Wyoming Corporation vs Delaware Corporation for Foreign Founders
Compare Wyoming and Delaware corporations on cost, privacy, investor appeal, franchise tax and compliance, and find out which suits your non-resident business.
You have decided that a corporation (Inc) is the right structure. The next question is where to incorporate. For non-residents without a physical presence in a particular state, the choice usually comes down to Delaware or Wyoming. Both are excellent; they are excellent at different things.
The comparison
| Delaware corporation | Wyoming corporation | |
|---|---|---|
| State filing fee | About $109 | About $100 |
| First-year total with UCB (incl. EIN and RA) | About $258 | About $249 |
| Annual state cost | Franchise tax ($175–$400 minimum for most startups) + $50 report fee | Annual report, license tax from $60 |
| Annual deadline | March 1 | First day of the anniversary month |
| Investor appeal | Very high; the venture capital standard | Moderate |
| Corporate law and courts | Most developed in the USA; specialised Court of Chancery | Modern, business-friendly |
| Privacy | Directors and officers listed in the annual report | Strong privacy |
| State corporate income tax (no in-state activity) | None on out-of-state activity | None |
Choose Delaware if…
- you plan to raise venture capital or apply to a US accelerator,
- you will issue preferred stock and stock options using standard US documents,
- your lawyers, co-founders or investors require Delaware, or
- you want the most widely recognised structure for an eventual acquisition or listing.
See why startups choose a Delaware C-Corp.
Choose Wyoming if…
- you want a corporation for liability, credibility or tax reasons but do not plan to raise venture capital,
- you value low annual costs and simple compliance,
- you value privacy, or
- you are setting up a holding company or a stable operating business.
See Wyoming LLC for non-residents for more on Wyoming's advantages.
Delaware's franchise tax: manageable if handled right
Delaware's default franchise tax calculation, based on authorised shares, can show tens of thousands of dollars for a startup with millions of shares. Filing with the assumed par value method usually brings it down to around the $400 minimum. It is a one-page issue once you know it, but it surprises many founders. See Delaware franchise tax explained.
Federal tax is the same
Your choice of state does not change federal tax. Both pay the 21% federal corporate tax and file Form 1120, plus Form 5472 if 25% or more foreign-owned. See the 21% corporate tax explained.
Operating somewhere else?
If the corporation will have an office or staff in another state, for example New York or California, it must register there as well, whichever state it was formed in. In that case, forming directly in the operating state may make sense. See state taxes for foreign-owned companies.
Can I move later?
Yes. A corporation can change its state of incorporation (redomicile) through a conversion or merger. It involves filings, fees and updating banks and contracts. If fundraising is a realistic prospect in the next year or two, starting in Delaware avoids the move.
What about an LLC?
If you are not sure you need a corporation at all, read LLC or Inc for non-residents. Many solo founders are better served by a Wyoming or New Mexico LLC.
How UCB helps
We incorporate in Delaware, Wyoming or any other state, act as your registered agent, obtain your EIN, open your US bank account and handle annual reports and franchise tax. Prices are on the Delaware and Wyoming pages.
Not sure which state fits your plans? WhatsApp us at +91 8105 199 399 or email info@ucbsolutions.com and tell us about your business. We will recommend one.
Let our experts handle it for you
Every business is different. Message us with your country, business type and goals, and we will recommend the right structure, state and package. We do the work; you focus on your business.
This article is general information for non-resident business owners and is not legal or tax advice. Rules and fees change; contact us to confirm what applies to your situation.
