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LLC formation · State rankings · All 50 states

Best States to Form an LLC in 2026 — Ranked by Cost, Privacy & Asset Protection

Not all states are equal for LLC formation. Wyoming offers charging-order exclusivity and anonymous membership. New Mexico has no annual report requirement. Delaware has the most established LLC case law. This hub ranks the top 10 states across five dimensions — filing fee, annual fee, franchise tax burden, anonymity (member name disclosure), and asset protection depth — and links to all 50 state formation guides.

Last verified: 2026-10-23 All 50 states covered 10 states ranked
Lowest filing fee: $50 (New Mexico) #1 overall: Wyoming 50 state guides linked

#1 — Wyoming

$100 filing / $60/yr

#2 — New Mexico

$50 filing / $0/yr

#3 — Delaware

$90 filing / $300/yr

#4 — Nevada

$75 filing / $350/yr

Methodology

How we ranked these states

Rankings weight five factors: (1) Filing fee — one-time SOS cost to form the LLC; (2) Annual fee — recurring annual report or periodic filing fee; (3) Franchise tax — state-level income or privilege tax on LLC earnings; (4) Anonymity — whether member names appear on public SOS records and whether nominee-member structures are permissible; (5) Asset protection — depth of charging-order protection (single-member and multi-member), reverse veil-piercing protection, and series LLC availability. Rankings are most relevant for non-resident founders choosing a formation state for operational or planning reasons. Residents forming a local business should generally form in their home state to avoid dual foreign-qualification costs.

Rankings

Top 10 states for LLC formation — head to head

Sortable by filing fee, annual fee, franchise tax, anonymity, and asset protection. Last verified 2026-10-23.

Rank State Filing Fee Annual Fee Franchise Tax Anonymity Asset Protection Best For
#1 Wyoming $100 filing · No franchise tax $100 $60/yr None A+ A+ Non-residents seeking maximum privacy and asset protection
#2 New Mexico $50 filing · $0 annual report $50 $0/yr None A+ A Maximum anonymity with lowest ongoing cost
#3 Delaware $90 filing · Court of Chancery $90 $300/yr $300/yr alternative entity tax A A Investor-backed companies and legal certainty
#4 Nevada $75 filing · No state income tax $75 $350/yr None (but $200 initial + $200/yr business license) A A Privacy-focused businesses with Nevada presence
#5 Colorado $50 filing · $10/yr $50 $10/yr None B B Residents seeking lowest total cost of ownership
#6 Montana $70 filing · No sales tax $70 $15/yr None B B E-commerce and online businesses (no sales tax)
#7 South Dakota $150 filing · Nation-leading trust laws $150 $50/yr None B A Asset protection for trusts and holding structures
#8 Florida $125 filing · No state income tax $125 $138/yr None B A Florida residents and businesses with Florida operations
#9 Texas $300 filing · No income tax $300 $0/yr 0.375%–0.75% of revenue (none if under $2.47M) B B Texas residents and businesses — largest state economy
#10 Alaska $250 filing · No state income or sales tax $250 $100/yr None B A Asset protection via Alaska DAPT structures

Anonymity and asset protection scores reflect charging-order exclusivity, member name disclosure requirements, and the depth of the state's LLC statute. Filing fee and annual fee are verified against each state's Secretary of State portal. Click any state name to go to the full step-by-step formation guide.

Deep dives

Why these states rank at the top

#1 — WY

Wyoming

Filing fee
$100
Annual fee
$60/yr
Franchise tax
None
Anonymity
A+
Asset protection
A+

Best overall for non-resident founders: strong charging-order exclusivity (single-member and multi-member), no member name disclosure required on SOS filings, Series LLC available, no state income tax, and only $100 filing fee. Wyoming has invested years in making its LLC statute the most protective in the U.S. — the 2010 Wyoming LLC Act and subsequent amendments created explicit charging-order exclusivity and anti-reverse-veil-piercing protections that most other states do not have.

Full guide →

#2 — NM

New Mexico

Filing fee
$50
Annual fee
$0/yr
Franchise tax
None
Anonymity
A+
Asset protection
A

Best for anonymity and lowest ongoing cost: New Mexico is the only state with NO annual report requirement — once formed, there are no recurring state fees. Member names are not required on the Articles of Organization (only the registered agent is disclosed), making it the most anonymous formation state in the U.S. No state franchise tax. Filing fee is only $50 — the lowest in this ranking. Ideal for holding companies, real estate LLCs, and founders who want maximum privacy with no recurring state overhead.

