Delaware LLC in United States
LLC · Formation from $110
Last verified: June 10, 2026
Corporate Tax
0.0%
State Tax
0.0%
Formation Cost
$110
Annual Fee
$300
Comparison Scores
Privacy, remote setup, banking, and tax efficiency
Calculate full formation cost
Break down one-time filing fees and recurring costs for any supported entity type.
Who Should Choose This?
Profiles that typically benefit from this entity
- Non-US residents looking for a globally recognized and trusted US entity to access US payment gateways like Stripe and PayPal.
- Tech startups and SaaS founders who want a flexible structure now but might convert to a C-Corp later for venture capital.
- Entrepreneurs seeking strong asset protection and privacy, as owner names are not on the public registry.
- E-commerce businesses and digital nomads operating globally without a physical presence in any specific US state.
Who Should Avoid This?
Scenarios where another structure may be better
- Local brick-and-mortar businesses (like restaurants or retail shops) operating in another US state, as they will face double registration fees.
- Founders looking for the absolute lowest ongoing maintenance costs, as the $300 annual franchise tax is higher than states like Wyoming or New Mexico.
- Startups that are immediately raising venture capital from top-tier institutional investors (they should form a Delaware C-Corp instead).
Advantages
- +Court of Chancery: A specialized business court with expert judges and predictable case law, ensuring efficient resolution of corporate disputes.
- +High Privacy: Members and managers are not required to be listed on the public Certificate of Formation, offering excellent anonymity.
- +Tax Efficiency: 0% state income tax and no sales tax if the LLC does not conduct business physically within Delaware.
- +Investor Familiarity: The gold standard for US entities; highly trusted by angel investors, venture capitalists, and global banks.
- +No Annual Report: Unlike corporations, Delaware LLCs do not need to file a complex annual report, simplifying yearly compliance to just a flat tax payment.
- +Flexible Structuring: Delaware's LLC Act allows maximum freedom of contract, meaning you can structure profit distribution and management exactly how you want in the Operating Agreement.
Disadvantages
- -High Annual Franchise Tax: A flat $300 franchise tax is due every year on June 1st, regardless of the company's revenue or activity.
- -Foreign Qualification Costs: If you operate physically in another US state, you must register and pay fees in both Delaware and your home state.
- -Registered Agent Requirement: You must maintain a registered agent in Delaware, adding an ongoing annual cost of $50 to $300.
- -Not Ideal for Local Brick-and-Mortar: Overkill and more expensive for small local businesses that don't need complex legal structuring.
- -Strict Late Penalties: Missing the June 1st franchise tax deadline results in an immediate $200 penalty plus 1.5% monthly interest.
Formation Steps
Choose a Name: Select a unique business name ending with 'LLC' and ensure it is available in the Delaware Division of Corporations database.
Appoint a Registered Agent: Hire a Delaware-based registered agent to receive legal documents and service of process on your behalf.
File Certificate of Formation: Submit the Certificate of Formation to the Delaware Division of Corporations and pay the $110 state filing fee.
Draft an Operating Agreement: Create an internal Operating Agreement to outline ownership structure and operating procedures (this is kept internally and not filed with the state).
Obtain an EIN: Apply for an Employer Identification Number (EIN) from the IRS for tax purposes and to open a US business bank account.
File BOI Report: Submit the mandatory Beneficial Ownership Information (BOI) report to FinCEN within 90 days of formation to comply with federal transparency laws.
Open a US Bank Account: Use your EIN, Certificate of Formation, and Operating Agreement to open a business bank account with a US bank or fintech platform.
Cost Breakdown
Detailed breakdown of formation and ongoing costs
| Item | Type | Amount |
|---|---|---|
| State Filing Fee (Certificate of Formation) | One-time | $110 |
| Registered Agent Service | Annual | $100 |
| EIN Application (DIY) | One-time | $0 |
| Delaware Annual Franchise Tax | Annual | $300 |
| First year total | $210 | |
| Annual ongoing | $400 | |
Real-World Examples
Typical use cases for this entity type
- A European software developer forms a Delaware LLC to open a US Stripe account, allowing them to seamlessly charge global customers in USD without paying US state taxes.
