The 7 best US states to form your zero-tax LLC

Colorado

• A little-known state of formation for LLCs
• A respectable, roll-up-your-sleeves image
• Anonymity available
• Ltd suffix possible

A Colorado LLC offers plenty of advantages for entrepreneurs and business owners, especially if you care about credibility and a good reputation. The state is known for its dynamic economy and its climate for innovation.

A Colorado LLC is completely anonymous: your name appears nowhere!

While other states such as Delaware or Wyoming are often associated with tax havens, Colorado stands for serious business.

Your Colorado LLC can operate in all 50 US states. The state offers a perfect balance between entrepreneurial freedom and regulatory certainty.

For tech startups, e-commerce and B2B service providers in particular, Colorado is a first-class choice.

Colorado is one of the few states that allow an Ltd suffix for the LLC (so ABC Ltd instead of ABC LLC). That can work in your favour, for example combined with a business address in London or Ireland to give your company a "European look".

Delaware

• The proven standard
• Recommended by 100% of US attorneys
• Anonymity available

Delaware is by far the most popular state for company formation, one of the top states in the US for setting up a business, and the state of formation most US attorneys recommend for LLCs.

The reasons are not tax-related, as is often wrongly assumed. Delaware offers no tax advantages over other US states.

Instead, Delaware's company law and its courts are very flexible and business-friendly. And as the oldest state in the US, Delaware has a vast body of the precedents that matter so much in Anglo-American common law.

So if you have no other specific preference for your state of formation, Delaware is always a good choice.

Florida

• The number 1 lifestyle choice
• A positive image
• No anonymity

Unlike in Delaware and Wyoming, the founder or member of a Florida zero-tax LLC is not anonymous. Your name, including your private address, is published in the state of Florida's company register, where anyone can look it up online with ease.

That need not be a disadvantage. Quite the opposite: sometimes you actually want to appear in a public register as the member, for example because certain service providers, business partners or customers require it.

Nevada

• Your presence in the western US
• Business-friendly
• Ltd suffix possible
• No anonymity

Nevada is a top location for your US LLC as an international founder. As in Florida, there is NO anonymity in the company register here.

The Silver State offers you an extremely favourable tax climate: there is no state income tax (not relevant for your zero-tax LLC, but it says something about the political climate in Nevada).

Formation costs are low and the red tape is minimal.

The mountain bluebird, Nevada's state bird, symbolises the freedom you enjoy here in business. You benefit from a stable economy and flexible company laws. Las Vegas also offers international flight connections and networking opportunities.

With an LLC in Nevada you position yourself ideally for the global market while enjoying maximum entrepreneurial freedom and protection.

Nevada is one of the few states that allow an Ltd suffix for the LLC (so ABC Ltd instead of ABC LLC). That can work in your favour, for example combined with a business address in London or Ireland to give your company a "European look".

New Mexico

• A little-known state of formation for LLCs
• Affordable
• Anonymity available

If you are looking for the ideal state for your LLC, you should give New Mexico serious thought. While Delaware and Wyoming, as the traditional LLC locations, now have a somewhat tarnished reputation and are eyed critically by authorities around the world, New Mexico is still considered a "fresh" location.

As a non-US resident, New Mexico gives you excellent privacy, because no personal data has to be made public. Unlike Delaware and Wyoming, there are no annual reporting obligations and no franchise tax.

The administration is unbureaucratic and modern: most steps can be done online. This lean structure is ideal for digital entrepreneurs and online sellers in particular. The state offers a stable legal environment and is less in the spotlight of international regulators than the better-known LLC locations.

Texas

• The number 1 business state
• No anonymity

Texas is an excellent choice for your US LLC as an international founder.

The Lone Star State offers you a thriving economy and a business-friendly climate. Formation costs are relatively low, and there is no state income tax. The latter is not relevant for your zero-tax LLC, but it says something about the political climate in Texas.

You benefit from robust infrastructure and a large market.

The varied landscape and warm climate make it a pleasant place to live and work. Texas is also strategically well placed for trade with Latin America. With an LLC in Texas you have a solid base for your business.

Compared with Delaware and Wyoming, Texas has an untarnished, roll-up-your-sleeves "doer" image. There is no anonymity.

Wyoming

• Top for liability protection
• Top for asset protection
• Anonymity available

Wyoming limited liability companies offer the best laws for protecting assets and allow anonymous ownership.

Online shops, real estate investors and holding companies are just a few of the sectors that benefit from forming LLCs in Wyoming.

Unlike other US states, Wyoming's company law expressly provides that creditors of an LLC member have no right to reach through to the LLC's assets.

That is not the case in other US states. There, a creditor of the LLC member can show that the member used the LLC as a "petty cash box" and thereby gain access to the LLC's assets.