Wyoming vs Delaware: Which State Should Chinese Founders Choose?
Why Are These Two States So Popular?
Among all 50 US states, Wyoming and Delaware are the two most popular choices for Chinese entrepreneurs forming an LLC. Each has distinct advantages, but they suit different types of businesses.
Choosing the wrong state won't be catastrophic, but it could cost you hundreds or even thousands of dollars extra per year. So spending 5 minutes to understand the differences is well worth it.
Full Comparison
| Factor | Wyoming | Delaware |
|---|---|---|
| State Income Tax | None | None (for LLCs) |
| Franchise Tax | None | $300/year |
| Annual Report Fee | $60/year | $300/year |
| Registration Fee | $100 | $90 |
| Privacy Protection | Excellent (member info not public) | Good |
| Annual Maintenance Cost | ~$60 | ~$600 |
| Legal System | Good | Most mature (dedicated business court) |
| Investor Recognition | Average | Very high |
| Stripe Atlas Default | No | Yes |
| Registration Speed | Fast (1-3 days) | Fast (1-3 days) |
Wyoming Advantages
1. Extremely Low Cost
Wyoming has some of the lowest maintenance costs in the entire US. No state income tax, no franchise tax, and annual report fees of just $60. For bootstrapping founders, this means more capital for your actual business.
2. Best Privacy Protection
Wyoming does not require LLC member identity to be disclosed in public filings. This is an important advantage for founders who value privacy.
3. Strong Asset Protection
Wyoming's LLC laws provide some of the strongest asset protection in the US. A charging order is the sole remedy creditors have against an LLC member's interest.
4. Zero State Tax
No state income tax means you don't need to file a state tax return in Wyoming, reducing compliance burden and accounting costs.
Delaware Advantages
1. Most Mature Legal System
Delaware has a dedicated Court of Chancery that exclusively handles business disputes. Over 200 years of case law provides the most predictable legal environment for businesses.
2. Preferred by VCs and Investors
If you plan to raise venture capital, investors typically prefer Delaware entities. Most VC term sheets are drafted under Delaware law.
3. Stripe Atlas Default
Stripe Atlas registers companies in Delaware by default. If you're using Stripe Atlas, you'll be a Delaware entity.
4. Flexible Governance
Delaware's LLC Act allows extremely flexible operating agreement provisions, suitable for companies with complex ownership structures.
Our Recommendations
Choose Wyoming If:
- You're a solo developer or small team (1-3 people)
- Your primary goal is receiving payments and operating, not fundraising
- You want the lowest maintenance costs
- You run a SaaS, e-commerce, or freelance business
- You value privacy protection
- Your annual revenue is under $500K
Choose Delaware If:
- You plan to raise funding within 1-2 years
- You need to issue stock to investors or employees
- Your business has a complex ownership structure
- Investors specifically require Delaware incorporation
- You're building a venture-scale company
Simple Decision Tree
Are you planning to raise VC funding?
├── Yes → Delaware
└── No → Wyoming (save money + better privacy)
SuperOPC Supports All 50 States
No matter which state you choose, SuperOPC has you covered:
- LLC registration in all 50 states
- Includes Registered Agent, EIN application, Operating Agreement
- Starter plan from just $268/year
- Professional support in English and Chinese
Still unsure which state to pick? Contact us for a free analysis of which option best fits your situation.