- A group of international founders starts a SaaS company as a Delaware LLC to establish product-market fit, later converting it to a Delaware C-Corp when accepted into Y Combinator.
- An Amazon FBA seller based in Asia uses a Delaware LLC to protect their personal assets from product liability claims while benefiting from Delaware's strong privacy laws.
Common Mistakes
Pitfalls to avoid during setup and operations
- Forgetting the June 1st Franchise Tax Deadline: Missing this date triggers an automatic $200 penalty and 1.5% monthly interest.
- Forming in Delaware for a Local Business: Registering a Delaware LLC for a local shop in California or New York, resulting in paying fees to both states.
- Ignoring FinCEN BOI Reporting: Failing to file the Beneficial Ownership Information report within 90 days of formation, risking severe federal penalties.
- Not Maintaining a Registered Agent: Letting the registered agent service expire, which can lead to the state administratively dissolving the LLC.
- Mixing Personal and Business Funds: Failing to open a dedicated business bank account, which pierces the corporate veil and destroys liability protection.
Other entity types
Other formation options in United States
Compare with Other Countries
| Country / Type | Tax | Formation | Annual |
|---|---|---|---|
| 🇺🇸 Delaware LLC(LLC) | 0.0% | $110 | $300 |
FAQ
Do I need to live in the US to form a Delaware LLC?
No, non-US residents can form a Delaware LLC without visiting the US, having a US visa, or possessing a Social Security Number (SSN).
How much is the annual fee for a Delaware LLC?
Delaware charges a flat $300 Annual Franchise Tax, which is due by June 1st every year, regardless of your business income.
Does a Delaware LLC pay state income tax?
If your LLC does not do business within the state of Delaware, it is completely exempt from Delaware state income tax.
What is the Delaware Court of Chancery?
It is a specialized business court that resolves corporate disputes using expert judges instead of juries, offering highly predictable and efficient legal outcomes.
Can I hide my identity as the owner of the LLC?
Delaware offers strong privacy; members' and managers' names are not required on the public Certificate of Formation. However, you must still report beneficial owners privately to the federal government (FinCEN).
How long does it take to form a Delaware LLC?
Standard processing typically takes 5 to 15 business days. Expedited options are available for an additional fee, which can complete the filing in 24 hours or less.
Do I need a business license in Delaware?
If your LLC does not operate physically in Delaware, you generally do not need a Delaware state business license. You only need one if you conduct business within the state.
Can a Delaware LLC be converted to a C-Corporation later?
Yes, Delaware LLCs can easily be converted to a Delaware C-Corporation (Statutory Conversion) if you decide to raise venture capital in the future.
Detailed Tax Rates
Corporate Income Tax
| From | To | Rate |
|---|
By default, a Delaware LLC is a pass-through entity and does not pay corporate income tax. If it elects to be taxed as a C-Corporation, it is subject to a flat 21% federal corporate tax rate. Delaware state corporate income tax is 8.7%, but only applies to income earned within the state.
Personal Income Tax (Top rate: 37.0%)
| From | To | Rate |
|---|---|---|
| $0 | $12,400 | 10.0% |
| $12,400 | $50,400 | 12.0% |
| $50,400 | $105,700 | 22.0% |
| $105,700 | $201,775 | 24.0% |
| $201,775 | $256,225 | 32.0% |
| $256,225 | $625,000 | 35.0% |
| $625,000 | No limit | 37.0% |
LLC profits pass through to the owners' personal tax returns. The US federal individual income tax is progressive, with a top rate of 37%. Delaware state personal income tax ranges from 0% to 6.6%, but non-residents do not pay Delaware tax on non-Delaware income.
Capital Gains Tax
20.0%
Long-term capital gains (assets held over 1 year) are taxed at 0%, 15%, or 20% depending on income. An additional 3.8% Net Investment Income Tax (NIIT) applies to high earners. Short-term gains are taxed as ordinary income.