Full guide →

#3 — DE

Delaware

Filing fee
$90
Annual fee
$300/yr
Franchise tax
$300/yr alternative entity tax
Anonymity
A
Asset protection
A

Best for investor-backed startups and legal predictability: Delaware has the most developed LLC case law, the dedicated Court of Chancery (no jury, sophisticated business judges), and is required by most VC investors and institutional lenders. Member names are not required on the Certificate of Formation. The $300/yr alternative entity tax is the primary downside for cost-conscious founders. For a bootstrapped solo LLC, Wyoming or New Mexico cost less — but Delaware is preferred when outside investment or institutional financing is anticipated.

Full guide →

#4 — NV

Nevada

Filing fee
$75
Annual fee
$350/yr
Franchise tax
None (but $200 initial + $200/yr business license)
Anonymity
A
Asset protection
A

Strong privacy and asset protection with no state income tax, but higher-than-advertised fees: the $75 filing fee is deceptive — Nevada also requires a $200 initial business license and $200/yr renewal (in addition to the $150/yr annual report), bringing the true year-1 cost to $625 and year-2+ to $350/yr. No state income tax. No nominee-manager/member requirement — members do not appear on public records. Strong charging-order protection. Nevada remains a top-5 jurisdiction but has been eclipsed by Wyoming on most protection metrics at lower cost.

Full guide →

#5 — CO

Colorado

Filing fee
$50
Annual fee
$10/yr
Franchise tax
None
Anonymity
B
Asset protection
B

Best for cost-minimizing residents: $50 filing fee and only $10/yr periodic report makes Colorado the lowest-cost combined (filing + annual) option in this ranking, excluding New Mexico's $0 annual report. No state franchise tax. No state income tax deduction benefit (Colorado has a 4.4% state income tax). Member names are disclosed on public SOS filings. Asset protection is standard — no enhanced charging-order statute. Best suited for Colorado residents forming a local business who want simplicity and low cost.

Full guide →

#6 — MT

Montana

Filing fee
$70
Annual fee
$15/yr
Franchise tax
None
Anonymity
B
Asset protection
B

Best for e-commerce and sales-tax-sensitive businesses: Montana is one of five states with no sales tax (joining Alaska, Delaware, New Hampshire, and Oregon), which matters for businesses selling physical goods. $70 filing fee and only $15/yr annual report. No state franchise tax. Members' names are publicly listed in annual reports. Asset protection follows the standard LLC statute — no enhanced charging-order statute. Montana LLCs are popular for vehicle titling (no sales tax on purchases) and online retail operations.

Full guide →

FAQ

Best states for LLC — common questions

What is the best state to form an LLC in 2026?

For most non-resident founders choosing a formation state purely for liability and tax advantages, Wyoming is the best state overall in 2026. Wyoming offers: (1) charging-order exclusivity as the exclusive remedy for LLC creditors — protecting single-member LLCs where many states do not; (2) no member name disclosure requirement on SOS filings; (3) no state income tax; (4) no franchise tax; (5) Series LLC availability; and (6) only $100 filing fee + $60/yr annual report. For maximum anonymity with zero ongoing fees, New Mexico ($50 filing, $0 annual report, members not on public record) is the top alternative. For investor-backed startups requiring VC investment, Delaware remains the de facto standard regardless of the cost premium. For residents forming a local operating business, form in your home state — the cost of foreign qualification and dual annual reports in two states (home state + formation state) exceeds any advantage from forming out-of-state.

Should I form my LLC in Wyoming even if I live in another state?

It depends on your goals. The cost-benefit calculation for a non-resident Wyoming LLC: Advantages — stronger asset protection than most states, no state income tax, no franchise tax, anonymous ownership, $100 filing fee. Costs — if you do business in your home state, you must foreign-qualify your Wyoming LLC there (typically $50–$300) and pay that state's annual report fee AND Wyoming's annual fee. For an LLC that operates primarily in a single state (say, a Texas real estate investor), the foreign-qualification overhead plus dual annual report fees may exceed the protection benefit. The Wyoming advantage is highest for: (1) holding companies that don't operate in any specific state, (2) multi-state businesses where Wyoming provides a superior central jurisdiction, (3) founders who prioritize privacy above all else, and (4) asset protection planning where enhanced charging-order protection is the primary goal. For a sole proprietor operating a local service business in Ohio, forming in Ohio is usually more practical and cost-effective.

