Delaware vs New York LLC: 2026 comparison for non-residents

Side-by-side comparison: Delaware vs New York

5-year state cost: Delaware vs New York

State filing fee + annual fees over 5 years, in USD. Delaware highlighted. Excludes registered agent and CPA fees, which apply to both.

What New York does well

Founders with New York physical presence specifically.

• Recognized by NYC investors and counterparties.
• Strong New York case law for some matters.

What New York does not do as well

• NY publication requirement: must publish formation in two newspapers, $500-$2,000 cost depending on county.
• Biennial fee can be high.
• NY State personal income tax for residents.

When Delaware wins

Almost always. NY publication requirement alone makes it expensive.

When New York wins

Founders with NY physical presence and specific NY-based business reasons.

Practical takeaway for non-resident founders

Avoid New York for non-resident formation. Delaware formation plus NY foreign-qualification (when needed) is the standard pattern.

What does a New York LLC actually cost to keep alive each year?

New York charges a $200 filing fee to form an LLC, which already sits above Delaware's $110 Certificate of Formation. The number that surprises most non-resident founders comes after formation: New York imposes a publication requirement. Within 120 days of forming, you must publish notice of the LLC in two newspapers designated by the county clerk where your registered office sits, and you must run that notice for six consecutive weeks. The combined cost of those two papers plus the Certificate of Publication filing typically lands between $500 and $2,000, depending entirely on which county your address falls in. New York County (Manhattan) carries some of the steepest newspaper rates in the state, so a founder who picks a Manhattan address pays far more than one in an upstate county.

On top of that, New York levies a biennial filing fee that ranges from $25 to $4,500 depending on the LLC's New York-source gross income, and it requires a biennial statement to keep the entity in good standing. Compare that to Delaware, where the entire recurring obligation is a flat $300 franchise tax due every June 1, with no income reporting baked into the fee and no publication step at all. For a non-resident with modest revenue, the Delaware number is predictable from year one, while the New York number depends on figures you may not be able to forecast and starts with a four-figure publication bill that has nothing to do with how much you earn.

How does New York's franchise and biennial fee structure compare to Delaware's flat $300?

Delaware's appeal for a bootstrap founder is the simplicity of its math. The state does not run a graduated franchise tax for LLCs the way it does for corporations. An LLC owes one flat $300 payment each year, due June 1, and that is the whole story. You do not file a separate state income return tied to that fee, and the amount does not climb as the business grows. A founder can write "$300/year" into a budget on day one and trust it through year five.

New York's biennial LLC fee works on a sliding scale tied to New York-source gross income, and the brackets matter once an LLC has any meaningful in-state activity. The key differences for a non-resident planning ahead include:

• Delaware: a single flat $300 franchise tax, the same for a dormant holding LLC and a busy operating LLC.
• New York: a biennial fee from $25 up to $4,500, scaling with New York-source gross income, plus the recurring biennial statement.
• Delaware: no formation-stage publication cost at all.
• New York: a one-time but unavoidable publication bill of roughly $500 to $2,000 before the LLC is even in good standing.

The practical takeaway is that a New York LLC front-loads a large, location-driven cost and then layers an income-sensitive recurring fee on top, while Delaware keeps the entire recurring obligation flat and divorced from revenue. For a founder who wants the cost of the entity itself to stay quiet in the background, the flat $300 is far easier to live with than a structure where two of the line items move with where you registered and how much you sell.

Will a New York LLC create state income or sales tax exposure for a non-resident?

Forming in New York does not by itself pull a non-resident into New York personal income tax, because that tax follows New York residency and New York-source income rather than the state of formation. But the relationship is closer than many founders expect. If your LLC actually conducts business in New York, hires there, or earns income sourced to the state, you can end up filing New York returns and, for residents, facing New York's personal income tax. The same income-source logic drives the biennial fee brackets, so the more genuinely "New York" your activity is, the more the state's tax machinery engages with you.

Sales tax is a separate question that neither Delaware nor New York lets you escape just by choosing a state of formation. Sales tax obligations attach where your customers are and where you have economic or physical nexus, not where the paperwork was filed. A founder who forms in Delaware but sells taxable goods to New York buyers can still trigger New York sales tax collection duties once nexus thresholds are met. The reverse holds too: forming in New York gives you no sales tax shelter elsewhere. The honest framing for a non-resident is that Delaware avoids the New York-specific income and biennial-fee entanglement, but neither state offers a magic exemption from the destination-based sales tax rules that apply wherever your customers actually are.

