Cost of LLC Formation in USA

Which State is the Most Favorable for Company Formation? (Wyoming vs Delaware vs Florida 2025 Comparison)

Starting a business in America is a great opportunity, especially for foreign-based entrepreneurs. However, one of the most important decision points in this process is which state to incorporate your company in. This decision affects many critical aspects such as taxes, legal obligations, level of privacy and compatibility with platforms. In this comprehensive guide, we have analyzed the states of Wyoming, Delaware and Florida in detail for those who want to open a non-resident LLC company. We evaluate the important advantages and disadvantages, especially for entrepreneurs who want to sell on Amazon FBA, Shopify and other digital platforms.

Why Do These Three States Stand Out?

The main reason for highlighting Wyoming, Delaware and Florida in this article, besides their popularity, especially for foreign entrepreneurs, is that they have zero state income tax. All three of these states do not charge State Income Tax. This is a common misunderstanding: While there is no state income tax, tax returns are mandatory at the federal level and reporting to the IRS is required. Also, states have different policies regarding sales tax.

Amazon vs Shopify - Sales Tax Liability

- Amazon FBA: Under the Marketplace Facilitator law, Amazon automatically collects sales tax for most states and reports it to the relevant state tax authorities on its behalf. This means that sellers using Amazon FBA generally do not have to collect or pay sales tax manually. However, some states may still require a sales tax permit from the seller and may only require zero reporting.

- Shopify: Shopify is not a marketplace facilitator. Therefore, the collection and declaration of sales tax is the sole responsibility of the seller. For each state where Nexus occurs, tax registration must be done, sales tax must be collected from the buyer in Shopify, and sales tax must be manually declared and paid to the relevant state's system.

For Amazon sales, Amazon usually collects the sales tax. On Shopify, the entire obligation lies directly with the seller.

1. The State of Wyoming: The Most Economical Option for Foreign Entrepreneurs to Incorporate in USA

Advantages:

- 0% state income tax and no franchise tax

- Annual report fee only 60 USD

- Ownership secrecy is high (member names are not publicly available)

- Fast deployment, low cost

Disadvantages:

- Foreign entity registration may also be required if your physical operation will be in another state

- Some financial institutions may distance Wyoming from bank account opening

Formation + Annual Expenses:

- Formation: ~300-350 USD

- Registered agent service: USD 50-100/year

- Total first year cost: ~400-450 USD

Sales Tax Status:

Wyoming has a low state-level sales tax. However, if you use Amazon FBA, then Amazon collects the tax. For Shopify, only if the sale is to Wyoming and nexus is established there, then the seller has to collect and declare directly.

2. Delaware: Corporate Legal Strength and Investor-Friendly Infrastructure for Company Start-ups in the United States

Advantages:

- The state with the most advanced corporate law infrastructure in the US

- A separate commercial court specializing in company disputes (Chancery Court)

- Investors tend to favor Delaware-based companies, especially in technology companies

Disadvantages:

- Annual franchise tax: USD 300 (fixed)

- Ownership secrecy is lower than in Wyoming

- Formation costs are higher than in Wyoming

Formation + Annual Expenses:

- Formation: ~350-450 USD

- Registered agent service: USD 100-150/year

- Franchise Tax: 300 USD/year

- Total first year cost: ~750-900 USD

Sales Tax Status:

Delaware does not have a state-level sales tax. For Amazon sales, Amazon already collects the tax. For Shopify, only if there is nexus in states other than Delaware can tax liability arise in those states.

3rd State of Florida: Infrastructure Support for Those Planning Physical Operations

Advantages:

- For those planning a physical presence in the US, such as offices, warehouses and showrooms, access to real estate, logistics and human resources is easy.

- It is more practical to set up physical infrastructure due to the wide network of services it offers (e.g. supply chains such as Office Depot, proximity to Amazon FBA warehouse, local virtual office providers)

- Logistically advantageous for those who want to live or frequent the U.S.

Disadvantages:

- Annual report fee: USD 138.75

- Ownership information is publicly available (low confidentiality)

- Sales tax is applied on a state-by-state basis

Formation + Annual Expenses:

- Formation: ~300-400 USD

- Registered agent service: USD 50-100/year

- Annual report and other expenses: USD 138.75

- Total first year cost: ~500-600 USD

Sales Tax Status:

Florida has a sales tax of 6% at the state level and up to 7.5% in some counties. Amazon FBA Amazon collects this tax. However, if Shopify has nexus in Florida, then the seller must collect this tax and declare it manually.

Which State is Right for You?

Which state to choose and when?

- For those who will only do e-commerce (Amazon, Shopify), not planning a physical presence during the US company incorporation process: Wyoming is the most economical and simple solution.

- For those seeking brand growth, investment or exit: Delaware is favored for its strong legal infrastructure and investor perception.

- For those opening a physical operation, warehouse or showroom in the US: Florida is the most practical and infrastructure-friendly state.

USA Company Formation with Export Partners

As Export Partners Turkey, we offer end-to-end consulting services for foreign-based entrepreneurs, including LLC formation in the US, obtaining EIN, bank account opening, Amazon and Shopify approval processes.

Together we can determine which state is suitable for your business model and complete the company incorporation within 48 hours.

Contact us for a consultation.