Delaware LLC vs. Wyoming LLC (Holding Company)

Delaware LLC vs. Wyoming LLC (Holding Company). If you are setting up holding companies, there are two states that are always mentioned: Delaware and Wyoming. So let's compare the two. In Delaware, the filing fee is $110 and it usually takes about 3-5 business days to get approved. You do get anonymity, which is great for anyone who wants privacy of ownership. Delaware does have a $300 franchise tax that's due every year, regardless if your company made any money. However, that doesn't seem so bad considering the charging order protection you get, which helps keep your personal creditors from seizing your LLC assets. Corporations really love Delaware because of the Court of Chancery that was established in the 1800s. It's a very sophisticated court system. Delaware does have a gross receipts tax, but as a holding company with no in-state sales, that generally won't affect you. Same with their state income tax. If you don't live in Delaware and your company doesn't earn any money in Delaware, you are generally not subject to income taxes. Now, let's take a look at Wyoming. Filing is cheaper by $10, so about $100. Approval is quicker, you get same-day approval, and you still get anonymity, no public listing of owners. And there's no franchise tax, just a $60 annual report fee. You also get charging order protection just like in Delaware. Wyoming does have a Court of Chancery, but it's recently established, 2019 to be exact, so it's not as sophisticated as Delaware. But hey, on the bright side, there's no state income tax at all. However, they do have a sales tax, but again, as a holding company, you're not selling anything, so it's irrelevant. So, if you're forming a holding company and you're not actually living or doing business in these states, Wyoming usually comes out on top: lower annual cost, no income tax, and same level of protection and privacy as Delaware.