The Cheapest States to Form an LLC in 2025 (Ranked by Cost)
Don't overpay. Here are the states where forming your company costs less than $50—and which ones are actually worth it.
📋 What's Covered in This Guide
1. The Bottom Line: Which State is Actually Cheapest? 💰
🏆 Absolute Winner: New Mexico
$50 filing fee + $0 annual report = The cheapest LLC in America.
Over 5 years, a New Mexico LLC costs just $50 total (excluding registered agent). No annual reports, no franchise taxes, no compliance fees.
But here's the catch: New Mexico has almost zero name recognition. If you're raising VC funding or need credibility, Wyoming or Delaware are better choices despite being more expensive.
$50
New Mexico
5-year total (champion)
$160
Wyoming
5-year total (best value)
$660
Delaware
5-year total (prestige)
$4,125
California
5-year total (avoid!)
2. Top 5 Cheapest States to Form an LLC (Full Comparison) 📊
We analyzed all 50 states and calculated the true 5-year cost of maintaining an LLC. Here are the winners:
| Rank | State | Filing Fee | Annual Report Fee | 5-Year Total | Privacy Level | Recommended? |
|---|---|---|---|---|---|---|
| 🥇 #1 | New Mexico | $50 | $0 | $50 | High (no ownership public) | ✅ Yes (best price) |
| 🥈 #2 | Missouri | $50 | $0 | $50 | Low (owners public) | ⚠️ Maybe (no privacy) |
| 🥉 #3 | Kentucky | $40 | $15 | $100 | Low (owners public) | ⚠️ Maybe (low recognition) |
| #4 | Arkansas | $45 | $150 | $645 | Low (owners public) | ❌ No (high annual fee) |
| #5 | Wyoming | $100 | $60 | $340 | High (privacy-first) | ✅ Yes (best value) |
Important Note: This table shows only state filing fees. It does NOT include registered agent costs ($100-125/year), which are required for non-residents. We'll explain those hidden costs below.
Why These States Are Cheapest
The 5 states above have:
- Low or no annual reports: Most states charge $50-300/year for annual compliance. New Mexico and Missouri charge $0.
- No franchise taxes: Unlike California ($800/year minimum) or Delaware ($300/year), these states don't tax you just for existing.
- Simple filing processes: Less bureaucracy = lower government costs passed to you.
3. #1 New Mexico: The Undisputed Champion ($50 Total) 🏆
Cost Breakdown
- 💰 Filing Fee: $50 (one-time)
- 📄 Annual Report: $0 (none required)
- 💳 Franchise Tax: $0
- 📊 5-Year Total: $50
Why New Mexico is So Cheap
New Mexico is one of the few states that doesn't require LLCs to file annual reports or pay recurring fees. Once you pay the $50 filing fee, you're done—forever (unless you voluntarily dissolve).
The Privacy Bonus
New Mexico offers anonymous ownership. Your name doesn't appear in public records—only your registered agent's address is listed. This makes it popular for:
- Real estate investors (asset protection)
- Privacy-conscious entrepreneurs
- People who don't want their business activities public
The Downsides
While New Mexico is the cheapest, it has limitations:
- Zero name recognition: If you tell investors "I have a New Mexico LLC," they'll ask why. Wyoming/Delaware carry more credibility.
- Slow processing: New Mexico takes 10-15 business days to approve LLCs (vs. Wyoming's 2-3 days).
- Less infrastructure: Fewer registered agent options, less business-friendly culture than Wyoming.
Best For:
- ✅ Budget-conscious entrepreneurs testing an idea
- ✅ Real estate investors needing cheap holding companies
- ✅ Privacy advocates who don't care about state reputation
- ✅ Non-residents who just need a legal US entity
4. #2 Missouri: Cheap But No Privacy ($50 Total) 🔓
Cost Breakdown
- 💰 Filing Fee: $50 (one-time)
- 📄 Annual Report: $0 (none required)
- 💳 Franchise Tax: $0
- 📊 5-Year Total: $50
Why Missouri Costs the Same as New Mexico
Missouri matches New Mexico's $50 filing fee and $0 annual requirements. On paper, they're equally cheap.