VAT / GST
0.0%
The US does not have a federal VAT or GST. Delaware is one of the few US states with 0% state sales tax. However, if the LLC has physical or economic nexus in other US states, it may be required to collect and remit sales tax in those states.
Withholding Tax
The standard US withholding tax rate on Fixed, Determinable, Annual, or Periodical (FDAP) income for non-residents is 30%. This rate can be significantly reduced (often to 15%, 10%, or 0%) under an applicable double taxation treaty.
Payroll & Social Security
FICA taxes total 15.3% (12.4% for Social Security and 2.9% for Medicare), split equally between employer and employee at 7.65% each. Self-employed LLC owners must pay the full 15.3% self-employment tax.
Other Taxes
Delaware Annual Franchise Tax
A flat annual fee of $300 is required for all Delaware LLCs, due by June 1st each year, regardless of income or business activity.
Delaware Gross Receipts Tax
Applies only to businesses selling goods or services physically within Delaware. Rates range from 0.0945% to 0.7468% depending on the business activity.
Formation Requirements
Minimum Capital
No requirement
No minimum capital requirement. Contributions can be made in cash, property, or services.
Local Director
Not Required
Members or managers can be of any nationality and reside anywhere in the world.
Registered Office
Required
Virtual office allowed. $50 - $300 per year for a registered agent
Notarization Required
No
Power of Attorney (Remote)
Required
Not required for state formation, but a third-party designee needs authorization to apply for an EIN on your behalf.
Timeline
Standard: 5-15 business days days
Expedited: 1 business day days ($50)
Required Documents
Compliance & Reporting
Annual Filings
Audit Requirement
Not Required
No statutory audit requirement for LLCs.
Accounting Standard
US GAAP or Cash Basis
Tax Return Deadline
March 15 for multi-member LLCs (Form 1065); April 15 for single-member LLCs (Form 1040 Sch C) or C-Corp election (Form 1120).
VAT Filing Frequency
N/A
Data Protection
Subject to federal privacy laws and the Delaware Online Privacy and Protection Act (DOPPA).
Banking & Payments
Mercury
Remote-friendlyPopular fintech platform for US startups. Allows fully remote account opening for non-US residents with an EIN and formation documents.
Relay
Remote-friendlyBusiness banking platform with no account fees. Excellent for multiple accounts and team cards, supporting non-resident founders.
Wise Business
Remote-friendlyIdeal for multi-currency transactions and international wire transfers with low conversion fees.
Chase Business
Traditional top-tier US bank. Requires an in-person branch visit to open an account, making it harder for non-residents.
Payment Gateways
Stripe, PayPal, Square, Paddle, Braintree
Currency
USD
Multi-Currency: Supported
Account Opening
Opening a US business bank account is relatively straightforward for non-residents if using fintech platforms like Mercury or Relay, which only require an EIN, passport, and formation documents. However, traditional brick-and-mortar banks like Chase or Bank of America strictly require an in-person visit to a US branch.
Practical Information
Timezone
UTC-5 (EST) / UTC-4 (EDT)
Business Language
English
Legal System
Common law (Delaware General Corporation Law / LLC Act)
Ease of Doing Business
#6
IP Protection
Very strong. Intellectual property is protected at the federal level by the USPTO (patents and trademarks) and the US Copyright Office, with strict enforcement through federal courts.
Double Tax Treaties
68 countries
Notable treaties: United Kingdom, Canada, Germany, Japan, Australia, Mexico
Visa & Residency Options
E-2 Treaty Investor Visa
Allows individuals from treaty countries to enter and work in the US based on a substantial investment in a US business.
L-1 Intracompany Transferee Visa
Permits a foreign company to transfer an executive, manager, or specialized knowledge employee to its US office or to establish a new US office.
O-1 Extraordinary Ability Visa
For individuals with extraordinary ability in sciences, arts, education, business, or athletics, often used by successful startup founders.
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Changelog
Data updates and changes on this page
Verified 2026 Delaware LLC formation fees ($110) and annual franchise tax ($300). Updated compliance steps including FinCEN BOI reporting requirements.
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