What Is the Cheapest State to Form an LLC in 2026?
Kentucky is the cheapest state to form an LLC with a $40 filing fee and a $15 annual report fee — the lowest upfront cost in the USA.
New Mexico is the cheapest state for long-term LLC ownership: it charges a $50 filing fee and has $0 in annual fees with no annual report required.
For non-residents and remote sellers, Wyoming is the most recommended state due to its strong privacy laws and asset protection, despite a slightly higher cost of $100 to file and $60 per year.
Don’t have time to read the full 50-state analysis? Here is the cheat sheet:
Finding the cheapest state to form an LLC in the USA is the first strategic move for any entrepreneur looking to sell on Amazon, run a freelance business, operate a call center, or launch a Shopify store. But “cheap” can be dangerously misleading.
Arkansas, for example, lures you in with a low $45 filing fee, only to hit you with a mandatory $150 franchise tax every single year. California looks manageable until you realize there is an $800 minimum annual tax regardless of revenue.
To prevent you from falling into these traps, we analyzed the 2026 fee structures from all 50 Secretary of State databases and ranked every state by Total First-Year Cost (filing fee + annual report fee), giving you the true financial picture.
🎯 Which State Is Right for Your Situation?
The right state depends on your specific use case. Here is the fastest way to find your answer:
🛒 Non-Resident Amazon/E-Commerce Seller
You live outside the US and sell online. Privacy and asset protection matter.
→ Recommended: Wyoming💻 Freelancer / Remote Worker
You want the lowest possible cost to legitimize your income and open a US bank account.
→ Recommended: New Mexico📦 Small US-Based Business Owner
You operate in a specific state and need to register where you do business.
→ Recommended: Your home state🚀 Startup Seeking VC Funding
You plan to raise venture capital and need investor-friendly legal structure.
→ Recommended: Delaware💰 Absolute Minimum Budget
You need to get incorporated today for the lowest possible fee.
→ Recommended: Kentucky ($40)🌐 Indian Diaspora / Oceania Seller
You live in Australia or New Zealand and sell to US customers.
→ Recommended: New Mexico or Wyoming🏆 The 2026 Top Picks by Category
New Mexico — Best for Zero Maintenance
- Filing Fee: $50
- Annual Fee: $0
- Annual Report: Not required
- Anonymous Ownership: Yes
New Mexico is the only state combining a low startup fee with zero annual fees and no reporting requirements. It is the cheapest long-term LLC option in the USA.
Wyoming — Best for Privacy & E-Commerce
- Filing Fee: $100
- Annual Fee: $60
- Asset Protection: Strongest in the US
- Privacy: Members not public record
Wyoming offers the strongest asset protection laws in the country and is the industry standard for non-resident Amazon FBA and Shopify sellers.
Read the Wyoming Guide →Kentucky — Lowest Upfront Filing Cost
- Filing Fee: $40
- Annual Fee: $15
- Total Year 1: $55
- Annual Report: Simple online filing
If your priority is spending the absolute minimum today to get your Articles of Organization filed, Kentucky is the current price leader in the USA at just $40.
📊 5-Year Total Cost Comparison (Top States)
The filing fee is only the beginning. Here is what you will actually spend over five years in the most popular low-cost states:
| State | Year 1 Cost | Annual Fee | 5-Year Total | Best For |
|---|---|---|---|---|
| 🏆 New Mexico | $50 | $0 | $50 | Freelancers, remote workers, long-term savings |
| Kentucky | $55 | $15 | $115 | Lowest upfront cost |
| Missouri | $50 | $0 | $50 | Zero annual fees alternative to NM |
| Colorado | $60 | $10 | $100 | Fast filing, very low maintenance |
| Wyoming | $160 | $60 | $400 | Privacy, asset protection, e-commerce |
| Texas | $300 | $0* | $300* | US-based businesses under $1.23M revenue |
| ❌ California | $870 | $800+ | $3,870+ | Avoid unless you operate in California |
| ❌ Massachusetts | $1,000 | $500 | $3,000 | Avoid for remote or non-resident businesses |
*Texas franchise tax only applies if annual revenue exceeds $1.23 million.
⚠️ 5 States to Avoid When Forming an LLC
These states appear affordable but have significant hidden costs that make them expensive over time:
- California — $800 minimum annual franchise tax regardless of profit or revenue. Avoid if you do not physically operate there.
- New York — A mandatory “publication requirement” forces new LLCs to publish a notice in two local newspapers, costing $500–$1,500+ depending on the county.
- Massachusetts — $500 to file and $500 every year. One of the most expensive states to maintain an LLC.
- Nevada — Often marketed as a “tax haven” but charges $425 to file and $350 annually, making it one of the most expensive options with fewer benefits than Wyoming.
- Tennessee — A minimum franchise tax of $100 applies every year even if your LLC earns zero revenue.
