Compare taxes and see how much you save moving from Wyoming to Delaware
Wyoming versus Delaware is the definitive incorporation comparison for US small business owners and startup founders — not because either state taxes your business income heavily, but because they represent two different philosophies of entity formation. Wyoming: the absolute minimum tax state. No income tax, no corporate income tax, no franchise tax, minimal annual fees, and some of the strongest asset protection laws in the country. Delaware: the investor-backed startup standard. No income tax on out-of-state income for Delaware corporations, but an annual LLC tax of $300 and a C-corporation franchise tax that can run from $50 to $200,000+ per year depending on the number of authorized shares — a serious expense for companies that have issued substantial equity. For a bootstrapped LLC or small business that will never seek institutional venture capital: Wyoming wins on every cost metric. No state income tax, annual LLC report fee of $60 (the lowest in the US for a major incorporation state), and excellent asset protection. For a startup planning to raise venture capital from institutional investors (Series A+): Delaware C-corporation remains the industry standard. Most VC term sheets specify Delaware C-corp. The Delaware Court of Chancery has centuries of predictable corporate law that VCs and their attorneys rely on. Wyoming is gaining recognition for LLCs, trusts, and small business holding companies. Delaware's advantage is specifically for institutional-investment-path startups.
No Income Tax, No Franchise Tax, No Corporate Tax
Zero personal income tax; zero corporate income tax; zero franchise tax; no annual report fees beyond small administrative charges; strong asset protection
No Out-of-State Income Tax, Annual Franchise Tax
No income tax on out-of-state Delaware income; annual LLC tax $300; C-corp franchise tax based on authorized shares ($50–$200K+); gold standard for investor-backed startups
At Annual entity costs income:
Wyoming LLC annual cost: ~$60 report fee. Delaware LLC annual cost: $300 tax + $50 report = $350/year. C-corp difference is larger: Wyoming C-corp has no franchise tax; Delaware C-corp franchise tax runs $175–$200,000+/year depending on authorized shares. For large share count Delaware C-corps, annual savings from Wyoming can be substantial.
| Income | WY Tax | DE Tax | Savings | 10-Year |
|---|---|---|---|---|
| LLC annual entity cost | ~$60/year (annual report) | ~$350/year ($300 tax + $50 report) | WY saves ~$290/year | $2,900 |
| C-corp (10M authorized shares) | $0 (no WY franchise tax) | ~$3,000–$8,000/year DE franchise tax | WY saves ~$3,000–$8,000/yr | $30,000–$80,000 |
| C-corp (100M authorized shares) | $0 | ~$50,000–$200,000/year DE franchise tax | WY saves ~$50,000–$200,000/yr | $500,000–$2,000,000 |
| Operating income (WY resident) | $0 personal income tax | $0 (if not DE resident) | Equal — neither state taxes operating income for non-residents | $0 |
CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. This helps us provide free tax calculators and comparison tools. Learn more about our affiliate partnerships
★ 4.8 verified reviews · 3,758 reviews
Choosing the right incorporation state affects your annual costs, asset protection, and investor readiness for years to come. Taxhub matches you with a CPA who can model your specific situation — whether you're a solo operator, LLC owner, or startup founder. Virtual meetings, fixed pricing.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a Small Business Tax CPA →For most small businesses, sole proprietors, and bootstrapped LLCs: Wyoming. The cost is lower ($60/year vs $350/year), the asset protection is strong, and there is no Delaware-style franchise tax trap. Wyoming LLCs are fully valid in all 50 states. You must register as a foreign LLC in your home state if you're operating there — but that's true of both Wyoming and Delaware. The Wyoming advantage is pure cost savings. For startups planning to raise venture capital, seed rounds, or institutional investment: Delaware C-corp. It's the investor standard and most VCs won't invest in a Wyoming or Nevada structure without requiring conversion first.
Delaware calculates franchise tax using one of two methods: the Authorized Shares Method or the Assumed Par Value Capital (APVC) Method. Under the Authorized Shares Method: 5,000 shares or fewer = $175/year; above 5,000 shares, the fee increases rapidly. A startup that authorizes 10 million shares (common for investor-friendly cap tables) using the Authorized Shares Method would owe approximately $80,000–$100,000+ per year in franchise tax. The APVC method typically results in the $175–$1,000 range for most early-stage startups. Delaware's Secretary of State calculates the minimum tax using the Authorized Shares method, so companies must proactively file using the APVC method. Many startups are blindsided by this in their first year.
Yes, but with an important caveat: you must register the Wyoming LLC as a 'foreign LLC' in any state where it has employees, an office, or engages in regular business activity. The 'foreign registration' requires paying that state's fees and annual reports. The Wyoming LLC formation saves on Wyoming entity costs — but if you operate from California, you still pay California fees and taxes on California-sourced income. Wyoming is most beneficial for: online businesses with no state nexus, holding companies for assets, Wyoming-based operations, and owners genuinely domiciled in Wyoming.
Wyoming has become a major hub for asset protection structures, particularly: Wyoming LLCs as holding companies for real estate owned across multiple states, Wyoming Directed Trust Act trusts (some of the strongest in the US for multi-generational planning), anonymous LLCs (Wyoming does not require member names in public filings), and Wyoming series LLCs (allow separate asset compartments within one entity). For attorneys and CPAs structuring high-net-worth client portfolios, Wyoming entities are frequently used alongside Nevada and Delaware structures.
For VC-backed C-corps: no. The conversion cost and disruption to investor relationships exceeds any franchise tax savings, and Delaware's legal framework is essential for institutional capital. For Delaware LLCs with no institutional investors and no plans to raise: potentially yes, if the Delaware annual fees are significant. For Delaware C-corps with large authorized share counts paying high franchise tax: consult a CPA — you may be able to reduce Delaware franchise tax substantially by switching to the Assumed Par Value Capital method without converting states.