The Critical Difference: Privacy
Unlike New Mexico, Missouri requires you to list all LLC members' names and addresses in public records. This means:
- Anyone can see who owns your business
- Your home address may appear in public databases
- No anonymity for asset protection
Best For:
- ✅ Local Missouri businesses (if you live there)
- ✅ Entrepreneurs who don't care about privacy
- ✅ Businesses that need to show ownership publicly (for credibility)
NOT Recommended For:
- ❌ Non-residents (New Mexico or Wyoming are better)
- ❌ Privacy-conscious owners
- ❌ Real estate investors (use New Mexico or Wyoming instead)
Verdict
Missouri is cheap, but the privacy trade-off isn't worth the $0 savings over New Mexico. If you're forming an out-of-state LLC anyway, pay the same $50 in New Mexico and keep your name private.
5. #3 Kentucky: Low Start, Small Annual Fee ($100 / 5 Years) 📝
Cost Breakdown
- 💰 Filing Fee: $40 (one-time)
- 📄 Annual Report: $15/year
- 💳 Franchise Tax: $0
- 📊 5-Year Total: $100 ($40 + $15×4)
Why Kentucky Makes the Top 5
Kentucky has the lowest filing fee in America ($40), and its $15 annual report is negligible. Over 5 years, you'll spend just $100—double New Mexico's cost but still incredibly cheap.
The Downsides
- No privacy: Owner names are public (like Missouri)
- Low recognition: "Kentucky LLC" doesn't impress investors or clients
- Limited infrastructure: Fewer registered agent options than Wyoming/Delaware
Best For:
- ✅ Kentucky residents (local businesses)
- ✅ Micro-businesses testing an idea (e.g., eBay resellers, Etsy shops)
- ✅ Non-profits on tight budgets
NOT Recommended For:
- ❌ E-commerce or SaaS companies (use Wyoming/Delaware)
- ❌ International entrepreneurs (New Mexico/Wyoming have better non-resident support)
- ❌ Anyone seeking credibility (Kentucky LLCs look "budget")
Verdict
Kentucky is only worth it if you live there. For non-residents, the $50 savings over Wyoming ($100 vs $160 over 5 years) isn't worth sacrificing privacy, credibility, and infrastructure.
6. #4 Wyoming: Not the Cheapest, But the Best Value ($340 / 5 Years) ⭐
Cost Breakdown
- 💰 Filing Fee: $100 (one-time)
- 📄 Annual Report: $60/year (includes registered agent fee to state)
- 💳 Franchise Tax: $0
- 📊 5-Year Total: $340 ($100 + $60×4)
Why Wyoming Costs More (And Why It's Worth It)
Wyoming isn't the cheapest state—it's 7× more expensive than New Mexico over 5 years ($340 vs $50). But here's what you get for that extra $290:
🔒 Industry-Leading Privacy
Wyoming was the first state to allow anonymous LLCs (since 1977). Your name never appears in public records—only your registered agent's address.
🛡️ Strong Legal Protections
Wyoming has the best charging order protection in the US. If you're sued personally, creditors can't seize your LLC's assets (unlike most states).
🚀 Fast Processing
Wyoming approves LLCs in 2-3 business days (vs. New Mexico's 10-15 days). Need it faster? Pay $100 for same-day filing.
💼 Credibility & Recognition
"Wyoming LLC" is recognized globally as a premium jurisdiction. Investors, banks, and clients see it as legitimate (unlike Kentucky or Missouri).