Why is New Mexico ranked so high if it's not commonly mentioned?

New Mexico's advantage is unique and often overlooked: it is the only state with NO annual report requirement. Once formed, a New Mexico LLC has zero recurring state fees — $50 one-time, then nothing. Member names are not required on the Articles of Organization (only the registered agent is publicly listed), making it the most anonymous formation state in practice. No state franchise tax. The drawback: New Mexico's LLC statute is less developed than Wyoming's or Delaware's — there is no explicit statutory charging-order exclusivity, and the case law is less robust. New Mexico is ideal for holding companies, real estate LLCs with no active operations, intellectual property holding structures, and founders who want maximum privacy with minimal overhead and are comfortable with a less-tested LLC statute.

What does 'anonymity score' mean — can I really hide my name from an LLC?

Anonymity in LLC formation refers to whether member (owner) names appear on publicly searchable state SOS filings. In most states, the Articles of Organization require listing the members' or organizer's names — these become public record and searchable on the state SOS website. In Wyoming, New Mexico, and Delaware, the Articles do not require member names — only the registered agent (which can be a commercial RA service) appears on public filings. This means someone searching the state SOS database cannot directly identify the LLC's owner. Important caveats: (1) Anonymity is not absolute — a court order, IRS summons, or federal subpoena can compel disclosure of beneficial ownership. (2) Banks must identify the owners when you open a business account, and the IRS EIN application names a responsible party. US-formed LLCs no longer file FinCEN beneficial ownership (BOI) reports, under FinCEN's final rule effective August 14, 2026. (3) Using a nominee member (a stand-in who holds nominal ownership on paper) is legal in some states but creates complex legal risks and should only be done with attorney guidance. Practical anonymity means: your name won't appear on the SOS website that a creditor, litigant, or journalist can find in a casual search — but it won't protect you from a court order or federal law enforcement.

What is a charging order and why does it matter for LLC asset protection?

A charging order is the legal mechanism by which a personal creditor of an LLC member can attempt to collect from the member's LLC interest. Instead of seizing the membership interest (which would give the creditor control of the LLC), a charging order directs the LLC to pay the creditor any distributions that would have gone to the debtor-member — but only when distributions are actually made. If the LLC makes no distributions, the creditor gets nothing. In most states, the charging order is the exclusive remedy for personal creditors of LLC members. However, in states with weak LLC statutes, courts have allowed creditors to 'foreclose' on an LLC membership interest (taking actual ownership) or pierce the LLC veil to reach underlying assets. Wyoming's 2010 LLC Act explicitly makes the charging order the EXCLUSIVE remedy for both multi-member AND single-member LLCs — this is critical because most courts in other states have allowed foreclosure on single-member LLC interests (reasoning that no other members would be harmed by the creditor taking ownership). The practical result: Wyoming charging-order protection is much stronger than the default in states like Florida, California, or Texas for single-member LLCs.

What is the cheapest state to form an LLC with the lowest ongoing costs?

New Mexico is the cheapest in total lifetime cost: $50 one-time filing fee, $0 annual report (no recurring state fees ever). If you only need one LLC and plan to maintain it for years, New Mexico has the lowest lifetime cost of any state. For a 10-year period: New Mexico = $50 total. Colorado = $50 + ($10 × 9) = $140 total. Montana = $70 + ($15 × 9) = $205 total. Wyoming = $100 + ($60 × 9) = $640 total. New Mexico's caveat: no explicit statutory charging-order exclusivity and no annual report means less accountability pressure to keep the LLC in good standing — founders must self-monitor their registration status. For founders who prioritize both cost AND asset protection, Wyoming ($100 + $60/yr) is the better value despite the higher ongoing cost.

All states

LLC formation guides — all 50 states

Step-by-step guides with exact filing fees, required documents, timelines, and official SOS sources.

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