What Delaware actually gives you
- The Court of Chancery. A dedicated business court with two centuries of corporate case law and no juries. Disputes get decided by judges who do nothing else, the deepest, most predictable body of business law in the US.
- Investor familiarity. Every US VC's documents, lawyers and instincts assume Delaware. When you raise, nobody has to think about your state, and in fundraising, friction you remove is money.
- No state income tax on income earned outside Delaware, same practical result as Wyoming for a founder operating from outside the US.
- Privacy comparable to Wyoming, member names don't appear in the public formation record.
- Speed and infrastructure. Filings process fast, and every US bank, platform and law firm has seen ten thousand Delaware entities before yours.
Notice what's not on the list: tax savings, cheaper fees, or anything operational. Delaware's advantages are legal and reputational, they matter enormously to some businesses and not at all to others.
What it costs, honestly
| Item | Amount | When |
|---|---|---|
| Certificate of Formation | $110 | Once, at formation |
| Franchise tax | $300 flat, every LLC, regardless of revenue | Every year by 1 June ($200 penalty + interest if late) |
| Registered agent | Included year one with PowerLaunch; market rate $50-$150/yr after | Annual |
| Annual report | None for LLCs, the franchise tax is the whole obligation | , |
| State income tax | $0 on non-Delaware income | , |
Against Wyoming's $60 annual report, Delaware costs an extra $240 every year, forever. Over five years that's $1,200, trivial if it smooths a fundraise, pure waste if nobody ever asks where you're incorporated.
The one-question test
🎯Will a sophisticated third party ever evaluate your entity?
US venture investors, corporate acquirers, or enterprise partners doing serious diligence, if any of them are realistically in your future, Delaware's familiarity pays for itself. If your LLC exists to invoice clients, run Stripe, and hold a Mercury account, nobody who matters will ever care, and Wyoming does the same job for $240 less a year.
Delaware LLC vs Delaware C-Corp, don't confuse the two
"Investors want Delaware" really means "investors want a Delaware C-Corporation." A Delaware LLC gets you the state without the structure VCs actually require, priced rounds, stock options and QSBS all assume a C-Corp. If you're raising institutional money soon, form the C-Corp (or plan the conversion). If you're not, the LLC's pass-through simplicity wins. The full trade-off is in our LLC vs C-Corp guide.
Forming a Delaware LLC from outside the US
Name check against Delaware's registry; must include "LLC" or a variant.
File the Certificate of Formation ($110). Delaware asks for remarkably little: name, agent, signature.
Operating agreement, Delaware law gives it near-total contractual freedom; banks will ask for it.
EIN via the foreign-owner SS-4 path, see the EIN guide.
Bank account, Mercury, Wise or Relay; Delaware entities are the most familiar thing their compliance teams see.
Life after formation
One hard date: 1 June, franchise tax, $300, miss it and Delaware adds a $200 penalty plus interest, and eventually voids the LLC. Federal obligations (Form 5472 + pro-forma 1120, BOI) and your home country-side filings are identical to every other state. It all sits on the compliance calendar we hand every client.
