company’s tax ID, and you’ll need it to open a bank account.

Here’s where things get sticky for non-residents: the normal online application requires a Social Security Number, which you don’t have. You’ll need to:

• Apply using Form SS-4
• Usually submitted by fax or mail
• Wait 8-11 weeks for processing

Or work with a formation service that can help expedite this process. I’ve seen clients successfully get their EINs in as little as 1-2 weeks with the right support.

Step 5: Set Up a US Business Address

Beyond your registered agent, you’ll want a proper business address for correspondence. 

Virtual mailbox services like Bizee Virtual Address or Anytime Mailbox can provide this, giving you a physical US address where your mail is received, scanned, and viewable online.

Make sure the address is a real street address (not a P.O. Box), as banks and payment processors will require this.

Step 6: Open Your US Bank Account

With your LLC formation documents and EIN in hand, you’re ready to open a US bank account. For non-residents, I typically recommend Mercury or Wise Business.

Mercury is particularly non-resident-friendly, with a completely online application process and no requirement to visit the US. I’ve had clients get approved in as little as 24 hours.

Traditional banks like Chase or Bank of America generally require you to appear in person, which obviously isn’t practical for most non-residents.

Step 7: Set Up Payment Processing

Once your bank account is open, connect a payment processor like Stripe to start accepting credit card payments. The application is straightforward, and approval typically takes 1-2 business days.

If your business model requires PayPal, be aware that getting a US PayPal Business account as a non-resident is challenging. 

It requires an ITIN (Individual Taxpayer Identification Number), which has its own application process.

Step 8: Handle Your Compliance Requirements

This is where many non-residents run into trouble. Your LLC has ongoing compliance requirements:

• Annual reports and fees to the state
• Informational tax filings to the IRS (Form 5472 and 1120 for foreign-owned single-member LLCs)
• Potential BEA filings depending on your business activities
• Corporate Transparency Act filings (new requirement as of 2024)

Missing these filings can result in penalties starting at $25,000, so this isn’t something to take lightly.

Let Me Be Straight With You About Formation Services

You have two options: do this yourself or use a formation service. If you go the DIY route, you’ll save some money but spend a lot more time navigating unfamiliar systems and requirements.

In my experience, most non-residents are better off using a reputable formation service.

 I’ve partnered with Bizee because they’ve consistently delivered for my clients, offering:

• Complete LLC formation handling
• Registered agent service included for the first year
• EIN obtainment assistance
• Compliance alerts for ongoing requirements

With Bizee, you can incorporate your business at just $0, plus the state fees. That’s more than $250 you’ll be saving that can be put right back to work in your new business.

 Not to mention, you get a Registered Agent service free of charge for a year to keep your business in compliance.

Here’s why I specifically recommend them:

• Each of the three Bizee packages include Registered Agent service FREE for the first full year.
• Bizee gives you unlimited access to email and phone support to assist with any questions and concerns.
• A FREE 30-minute Business Tax Consultation is provided with every package.
• Bizee has an order tracking tool that will allow you to monitor the status of your order in real time.
• Each order includes Next Day Processing—they’ll conduct a name search, draft your articles, and forward to the state for processing in just one business day.

The Bottom Line:

After years of helping non-residents navigate this process, my biggest advice is simple: don’t overthink it. Pick a state (Wyoming for most), get your LLC formed, and focus on actually running your business.

The clients who succeed aren’t the ones who spend months researching every minor detail—they’re the ones who take action, get their US business presence established, and start generating revenue.

The US market is too valuable to miss out on because you’re stuck in analysis paralysis. Get started with Bizee today and put yourself on the path to US market access within days, not months.

Your future self will thank you for taking this step now rather than continuing to lose out on potential US business opportunities.