Delaware vs. Wyoming vs. California
Choosing where to incorporate impacts your initial formation costs, annual franchise taxes, legal dispute resolution, and investor perception. Use the modeler below to calculate your exact 1-year and 5-year carrying costs.
Delaware vs. Wyoming vs. California Comparison
Model your true formation and ongoing operational carrying costs across all 3 jurisdictions.
For closely held LLCs and online businesses with no California presence, Wyoming costs $62 a year at your asset level, has no income tax, and does not list members in public filings.
The Investor Standard
Venture-backed startups, high-growth technology companies, and venture equity raises.
- The expected choice for venture financing and accelerators
- Court of Chancery: business disputes heard by judges, not juries
- Flexible governance rules; no public list of LLC members
The Lowest Cost Fortress
Bootstrapped businesses, holding companies, digital freelancers, and privacy-focused founders.
- Low annual cost: $62 for most entities
- No corporate or personal income tax
- Charging-order protection that covers single-member LLCs by statute
Direct Domestic Entity
Businesses with local retail, California-resident founders, or teams physically located in California.
- One state to pay if you live and work in California
- No foreign registration or second registered agent
- Corporations are exempt from the $800 minimum in their first taxable year
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Head-to-Head Statutory Comparison Matrix
| Key Metric / Dimension | Delaware (DE) | Wyoming (WY) | California (CA) |
|---|---|---|---|
| Primary Governing Statute | Del. Code Title 8 (DGCL) | Wyo. Stat. Title 17 | Cal. Corp. Code & R&TC |
| Initial Formation Filing Fee | $110 (LLC) / $89+ (Corp) | $100.00 | $70.00 |
| Annual Franchise / License Tax | $400 (LLC) / $175–$200k+ (Corp) | $60 ($62 e-file) | $800 minimum |
| State Corporate Net Income Tax | 8.70% (DE-apportioned) | 0.00% (Zero) | 8.84% (C-Corp) / 1.5% (S-Corp) |
| Gross Receipts / Additional Fees | None for out-of-state holding | None | LLC Fee up to $11,790 (Form 3536) |
| Judicial Forum / Dispute Court | Court of Chancery (Equity judges) | Chancery Court (Established 2021) | Superior Court / Complex Division |
| Public Member / Director Disclosure | Directors listed on Annual Report | High privacy (no public member list) | Public Statement of Information |
| Venture Capital / YC Acceptance | Universal Gold Standard (100%) | Rarely accepted by institutional VC | Acceptable for local bootstrapped/tech |
| Remote CA Worker Penalty | Dual Tax: $400 DE + $800 CA = $1,200/yr | Dual Tax: $62 WY + $800 CA = $862/yr | Single Tax: $800 CA only |
The Myth of the “Cheap” Out-of-State Entity
Many first-time entrepreneurs form a Wyoming LLC believing they will only pay $62/year. However, if you reside in California, maintain a home office in California, or hire a single California resident, you are legally “transacting intrastate business” in California (Cal. Corp. Code § 2105).
This means you must maintain your Wyoming entity ($62/yr + $50 registered agent) AND foreign qualify in California ($70 initial fee + $800/yr annual tax + $20 biennial statement). Your total annual cost becomes $932/year—more expensive than if you had formed a California entity directly!