Wyoming vs New Mexico: The Trade-Off
| Factor | New Mexico | Wyoming |
|---|---|---|
| 5-Year Cost | $50 | $340 |
| Privacy | High | High |
| Processing Time | 10-15 days | 2-3 days |
| Credibility | Low | High |
| Legal Protections | Standard | Best-in-class |
| Non-Resident Support | Limited | Excellent |
Best For:
- ✅ Non-US residents (best infrastructure for international founders)
- ✅ E-commerce and SaaS businesses (credibility matters)
- ✅ Privacy-conscious entrepreneurs (anonymous ownership)
- ✅ Real estate investors (best asset protection)
- ✅ Long-term businesses (worth the extra $58/year)
Verdict: Best Value, Not Cheapest
Wyoming costs $290 more than New Mexico over 5 years—but you get faster processing, better credibility, stronger legal protections, and world-class infrastructure.
If you're serious about your business (not just testing an idea), Wyoming's extra $58/year is the best investment you can make.
8. Cheapest vs Best Value: Is Saving $290 Worth It? 🤔
Let's be honest: Wyoming costs $290 more than New Mexico over 5 years. That's real money. But here's the question every entrepreneur should ask:
"Would I pay $58/year extra for better credibility, faster processing, and stronger legal protection?"
The Math: $58/Year = $4.83/Month
Wyoming's premium breaks down to:
- $58/year extra vs New Mexico
- $4.83/month
- 16¢ per day
That's less than a cup of coffee. The question becomes: What does that 16¢/day buy you?
What Wyoming's $58/Year Premium Gets You
⚡ 5× Faster Processing
Wyoming: 2-3 days
New Mexico: 10-15 days
If you need to open a bank account or start accepting payments, 2 weeks matters.
💼 Professional Credibility
Telling a client "I have a Wyoming LLC" sounds legitimate. "I have a New Mexico LLC" raises eyebrows.
Worth it if you're B2B, consulting, or SaaS.
🛡️ Best Asset Protection in US
Wyoming's charging order protection is the strongest in America. If you're sued, creditors can't touch your LLC.
Critical for real estate investors and high-risk businesses.
🌍 Better Non-Resident Support
More registered agents, better banking options (Mercury, Relay), and a proven track record with international founders.
When New Mexico Actually Makes Sense
New Mexico is the right choice if:
- ✅ You're testing a side hustle (not a serious business yet)
- ✅ You need multiple holding LLCs for real estate (cost adds up)
- ✅ You don't care about credibility (e.g., anonymous real estate holdings)
- ✅ You're bootstrapping and every $50 matters right now
When Wyoming's Extra Cost is Worth It
- ✅ You're building a real business (not testing)
- ✅ You'll pitch clients or investors (credibility matters)
- ✅ You're a non-resident (better infrastructure)
- ✅ You value privacy AND protection (not just one)
- ✅ You plan to keep the LLC 5+ years (long-term value)
The Verdict
If you're here reading this guide, you're probably serious enough about your business to justify Wyoming's extra $58/year.
New Mexico is genuinely the cheapest—but Wyoming is the smartest choice for 80% of non-resident entrepreneurs.
9. Special Considerations for Non-US Residents 🌍
Do Costs Change If You Live Outside the US?
No. State filing fees are the same whether you live in Buenos Aires, Berlin, or Boston. A Wyoming LLC costs $100 for everyone.
But You MUST Pay for a Registered Agent
If you don't live in the US, you can't use your home address as the registered agent. You're legally required to hire a service like:
- Northwest Registered Agent: $125/year (our #1 recommendation)
- Bizee: $0 first year, then $119/year
- ZenBusiness: $0 first year, then $199/year
See Full Registered Agent Comparison →
Real 5-Year Costs for Non-Residents
| State | State Fees | Registered Agent | Total 5-Year Cost |
|---|---|---|---|
| New Mexico | $50 | $625 | $675 |
| Wyoming | $340 | $625 | $965 |
| Delaware | $660 | $625 | $1,285 |
Best States for Non-Residents (Ranked)
- Wyoming — Best infrastructure, credibility, and support for international founders
- New Mexico — Cheapest option if you're on a tight budget
- Delaware — Only if you're raising VC funding (extra credibility with investors)
- Florida — Good for Latin American entrepreneurs (Miami connection)
Banking Matters More Than State Choice
For non-residents, getting a US bank account is harder than forming the LLC. Mercury, Relay, and Wise accept all states—but Wyoming/Delaware applications get approved faster.
