Short answer
If you have an office or staff in a U.S. state, form the company in that state. If you live outside the U.S., Wyoming has the lowest yearly cost, Delaware is the standard for raising venture capital, and Colorado has the lowest state fees. California and Washington suit founders with ties to those states.
You can form a U.S. company in any state. You do not need to live there. Your choice affects your yearly cost and your taxes.
If you have a U.S. location, use that state
If you have an office, a warehouse or staff in a state, form the company there. If you form in another state, you must also register in your home state. Then you pay two states every year.
If you live outside the U.S.
Wyoming: our default pick
- State fee to form: about $100.
- Yearly report: due on the first day of your formation month. $60 minimum license tax.
- No state corporate income tax.
- Best for: a founder who wants the lowest yearly cost and simple rules.
Delaware: for fundraising
- State fee to form: from about $109.
- Yearly report and franchise tax: due March 1. $50 report fee plus franchise tax, $175 minimum.
- No Delaware income tax if the company does not operate in Delaware.
- Best for: a founder who plans to raise venture capital. Most U.S. investors expect Delaware.
Colorado: lowest state fees
- State fee to form online: about $50.
- Yearly periodic report: $25. Due by the last day of your formation month. No penalty until two months later.
- State corporate income tax: 4.4% on Colorado income. Colorado may expect a state return, so we check your case first.
- Best for: a founder who wants the lowest state fees, or who has ties to Colorado.
California: where Zovud is based
- State fee to form: about $100.
- Yearly Statement of Information: $25, due by the last day of your formation month.
- Corporate tax: 8.84% of net income, with an $800 minimum each year. New corporations usually do not pay the minimum in their first tax year.
- Best for: a founder who lives, hires or sells in California.
Washington: no income tax
- State fee to form: about $200.
- Yearly annual report: $70, due by the last day of your formation month.
- No corporate or personal income tax. Business done in Washington pays B&O tax on gross receipts.
- Best for: a founder who wants no income tax and has ties to Washington.
Any other state
You can form in any of the 50 states or D.C. Each state has its own report date and fee. Our deadline calendar shows the yearly rule for every state.
Our simple rule
U.S. location: use that state. Raising venture capital: Delaware. Lowest yearly cost: Wyoming. Colorado is a good low-fee choice when its state tax does not apply to you. We confirm the choice on a free call.
Sources
- Wyoming Secretary of State: Business
- Delaware Division of Corporations
- Colorado Secretary of State
- California Secretary of State: Business Programs
- Washington Secretary of State: Corporations
This guide is general information, not legal or tax advice, and rules change. Confirm figures with the state or IRS, or ask us on a free call.