🇺🇸 All 50 States: LLC Cost Ranking (Verified 2026 Data)
This table is sorted by lowest initial filing fee. Pay close attention to the Annual Fee and Notes columns to avoid expensive surprises. Data is sourced directly from each state’s Secretary of State database and verified for 2026.
| # | State | Filing Fee | Annual Fee | Notes & Hidden Costs |
|---|---|---|---|---|
| 1 | Kentucky | $40 | $15 | Lowest Upfront Simple annual report. Best for minimum spend today. |
| 2 | Arkansas | $45 | $150 | Tax Trap Mandatory franchise tax makes it expensive annually. |
| 3 | New Mexico | $50 | $0 | Best Long-Term No annual report. Anonymous ownership allowed. |
| 4 | Missouri | $50 | $0 | Hidden Gem No annual report. Underrated zero-fee state. |
| 5 | Mississippi | $50 | $0 | Annual report required but fee is $0. |
| 6 | Colorado | $50 | $10 | Very fast online filing system. Low maintenance cost. |
| 7 | Hawaii | $50 | $15 | Isolated banking infrastructure. Fine for online businesses. |
| 8 | Michigan | $50 | $25 | Standard annual fee. Straightforward process. |
| 9 | Iowa | $50 | $45 | Biennial report (every 2 years, not annual). |
| 10 | Arizona | $50 | $0 | Hidden Cost Newspaper publication notice required: ~$150+. |
| 11 | Utah | $54 | $18 | Small annual renewal fee. Straightforward filing. |
| 12 | California | $70 | $800+ | Avoid $800 minimum annual franchise tax regardless of revenue. |
| 13 | Montana | $70 | $20 | Low maintenance costs. No sales tax. |
| 14 | Delaware | $90 | $300 | Best for VC-backed startups. Expensive for small businesses. |
| 15 | Indiana | $95 | $30 | Biennial report ($30 every 2 years, not annually). |
| 16 | Ohio | $99 | $0 | No annual report or annual fee required. |
| 17 | Wyoming | $100 | $60 | Best Privacy Strongest asset protection. Ideal for non-residents and e-commerce. |
| 18 | Georgia | $100 | $50 | Simple annual registration. Good banking infrastructure. |
| 19 | Idaho | $100 | $0 | Annual report required but filing fee is $0. |
| 20 | Oregon | $100 | $100 | Flat fees across the board. Predictable costs. |
| 21 | Virginia | $100 | $50 | Annual registration fee. Strong business ecosystem. |
| 22 | Louisiana | $100 | $35 | Low annual fee. Online filing available. |
| 23 | Maryland | $100 | $300 | Personal Property Return required annually. Expensive to maintain. |
| 24 | Oklahoma | $100 | $25 | Annual certificate fee. Straightforward process. |
| 25 | W. Virginia | $100 | $25 | Annual report due July 1. |
| 26 | South Carolina | $110 | $0 | No annual report required unless taxed as S-Corp. |
| 27 | Nebraska | $105 | $10 | Publication Newspaper notice required (~$100–$200 extra). |
| 28 | Florida | $125 | $138 | Strict Penalties $400 late fee if annual report missed. |
| 29 | N. Carolina | $125 | $200 | Annual report fee is high. Less competitive than neighboring states. |
| 30 | Pennsylvania | $125 | $70 | Decennial filing (every 10 years) rather than annual. |
| 31 | New Jersey | $125 | $75 | Annual report fee. Straightforward process. |
| 32 | Vermont | $125 | $35 | Annual report fee. Smaller business community. |
| 33 | Connecticut | $120 | $80 | Annual report due March 31. |
| 34 | North Dakota | $135 | $50 | Annual report due November 15. |
| 35 | Wisconsin | $130 | $25 | Annual report fee. Reasonable maintenance cost. |
| 36 | Rhode Island | $150 | $50 | Annual report fee. |
| 37 | Illinois | $150 | $75 | Annual report fee. |
| 38 | South Dakota | $150 | $50 | No state income tax. Decent privacy laws. |
| 39 | Kansas | $160 | $50 | Annual report fee. |
| 40 | Maine | $175 | $85 | Annual report fee. Expensive for a small state. |
| 41 | New Hampshire | $100 | $100 | Annual report fee matches filing fee. |
| 42 | Washington | $200 | $60 | Initial fee varies ($180–$200). B&O tax may apply. |
| 43 | Alabama | $200 | $100+ | Privilege tax minimum of $100 annually. |
| 44 | New York | $200 | $9 | Avoid Mandatory publication in two newspapers: $500–$1,500+ cost. |
| 45 | Alaska | $250 | $100 | Biennial report ($100 every 2 years). |
| 46 | Texas | $300 | $0* | Franchise tax only if revenue exceeds $1.23M/year. |
| 47 | Tennessee | $300 | $300 | Minimum franchise tax applies annually. |
| 48 | Nevada | $425 | $350 | Avoid Often oversold as tax haven. Far more expensive than Wyoming. |
| 49 | Massachusetts | $500 | $500 | Avoid Most expensive state to maintain an LLC long-term. |
| 50 | D.C. | $99 | $300 | Biennial report ($300). High ongoing cost. |
Frequently Asked Questions
What is the cheapest state to form an LLC in the USA in 2026?
