Some states’ LLC offerings rise to the top as particularly advantageous, so learning the best states to start and LLC and why can be helpful in saving you time and money.
Entrepreneurs and digital nomads are choosing to operate their businesses globally, enjoying the freedom to work from anywhere. One of the most strategic steps in building a flexible business is choosing the right state in which to form your LLC. With varying laws, taxes, and costs across the U.S., which are truly the best state’s LLCs for your needs? This breaks down the top options and why they’re ideal for remote entrepreneurs.
Key Factors to Consider When Choosing the Best State’s LLC
Whether you are a global entrepreneur or a digital nomad solopreneur, these are important considerations when determining which state to register your LLC. They are not all created equal, and depending on your priorities, one state may make more sense than another.
- Formation & Maintenance Costs: Initial registration fee and annual reports.
- Tax Policies: State income, franchise, and sales taxes.
- Business Laws & Courts: Friendly legal environment and dispute resolution.
- Privacy & Confidentiality: Protecting ownership information.
- Residency Requirements: Whether you need to be physically present in the state.
- Ease of Registration: Online filing options and bureaucratic hurdles.
Top 4 Best States for Starting an LLC
Based on the above factors, here are the best state’s LLCs offering the most benefits for digital nomads and global entrepreneurs:
1. Delaware
Delaware is known for its business-friendly legal system, especially its Court of Chancery. This is a unique feature of the state of Delaware. A court of chancery is defined as:
A type of court that focuses on equity and fairness rather than strictly adhering to the letter of the law. It was originally established in England to address cases where common law courts couldn’t provide adequate remedies. These courts have jurisdiction over specific types of cases, often involving trusts, real property, or situations where fairness requires a different approach than traditional legal remedies.
By its nature it is more accommodating and flexible to the parties and the particular circumstances of a given case. It is also staffed with judges well versed in corporate and business law, making them more knowledgeable on the nuances of LLC disputes.
It is a non-jury format, focused on efficiency in resolving disputes, so you aren’t tied up for years in litigation. Facilitating that is the state’s long history of corporate case law, making its framework both consistent and predictable.
Tax benefits include no sales or income tax, provided you don’t do business in that state, as well as low franchise taxes.
Additionally, the state allows for anonymous ownership and has no mandatory physical presence requirements.
Delaware has one of the best state’s LLCs for: Entrepreneurs seeking legal stability and privacy, especially those planning to scale or attract investors.
2. Wyoming
Wyoming’s crowning jewel is its uniquely favorable laws that promote asset protection. All LLCs to some degree offer this, of course. Wyoming has what’s called a “charging order protection”. It’s the only remedy for creditors. This protection prevents creditors from seizing business’s assets or any control of the business by forcing the sale of interests in that business. They can only be paid through distributions to the debtor (i.e. through its revenue streams).
Moreover, the state of Wyoming does not automatically recognize foreign judgements. This doesn’t just apply to other countries, but to other states.
Wyoming touts a very economical solution for business structuring with its low formation and annual maintenance costs, as well as having no state income taxes regardless of whether you do business in that state or not.
Along with its asset protection features, it offers strong privacy protections as members and managers are not publicly disclosed.
Wyoming has one of the best state’s LLCs for: Digital nomads who want a low-cost, privacy-focused option.
3. Nevada
Nevada has one of the more flexible LLC options in the union with fewer requirements for meetings, record-keeping, and reporting, compared to other states. It doesn’t require businesses to file annual reports for corporations. Instead, businesses only need to file an Annual List of Officers. it also doesn’t impose restrictions on the number of shareholders in a corporation.
There are also many tax exemptions for setting up manufacturing and data center businesses in this state.
Similar to Delaware, if not parity to Delaware, they also have dedicated courts with expert judges in corporate and business case law to help streamline dispute resolution. Because of the simplified business laws, fewer disputes arise from legal complexities of business formations.
In terms of taxes, Nevada ranks in the top ten most business friendly along with Wyoming. It has no state income tax on personal or corporate income, nor does it levy any franchise or inventory taxes. It does, however, have a modified business tax and a gross receipts tax. The former kicks in on payroll exceeding $50,000 and the latter kicks in at gross revenue exceeding $4,000,000.
Finally, Nevada is another state which doesn’t require the disclosure of member names or shareholders.
Nevada has one of the best state’s LLCs for: Those wanting strong privacy and tax advantages without residency requirements.
4. New Mexico
New Mexico has one of the lowest startup costs with minimal ongoing paperwork. It has no annual fee or reporting requirements. Both New Mexico and Nevada allow you to choose whether to be processed as an S-Corp or a C-Corp. This flexibility allows businesses to determine what is most beneficial to them.
Like the other states listed, it has strong privacy protections. But New Mexico uniquely allows for the formation of “anonymous LLCs.” This means that when filing the Articles of Organization, the names of the members and managers are not required to be listed on public record. With the other states, the states still require members and managers to be listed, they just don’t share that information. In New Mexico, you don’t even have to list the names at all!
Moreover, New Mexico allows online management of your LLC which is great for those not residing in the state.
New Mexico has one of the best state’s LLCs for: Entrepreneurs prioritizing privacy, convenience, and cost-effectiveness.
What Makes These States the “Best” for LLC Formation?
Each of these states provides unique advantages — from legal protections to cost savings — aligning well with the needs of digital nomads who often value privacy, simplicity, and tax efficiency. Their flexible requirements and business-friendly laws make them the top picks for entrepreneurs operating remotely.
Additional Tips for Digital Nomads & Global Entrepreneurs
- Remote Registration: Many states allow online filing, making LLC formation seamless regardless of location.
- Registered Agents: Hiring a registered agent ensures your LLC maintains compliance while you’re traveling.
- Maintaining Compliance: Keep up with filing deadlines and annual fees to stay in good standing, even if you’re abroad.
Choosing the best state for your LLC is a crucial step in building your remote or global business. Whether you prioritize privacy, low costs, or legal protections, the states outlined above are excellent options to consider. Evaluate your specific needs, consult with a legal or business professional, and confidently take the next step toward establishing your LLC.
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