In the Delaware vs Wyoming LLC decision, most Amazon and Shopify sellers who are not raising venture capital do better with Wyoming, because it costs far less to keep each year and offers strong protection for single-member LLCs. Delaware earns its place when you expect institutional investors or plan to convert to a Delaware C corporation. For many US-based sellers, though, the best answer is neither, because the state you live and work in still taxes you and may charge its own fees on top.
The myth worth clearing up first is that forming in Delaware or Wyoming lets you skip taxes at home. It does not. If you run your store from California, Illinois or New York, that state still taxes the profit, and an out-of-state LLC can leave you paying two sets of state fees.
What Each State Costs in 2026
Formation is cheap in both states. The real gap shows up in year two and every year after, when Wyoming’s $60 minimum annual report fee meets Delaware’s flat annual LLC tax.
Formation fees and registered agents
Wyoming charges $100 to file Articles of Organization, according to the Wyoming Secretary of State’s fee schedule. Delaware’s Certificate of Formation fee sits in the same general range, but Delaware raised a long list of filing fees effective August 1, 2026, so check the current Division of Corporations schedule before you file.
Both states require a registered agent located in the state. If you do not live there, you pay an agent every year, and prices vary by provider. Your operating agreement has no state filing fee, and your EIN from the IRS is free.
Wyoming annual report and license tax
Wyoming’s annual report is due on the first day of your formation anniversary month. The Wyoming business fee schedule sets the license tax at $60 or two-tenths of one mill on the dollar, which is $0.0002 per dollar of the company’s assets located and employed in Wyoming, whichever is greater.
For an ecommerce seller, the asset formula rarely matters. Your inventory sits in FBA warehouses or a 3PL in other states, so most sellers pay the $60 minimum. Miss the report and the state can dissolve your LLC, which can freeze your bank account and trigger a marketplace re-verification.
Delaware annual LLC tax
Delaware LLCs pay a flat annual tax whether they made a sale or not, and Delaware does not require an LLC annual report. The Delaware Division of Corporations now lists the tax at $400, due on or before June 1 for the prior year. The increase from $300 applies from the 2026 tax year, so most LLCs first pay the higher amount by June 1, 2027. A late payment adds a $200 penalty plus 1.5% monthly interest on the tax and penalty.
Leave the registered agent out, since you pay one in either state, and Delaware costs $340 more per year than a Wyoming LLC paying the minimum. Over five years that is $1,700, enough to fund a test batch of a new SKU.
Privacy, Liability Protection and Investors
Wyoming leads on cost and small-business asset protection. Delaware leads on legal depth and investor familiarity. Which matters more depends on whether your biggest risk is a creditor or a cap table.
What stays out of public records
Neither state requires you to list members on the formation filing, and the registered agent’s address appears in the public record instead of your home. That privacy has limits. Your bank, Amazon, Shopify and the IRS all know who owns your LLC, and no state changes that.
Charging order protection
Charging order protection means a personal creditor of yours can usually reach only distributions from your LLC, not the business itself. Wyoming law extends this to single-member LLCs, the setup most sellers use, and Delaware also offers strong charging order rules.
This shields the business from your personal debts. It does nothing about a product liability claim against the business itself. For that you need insurance and a clean separation of business and personal money.
Delaware courts and venture capital
Delaware’s Court of Chancery hears business disputes with judges who specialize in corporate law, and decades of case law make outcomes easier to predict. That is valuable when you have partners, investors or a buy-sell agreement that could end in a fight. In most small-business partner disputes, though, the trouble starts with a vague operating agreement, so spell out who funds inventory, how profits are split and what happens when a partner wants out.
Venture capital firms expect a Delaware C corporation, not an LLC. If you plan to raise a priced round, a Delaware LLC is only a halfway step. Most ecommerce brands fund growth from cash flow, inventory financing or an eventual sale, so this applies to a small group of sellers.
Your Home State Usually Decides More Than Your Formation State
If you live and run your business in one US state, forming there is often the cheapest and simplest choice. Delaware and Wyoming do not move your tax home.
Where your profit is taxed
Your operating state is where you live, work and make business decisions. An LLC taxed as a sole proprietorship or partnership passes income to your personal return, so state income tax follows where you live. A seller in Florida or Texas pays no state income tax either way. A seller in California owes California tax on LLC profits even with a Wyoming LLC. If you are still deciding whether you need an entity at all, our article on whether Amazon sellers need an LLC covers that first step.
Foreign qualification and double fees
When an out-of-state LLC does business in your home state, it must register there as a foreign LLC. That means a second filing fee, a second annual report or tax, and often a second registered agent.
