California is a common choice for founders who have customers, staff, or operations physically in the state, but it comes with a yearly cost that catches many non-US founders off guard. This guide walks through what you pay in year one, what you pay every year after, and when Wyoming or Delaware might serve you better.
Who California suits
California makes sense if your business has a real presence there. That could mean a co-founder or employee based in the state, an office or warehouse, or customers you serve primarily within California. If none of that applies to you, forming in California just to say you did adds an $800 yearly cost you do not need. Many non-US founders with no physical tie to California choose a lower cost state instead and register in California only if the business later needs a physical presence there.
What it costs in year one
California's LLC filing fee is $70. A corporation filing fee is $100. Processing typically takes 1 to 2 weeks. On top of the state fee, you pay for whichever PowerLaunch plan fits your business.
| Plan | Yearly price | Plus California LLC fee | Year one total |
|---|---|---|---|
| Launch | $295 | $70 | $365 |
| Run | $1,995 | $70 | $2,065 |
| Scale | $2,995 or $329/mo | $70 | $3,065 or $329/mo plus $70 |
State fees are charged at cost and are never refundable, even under PowerLaunch's formation guarantee. If you choose a corporation instead of an LLC, swap in the $100 filing fee.
The $800 franchise tax every year after
This is the number that matters most for California. Every LLC registered in California owes an $800 annual franchise tax, minimum, regardless of whether the business made money that year. This is separate from your PowerLaunch plan fee and separate from the state's annual report. It is a real, recurring cost of keeping a California LLC active, and it applies whether you are a resident or based outside the US. Because rules around minimum franchise tax can shift and sometimes include first year exceptions, check the California Franchise Tax Board's site for the current year's figure and any first year treatment before you file.
Registered agent requirement
California requires every LLC and corporation to keep a registered agent with a physical address in the state, available during business hours to receive legal and state mail. As a non-US founder, you will not have a California address of your own, so this is a required service. It is included in every PowerLaunch plan, so you do not need to arrange it separately.
Annual report
California requires a periodic filing to keep your LLC in good standing, known as the Statement of Information. This is separate from the franchise tax and has its own fee and its own schedule, which is usually not every single year for LLCs. PowerLaunch's Run and Scale plans include the annual state report filing as part of the service, so this gets handled without you tracking the deadline yourself. Since exact schedules and fees can change, it is worth confirming the current requirement on the California Secretary of State's site.
State income tax position
California taxes income connected to business activity within the state. If your LLC has no employees, no office, and no customers in California, and is only registered there on paper, your day to day federal filing obligations as a foreign-owned single-member LLC still apply regardless of state. That means Form 5472 filed with a pro forma 1120 by April 15. Separately, US-formed companies are currently exempt from BOI reporting under the 2026 interim FinCEN rule. State income tax rules for founders based outside the US vary by circumstances, so treat this section as general orientation and check California's tax authority site, or talk to a tax professional, for how it applies to your specific setup.
When Wyoming or Delaware is the better choice
If you have no physical tie to California, a lower cost state usually makes more sense for the LLC itself. Here is a general comparison to think through.
| Factor | California | Wyoming | Delaware |
|---|---|---|---|
| LLC filing fee | $70 | Lower, check current fee | Lower, check current fee |
| Yearly state cost | $800 minimum franchise tax | Low flat fee | Low flat fee |
| Best fit | Real presence in California | No physical presence, want low cost | Investors, future fundraising, corporate structure |
| Formation speed with PowerLaunch | 1 to 2 weeks | 1 to 3 business days | 1 to 3 business days |
If you plan to raise investment from US venture investors, Delaware is often preferred because investors are familiar with its corporate law. If you simply want a low cost, low maintenance US LLC with no physical operations in a specific state, Wyoming is usually the more economical route. California should be reserved for founders who genuinely need a presence there, because the $800 yearly tax adds up over time regardless of your revenue.
Step by step through PowerLaunch
- Pick your plan, Launch, Run, or Scale, based on how much ongoing bookkeeping and tax support you need.
- Choose California as your state and confirm whether an LLC or corporation fits your plans.
- Complete checkout with your business details. PowerLaunch prepares and files your formation documents, appoints your registered agent, and applies for your EIN.
- Expect formation in about 1 to 2 weeks for California. If you need your EIN faster as a non-US owner without an SSN, add expedited EIN processing for $295 on the Launch or Run plan.
- Once your EIN arrives, PowerLaunch can introduce you to Mercury, Wise Business, or Relay for a business bank account. Final approval is always the bank's decision.
- On Run or Scale, your annual report and business tax filings, including Form 5472 and the pro forma 1120, are handled as part of the plan. Remember the $800 California franchise tax is billed separately by the state and is your responsibility to pay on schedule.
What to do next
If California fits your situation, you can start the process now at powerlaunch.solutions/signup and pick the plan that matches how much support you want. If you are still deciding between California, Wyoming, or Delaware, book a free 20 minute consultation at powerlaunch.solutions/book and talk it through before you commit to a state.