10. Frequently Asked Questions (FAQ) ❓
What is the absolute cheapest state to form an LLC?
New Mexico ($50 total over 5 years). $50 filing fee + $0 annual reports = unbeatable. Missouri ties at $50, but New Mexico offers better privacy.
Can I change my LLC to a cheaper state later?
Not directly. You'd need to dissolve your current LLC and form a new one in the cheaper state. This costs $50-100+ in dissolution fees, plus you lose your formation date (matters for credibility). Choose wisely from the start.
Does state choice matter if my business is 100% online?
Yes and no. If you're doing e-commerce, consulting, or SaaS, you can operate from any state. But: Your state affects your credibility, privacy, and legal protection. Wyoming/Delaware carry more weight than Missouri/Kentucky.
Is Wyoming really worth the extra cost over New Mexico?
If you're serious about your business, yes. Wyoming costs $290 more over 5 years ($58/year), but you get faster processing, better credibility, stronger asset protection, and superior non-resident infrastructure. Worth it for 80% of entrepreneurs.
Should I avoid expensive states like California or Delaware?
California: Avoid at all costs unless you physically operate there. $800/year franchise tax is brutal.
Delaware: Only worth it if you're raising VC funding. Otherwise, Wyoming is better and 50% cheaper.
What about "free" LLC formation services like ZenBusiness?
ZenBusiness offers $0 LLC formation, but they charge $199/year for registered agent renewals. Over 5 years, you'll pay $796 (vs. Northwest's $625). Read our ZenBusiness review for details.
Do I need a registered agent if I live outside the US?
Yes, it's legally required. Every LLC needs a physical US address to receive legal documents. Services like Northwest ($125/year) handle this for non-residents. Factor this into your budget when comparing state costs.
Can non-residents form LLCs in cheap states like New Mexico?
Yes, 100%. All states accept non-resident LLC owners. You just need an EIN (no SSN required) and a registered agent with a US address. See our full non-resident guide.
11. Final Verdict: Which Cheap State Should You Choose? 🏁
The Smart Choice Depends on Your Goal
🏆 Choose New Mexico If:
- You want $0 annual maintenance (literally $50 total for 5 years)
- You need multiple holding LLCs (real estate investors—costs add up)
- You value privacy over credibility (anonymous ownership)
- You're testing a side hustle (not a serious business yet)
- Every dollar matters right now (bootstrapping)
⭐ Choose Wyoming If:
- You're building a real business (not just testing)
- You're a non-US resident (best infrastructure for international founders)
- You value credibility ("Wyoming LLC" impresses clients/investors)
- You need fast processing (2-3 days vs. New Mexico's 10-15)
- You want best-in-class asset protection (strongest in America)
- $58/year extra is acceptable (16¢/day for better service)
💼 Choose Delaware If:
- You're raising VC funding (Delaware C-Corp is standard)
- You're building a high-growth startup (prestige matters to investors)
- You plan to IPO eventually (65% of Fortune 500 are Delaware corps)
❌ States to Avoid
- California: $800/year franchise tax (even for $0 revenue). Only form here if you physically operate there.
- Nevada: Marketed as "tax-free" but costs $650+ over 5 years. Wyoming is cheaper and better.
- Missouri/Kentucky: Cheap ($50-100 over 5 years) but no privacy. New Mexico is same price with anonymity.
The Bottom Line
If you're reading this guide, you probably care enough about your business to spend an extra $58/year for better service. Wyoming is the sweet spot: not the cheapest, but the best value for 80% of non-resident entrepreneurs.
But if you're truly bootstrapping and need to save every dollar, New Mexico at $50 total is unbeatable. Just know you're trading credibility and speed for cost savings.