California shows the cost clearly. The Franchise Tax Board states that every LLC doing business or organized in California pays an $800 annual tax, so a Californian with a Wyoming LLC pays Wyoming’s $60 plus California’s $800 each year. Skipping registration does not remove the tax and can bring penalties, along with losing the right to sue in that state’s courts until you register.
Nexus follows inventory and sales
Your formation state has no effect on sales tax nexus. That comes from where your inventory sits, where your staff work and how much you sell into each state, and FBA spreads inventory across warehouses in states you never chose. Amazon collects sales tax as a marketplace facilitator in states with sales tax, but your direct Shopify sales are your responsibility, and some states also assert income or franchise tax nexus.
The other common mix-up is thinking the formation state sets your federal tax. Your federal tax classification (disregarded entity, partnership, S corp or C corp) is a separate choice made with the IRS, and a Wyoming LLC and a Delaware LLC with the same election pay the same federal tax.
When you formed in one state, live in another and hold FBA inventory in a dozen more, the filing map gets crowded fast. A free call with an ecommerce CPA can lay out every registration and return your setup creates before any of them are late.
What Changes for Sellers Based Outside the US
For non-US residents with no US office or staff, Wyoming is the common choice. Wyoming has no state income tax, Delaware does not tax an LLC on income earned outside Delaware, and with no US home state in the picture, Wyoming’s lower annual cost often decides it. Delaware makes more sense if you plan to bring in US investors.
That changes once you hire US staff, lease a warehouse or have a partner living in a US state, because that state can now claim you. Your federal position can shift too, so map it out with a team that handles US setup for international sellers.
EIN, bank account and marketplace verification
You need an EIN before you can open a US bank account or set up seller payouts, and the IRS does not charge for it. Without an SSN or ITIN, you apply on Form SS-4 by fax or mail, or by phone if you are outside the US, and the mail route can take several weeks. Banks look at your business details and documents more than your formation state, so have your formation papers, EIN letter, operating agreement and passport ready.
Amazon Seller Central and Shopify Payments verify both the LLC and the people behind it. Expect to upload a passport, proof of address, the EIN letter and a bank statement in the LLC’s name. Names and addresses must match across every document, since mismatches are a common cause of verification delays.
Federal filings and beneficial ownership reporting
A single-member LLC owned by a non-US person must file Form 5472 with a pro forma Form 1120 for any year it has reportable transactions with its owner, such as the money you put in or take out, even with zero revenue. The penalty for missing it is $25,000 per form, so put it on your calendar from the year you form.
Beneficial ownership information reporting changed again in 2026. FinCEN’s final rule, effective August 14, 2026, permanently exempts companies formed in the US from BOI reporting. A Delaware or Wyoming LLC therefore has no BOI report to file, whoever owns it. Companies formed outside the US that register to do business in a US state still report, so a foreign company registering in your target state should check FinCEN’s current guidance.
Picking the Right Fit
Wyoming suits most bootstrapped sellers and many international founders. Delaware suits brands headed toward investors or a C corporation. If you live and work in one state, forming there often beats both once you count foreign qualification. This is general information, and your own residency, partners and growth plans should drive the final call.
Frequently Asked Questions
Can I move my LLC from Delaware to Wyoming later?
Often, yes. Both states allow an LLC to transfer or domesticate into another state, which keeps the same legal entity, though each side charges filing fees and your bank and marketplaces will want updated documents. Some owners form a new LLC instead, which is simpler to file but means re-verifying seller accounts.
Is a Wyoming LLC enough to sell on Amazon in all 50 states?
Yes for the marketplace itself, since Amazon does not care where the LLC was formed. What the LLC cannot do is avoid registrations triggered by where you live, hire or store inventory, so a growing seller may still need sales tax permits or foreign LLC registrations in other states.
Which state do investors and buyers prefer?
Venture investors want a Delaware C corporation. Buyers of ecommerce brands care much less about the formation state than about clean books, verified profit and transferable accounts, so the state rarely moves a sale price.
Do I need a US address to form in either state?
You need a registered agent with a physical address in the state you form in, but you do not need to live in the US. Marketplaces and banks may ask for proof of your own residential address, wherever it is.
What are the downsides of a Wyoming LLC?
Wyoming has less business case law than Delaware, so outcomes in complex disputes are harder to predict. If you live elsewhere, you also pay a registered agent and may owe foreign registration fees in your home state.
Set Up Your LLC Where It Fits How You Sell
The formation state is a small part of your cost; your home state, nexus footprint and federal election drive most of it. AMZ Accountant has worked with more than 100 ecommerce businesses on entity structure and business advisory, including sellers entering the US from abroad. Book a free 15-minute discovery call to check your setup, with no obligation.