Type this question into a search engine and the answers are remarkably consistent: Wyoming, Delaware, Nevada, sometimes New Mexico, each pitched as the smart founder's choice. Most of those pages are written by companies that earn a fee when you form there. We are an affiliate site too, and we say so, but our recommendation runs the other way for almost everyone, and the reason is arithmetic rather than opinion. We maintain the verified formation and recurring fees for every state, checked against each state's official source and dated, which means this page can show you the actual five-year bill for any choice instead of asking you to trust an adjective.
Two ideas do most of the work. First, an LLC that does business in a state has to register there whether or not it was formed there, so an out-of-state formation is an addition to your home state's fees, not a replacement for them. Second, the recurring fee matters more than the formation fee, because you pay it every year for as long as the company exists. A state that is cheap to enter and expensive to stay in is expensive.
The rule that settles it for most people
Every state requires a company that transacts business within its borders to register as a foreign LLC, and that registration carries its own fee and its own annual obligations. Texas charges $750 to register an out-of-state LLC, two and a half times its own $300 formation fee, and adds a late fee equal to the full registration fee for every year a company operated unregistered. California charges its $70 plus the $800 annual franchise tax to any LLC doing business there, wherever it was formed; the $800 follows the activity, not the paperwork. So a Wyoming LLC run from Austin pays Wyoming's fees, Texas's $750 registration, and needs a registered agent in both states, to end up exactly as exposed to Texas law as a plain Texas LLC would be.
The privacy argument deserves the same treatment. Wyoming and New Mexico genuinely keep member names off the formation record, and that is worth something for a passive holding company. It is worth very little for an operating business, because a foreign registration, a state tax account, a business licence, a lease and a bank account each attach your name to the company in your home state anyway. The record you were hiding from is not the one people look at.
The cheapest states over five years, from the verified dataset
Ranked by total state fees across the first five years for an owner acting as their own registered agent, so the number is the state's bill alone. Every figure comes from our 51-jurisdiction fee table, last fully audited 2026-09-01, and the same numbers drive our Fee Change Wire.
| State | To form | Recurring state fee | 5 years, own agent | 5 years, with a $125/yr service |
|---|---|---|---|---|
| Montana | $35 | Annual Report (fee waived through 2027) | $35 | $660 |
| Arizona | $50 | None — no annual report for LLCs | $50 | $675 |
| Mississippi | $50 | Annual Report (free for domestic) | $50 | $675 |
| Missouri | $50 | None — no annual report | $50 | $675 |
| New Mexico | $50 | None — no annual report | $50 | $675 |
| Ohio | $99 | None — no annual report | $99 | $724 |
| Idaho | $100 | Annual Report (free) | $100 | $725 |
| Iowa | $50 | $30 every 2 years — Biennial Report | $110 | $735 |
Notice what is not on that list. Wyoming, at $400 over five years, is a perfectly reasonable state and nowhere near the cheapest; Delaware and Nevada do not appear because they are among the most expensive. The states that are actually cheap to own an LLC in are the ones with no recurring fee, and there are 11 of them: Alabama, Arizona, Idaho, Minnesota, Mississippi, Missouri, Montana, New Mexico, Ohio, South Carolina, Texas. Ohio is the standout for a large state: $99 once, then nothing, for a state with the eighth-largest economy in the country.
The most expensive states, and why two of them are famous
| State | To form | Recurring state fee | 5 years, own agent | 5 years, with a $125/yr service |
|---|---|---|---|---|
| California | $70 | $800/yr — Annual Franchise Tax ($800 minimum) | $4,070 | $4,695 |
| Massachusetts | $500 | $500/yr — Annual Report | $3,000 | $3,625 |
| Nevada | $425 | $350/yr — Annual List + State Business License | $2,175 | $2,800 |
| Delaware | $110 | $400/yr — Annual Tax (flat) | $2,110 | $2,735 |
| Tennessee | $300 | $300/yr — Annual Report (minimum) | $1,800 | $2,425 |
California is expensive for a well-known reason, an $800 minimum franchise tax owed even at a loss, and no formation strategy avoids it for a business that operates there. Massachusetts charges $500 a year to exist. But the two that should give you pause are Delaware and Nevada, the states most often recommended as clever choices. Delaware's flat annual tax rose to $400 under House Bill 400 in 2026, and Nevada's annual list plus state business licence runs $350 a year on top of the most expensive formation bundle in the country. Their reputations were built for venture-backed corporations and casino-era asset protection respectively; a one-person consulting LLC gets the bill without the benefit.
The four hub states, priced honestly
These are the states people mean when they ask this question, so here is what each actually costs and who it genuinely suits. The full second-bill tables, showing home-state cost versus hub plus home registration, are on each state's guide.
| State | To form | Recurring state fee | 5 years, own agent | 5 years, with a $125/yr service |
|---|---|---|---|---|
| Wyoming | $100 | $60/yr — Annual Report License Tax (minimum) | $400 | $1,025 |
| Delaware | $110 | $400/yr — Annual Tax (flat) | $2,110 | $2,735 |
| New Mexico | $50 | None — no annual report | $50 | $675 |
| Nevada | $425 | $350/yr — Annual List + State Business License | $2,175 | $2,800 |
New Mexico is the one hub state that is also cheap: $50 to form, no annual report, and no member names on the public record. For a non-resident founder or a passive holding LLC it is the strongest value in the country, and the registered agent becomes the only recurring cost, which is why we compare the local agents on our New Mexico guide. Wyoming costs more, $400 over five years against New Mexico's $50, in exchange for stronger charging-order protection and the most established privacy industry of the four; it is the sensible choice for a holding company that expects to be litigated against. Delaware earns its price only for companies that will raise institutional money or want the Court of Chancery, and its $400 annual tax makes it a poor choice for anyone else. Nevada is hard to justify for a small LLC at all: the most expensive to form, $350 a year to keep, and its privacy is narrower than the marketing implies.
When a hub state is genuinely the right answer
Three situations, and the arithmetic changes in each because there is no home state to register back into. A non-US resident with no US office, staff or property has no home state; the formation state is the only state, and New Mexico or Wyoming is a clean choice. A holding company that owns real estate, intellectual property or shares in other companies, and does not trade, may never need to register elsewhere; Wyoming's charging-order protection is designed for exactly this. A business operating in several states will register as a foreign LLC in each of them regardless, so its formation state is a free choice, and a cheap, private, well-run one is worth picking deliberately.
If you are none of those, the honest answer is your own state, and the useful question becomes what it costs there. Our calculator gives the first-year and five-year total for any state, and the per-state cost pages, starting with Texas, California and Florida, carry every ancillary fee from the official schedule.
What the fee tables leave out
Two things move the real answer more than the state fees do. Taxes follow activity. A pass-through LLC's profit is taxed where the owner lives and where the work happens; forming in a no-income-tax state does not move a California resident's income out of California. Our sales-tax nexus table covers the parallel rule for selling into other states. The registered agent line is public everywhere. Whichever state you choose, the agent address on the formation document is on that state's public record. If it is your home address, that is the privacy decision that actually matters, and it is the same decision in Ohio as in Wyoming.
How this page was built
Every cost in the tables above is computed from our verified fee dataset for all 50 states and DC, in which each figure is checked against the state's official fee schedule and dated. The tables regenerate from that data, so they change when a state's fee changes rather than when someone remembers to edit the page. Recurring taxes that scale with revenue are shown at their minimum, one-off extras such as New York's publication requirement are excluded, and the service column assumes a typical registered-agent service at $125 a year. The full table and a CSV are free on the calculator page.