Part of our guide to the registered agent service in Illinois. More guides on this topic
You've seen the videos. Form your LLC in Wyoming. Or Delaware. Low fees, no state income tax, big-company energy. It sounds like a hack.
For most small businesses, it isn't. The best state to form an LLC is usually the state where you live and do the work. Not because the others are bad. Because forming somewhere else rarely gets you out of your home state. It just adds a second state to pay.
Why this matters: If you form in one state and operate in another, your home state will usually want you to register there too, as a "foreign" LLC. Now you pay two filing fees, two sets of annual fees, and two registered agents.
The foreign LLC trap, in real numbers
A "foreign LLC" doesn't mean another country. It means an LLC formed in a different state. If it does business in your state, it registers there and follows that state's rules.
Say you live and work in Houston. You form in Wyoming because the fee is $100.
| Form in Texas | Form in Wyoming, work in Texas | |
|---|---|---|
| Formation filing | $300 (Texas) | $100 (Wyoming) |
| Register to do business in Texas | Not needed | $750 (Texas foreign registration) |
| Year-one state filings | $300 | $850 |
| Yearly fees after | Texas franchise tax report | Texas franchise tax report + Wyoming $60 minimum |
| Registered agents | 1 | 2 (one in each state) |
Sources: Texas Form 806 fee schedule, revised 09/26; Wyoming fee schedule, effective July 1, 2026.
The Wyoming route costs $550 more in state filings in year one. And Texas still taxes you as a Texas business. You didn't escape anything. You added a state.
Skip the Texas registration and you can face a late fee, and in many states an unregistered LLC can't bring a lawsuit in that state's courts until it registers.
Forming in your home state? Lobi files LLCs and corporations in all 50 states. The Launch package includes your filing, EIN, operating agreement and a year of registered agent for $195 plus state fees (regular $295), for a limited time. Start my LLC
When another state does make sense
There are real reasons to form outside your home state. They just apply to fewer people than the internet suggests.
| State | Filing fee | Yearly cost | Good fit | Not a fit |
|---|---|---|---|---|
| Your home state | $35 to $520 | Varies | Most local and online businesses | Rarely wrong |
| Wyoming | $100 | $60 minimum annual license tax | Owners with no home state presence, holding companies | Anyone who works in another state |
| Delaware | $110 | $400 annual tax, due June 1 | Startups raising venture money | A one-person shop with no investors |
| New Mexico | $50 | No annual report | Lowest upkeep on paper | Anyone who will still register at home |
| Nevada | $425 year one | $150 annual list + $200 business license | Businesses with real Nevada operations | Anyone shopping for a cheap filing |
Sources: Wolters Kluwer state LLC cost table; Delaware LLC formation instructions; Capitol Services on Delaware HB 400; Nolo on Nevada LLC filings.
Delaware got more expensive this year. Delaware's own formation instructions now list a $400 annual LLC tax, due June 1. Under HB 400, the jump from $300 applies to the 2026 tax year, so most LLCs first pay it in 2027.
Privacy is not a reason to pick a state. U.S. companies no longer file beneficial ownership reports with FinCEN. FinCEN's own page says it plainly: "U.S. companies are exempt from the Beneficial Ownership Information (BOI) reporting requirements." What shows up on your state's public record is mostly your registered agent and your business address. A registered agent service and a business address handle that in any state. We cover how in Anonymous LLC in 2026.
Three questions that pick your state
1. Where do you live, have an office, or have employees? Start there.
2. Are you raising money from investors who will ask for Delaware? If not, Delaware is a cost, not a perk.
3. Will you truly do business in no state except the one you form in? If yes, Wyoming or New Mexico can save money. If no, form at home.
What counts as "doing business" is set by each state. An office, employees, or a warehouse almost always counts. Check your state's rules or ask a CPA before you choose.
The bottom line
The cheapest state on paper is often the most expensive one for you. Add up the filing fee, the foreign registration you'd need at home, and two registered agents. Then compare it to forming at home.
Lobi Space files LLCs and corporations in all 50 states, and our registered agent service covers every state. In states other than Illinois, a trusted Lobi Space partner serves as your registered agent. See filing prices or read what it really costs to start an LLC.
Get it done at Lobi
| Service | What you get | Price | Start |
|---|---|---|---|
| File an LLC or corporation | Launch package: the filing, your EIN, an operating agreement or bylaws, and 1 year of registered agent | $195 plus state fees, regular $295 (limited time) | Start my LLC |
| Registered agent, any state | We accept legal papers and state notices and scan them to your portal. In states other than Illinois, a trusted Lobi Space partner serves as your registered agent. | $95 first year (limited time), then $125 a year | Buy registered agent |
| Virtual office (Illinois) | A Chicago street address with a suite number, mail handling and a member portal. 50% off your first year of registered agent | From $50/mo plus $95 setup | See virtual office plans |
| Business mailbox (Illinois) | A real Chicago address for mail and packages, scanned to your portal | From $30/mo plus $95 setup | See mailbox pricing |
| Virtual phone number | A local 312 number with call forwarding and voicemail to email | From $15.95/mo | Get a business number |
| Meeting rooms | Rooms for client meetings in Pilsen, 2-hour minimum | From $75/hr | Book a room |
| Notary | Walk-in notary, including USPS Form 1583 | $25 each | Notary services |
Also at Lobi: private offices, day offices and a podcast studio in Pilsen. Not sure what fits? Build your plan.
Frequently asked questions
What is the best state to form an LLC?
For most small businesses, the state where you live and do the work. Forming somewhere else usually means registering in your home state too, as a foreign LLC.
What is a foreign LLC?
An LLC formed in one state that does business in another. It registers in the second state and follows that state's rules. It has nothing to do with another country.
Is it cheaper to form an LLC in Wyoming or Delaware?
On the filing fee, sometimes. Once you add your home state's foreign registration and a second registered agent, usually not. Texas, for example, charges $750 to register an out-of-state LLC.
*Current as of November 2026. Government fees change. Confirm on your state's website before you file. This article is general information, not legal or tax advice. Talk to a CPA about state taxes.*
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