Best States to Form an LLC
The best state to file an LLC for most people is their home state where they live and do business. If you form an LLC outside of your home state, you may need to register it as a "foreign LLC" which has extra fees and paperwork. However, two exceptions are:
1) If you are a non-US resident, Wyoming and Delaware are good options since you don’t have a home state. They have business-friendly laws and low taxes.
2) For real estate LLCs, you can choose a different state than where your properties are located to save on taxes and fees. Some popular options are Alaska, Nevada, and Wyoming since they don’t have high annual state fees.
Foreign vs Domestic LLCs
When choosing where to form an LLC, make sure to research the specific costs, taxes, and paperwork requirements for that state. Annual state fees for LLCs range from $35-$500 per year depending on the state. Also consider whether the state has favorable business laws and taxation policies for your particular business.
Two exceptions exist. If you are a non-US resident, Wyoming and Delaware are good options since you have no home state. For real estate LLCs, choose a different state than where your properties lie to save on taxes and fees.
Considerations for LLC Formation
When making an informed decision on where to form your LLC, consider if the state has favorable business laws and tax policies for your particular business. Taking the time to research can save you money and headaches later.