Kentucky is the cheapest state to form an LLC in 2026 with a $40 filing fee and a $15 annual report fee — the lowest upfront cost in the country. For long-term ownership, New Mexico is the best value because it charges $50 to file and has $0 in annual fees with no annual report required, meaning after the first year you pay nothing.
Which states have $0 annual LLC fees?
Seven states have $0 annual report fees for LLCs: New Mexico, Missouri, Mississippi, Arizona, Idaho, Ohio, and South Carolina. Among these, New Mexico and Missouri are the safest choices because they have no hidden publication costs. Arizona requires a newspaper publication notice that can cost $150 or more.
What is the cheapest state to form an LLC as a non-US resident or foreigner?
New Mexico and Wyoming are the two best states for non-US residents forming an LLC. New Mexico offers the lowest long-term cost at $50 to file and $0 in annual fees. Wyoming costs more ($100 filing, $60 annual) but provides stronger asset protection and privacy, making it the preferred choice for non-residents running Amazon FBA or Shopify businesses. Both states can be registered entirely online without visiting the US.
Do I need to visit the United States to open an LLC?
No. You do not need to visit the United States to form an LLC. The entire process can be completed online. You will need to: (1) hire a Registered Agent service in the state of formation to receive legal mail, (2) file your Articles of Organization through the state’s online portal, (3) obtain an EIN from the IRS using Form SS-4, and (4) open a US business bank account through a fintech provider such as Mercury, Relay, or Wise.
Why is Wyoming recommended for non-residents over New Mexico?
Wyoming is preferred over New Mexico for non-residents who sell products or run active businesses because Wyoming has the strongest LLC asset protection laws in the United States, charging order protection that shields your LLC assets from personal creditors, and LLC members are not listed in public records. New Mexico is cheaper overall but Wyoming provides greater legal protection for active commercial operations, making the additional $110/year a worthwhile investment for most e-commerce sellers.
Why is Delaware popular for LLCs if it is expensive?
Delaware is popular specifically for startups seeking Venture Capital (VC) funding, not for small businesses or solo operators. Delaware’s Court of Chancery is the most sophisticated business court in the US, and most VC investors and term sheets require a Delaware C-Corp or LLC. For a regular small business, freelancer, or remote seller, Delaware is a poor choice because the $90 filing fee and $300 annual franchise tax are unnecessary expenses with no practical benefit.
Is Texas a good state to form an LLC?
Texas is a good option for LLCs if your business is based in Texas or has significant operations there. The $300 filing fee is among the highest, but there is no annual report fee. A franchise tax only applies when annual revenue exceeds roughly $1.23 million. For non-residents or online businesses without Texas ties, New Mexico or Wyoming are more cost-effective. See our Texas LLC Formation Guide for the complete breakdown.
What is the difference between a filing fee and an annual report fee?
A filing fee is the one-time cost to register your LLC with the state. You pay this once when forming your LLC. An annual report fee (also called an annual renewal fee or franchise tax in some states) is a recurring yearly charge to keep your LLC in good standing with the state. When comparing LLC costs, always look at both: a state with a $50 filing fee but $200 annual fee is far more expensive over time than one with a $100 filing fee and $0 annual fee.
🚀 Ready to Form Your LLC? Start Here
Now that you have compared all 50 states, use our step-by-step guides to complete your formation:
7 Comments
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Great breakdown! I was just about to file in Arkansas because of that $45 fee. You saved me from a $150/year nightmare. Looks like New Mexico is the real winner here. Is the process for setting up an NM LLC as a non-resident really that straightforward?
Great question! We’re glad the article could help you avoid that trap—the Arkansas “tax trap” is exactly why we created this ranking. And yes, for non-residents, New Mexico is incredibly straightforward.
This is a huge help for someone outside the US like me. I’ve been told Delaware is the only way to go, but that $300 annual franchise tax is steep. The table shows Wyoming at $100 filing / $60 annual. For an Amazon FBA seller based in Europe, which is the smarter pick for long-term savings?
Wyoming beats Delaware for most international Amazon sellers.
Lower cost ($60/yr vs $300/yr), stronger asset protection, better privacy with anonymous ownership, and no complexity. Delaware’s Court of Chancery only matters if you’re raising venture capital — irrelevant for e-commerce.
Excellent post. I’m a freelance consultant and value my privacy. The article mentions Wyoming is best for privacy, but I see New Mexico also offers anonymity. Which one is actually better for keeping my name off the public record?