Which state gives a non-resident founder more privacy?

Privacy is one of the cleaner contrasts between these two states. Delaware does not require members or managers to be named in the public Certificate of Formation, so the ownership of a standard Delaware LLC is not exposed in the state's public filing. New York's publication requirement cuts the other way: the whole point of running notice in two newspapers for six weeks is to make the LLC's formation a matter of public record. The published notice and the surrounding filings put information about the entity into the open in a way that a Delaware founder never has to do.

It is worth being precise about what privacy means here so the comparison stays honest:

• Delaware keeps member and manager names off the public formation document by default.
• New York's publication step is designed to publicize the LLC, the opposite of anonymity.
• Federal beneficial ownership reporting under the Corporate Transparency Act no longer applies to US-formed LLCs after FinCEN's Interim Final Rule of March 26, 2025, so neither a Delaware nor a New York LLC owned by US-formed entities carries that filing.
• Privacy from the public is not the same as privacy from the IRS or your bank, both of which still collect ownership information regardless of state.

For a non-resident who values keeping ownership out of public databases, Delaware is the more natural fit, and New York is structurally the harder state to stay quiet in because publication is mandatory rather than optional.

When is Delaware clearly the better choice over New York?

For the typical non-resident founder with no US physical presence, Delaware wins on almost every axis that matters at the formation stage. The flat $300 annual franchise tax is predictable, the formation fee is lower at $110, there is no publication bill, member names stay off the public filing, and the entity is widely recognized by banks and investors who see Delaware LLCs every day. A founder building a software product, a content business, an agency, or a holding structure, with customers spread across many countries and no specific tie to New York City, gets all of Delaware's advantages and none of New York's friction.

Delaware is the stronger pick whenever the business does not have a concrete operational reason to be in New York. If your team is remote, your customers are global, and your banking runs through a fintech rather than a New York branch, then forming in New York adds the $500 to $2,000 publication cost and a potentially four-figure biennial fee without buying you anything you can use. Delaware's deep body of business case law and its familiarity to counterparties give you the legal predictability and credibility that founders usually want, and you reach it without ever touching a newspaper publication clerk or a New York income-source calculation. For the bootstrap, location-independent founder, that combination is hard to argue against.

When does New York genuinely win for a founder?

New York is not a trap in every situation, and it would be dishonest to pretend otherwise. There are real cases where forming directly in New York is the right call. The clearest one is genuine New York physical presence: if you live in New York, run an office there, hire New York employees, or operate a storefront or physical location in the state, then you are going to be a New York entity in substance no matter where you file. In that scenario, forming in New York from the start avoids the cost and overhead of forming in Delaware and then registering back into New York as a foreign LLC.

New York also carries weight in specific business contexts where local recognition has practical value:

• Founders raising from or contracting with New York City-based investors and counterparties who are comfortable with New York entities.
• Businesses whose disputes are likely to be governed by and litigated under New York law for reasons specific to their industry.
• Operators with a New York office, New York staff, or a New York retail footprint that makes in-state status unavoidable anyway.

The common thread is a real, physical, or contractual New York connection. If the business has that connection, New York's costs are simply the price of operating where you actually are. If it does not, those same costs become pure overhead with no offsetting benefit.

How do banks and investors view a New York LLC versus a Delaware LLC?

For banking, a non-resident founder's practical experience is shaped far more by the fintech onboarding process than by the state of formation. Providers like Mercury, Wise, Relay, Lili, and Payoneer regularly open accounts for non-resident-owned US LLCs, and a clean Delaware LLC with an EIN moves through their checks smoothly because it is a pattern they recognize constantly. A New York LLC can also be banked, but the founder first has to clear the publication step and the heavier formation paperwork before the entity is fully in good standing, which adds time before the banking conversation even starts.

On the investor side, the picture is more nuanced than "Delaware always." Most institutional venture investors expect a Delaware C corporation rather than any LLC when a priced round happens, so neither a Delaware LLC nor a New York LLC is the end-state for a venture-track company. What Delaware offers at the LLC stage is universal familiarity: an investor reviewing your structure recognizes a Delaware LLC immediately and knows how to convert it later. A New York LLC is recognized by New York-based investors and counterparties and is perfectly valid, but it is a less common default for a non-resident and may invite questions about why New York was chosen if there is no New York operating reason. For most non-residents, Delaware is the smoother starting structure precisely because it raises the fewest questions.

What does foreign-qualifying a Delaware LLC into New York actually cost?

Many non-resident founders assume the choice is binary, but the standard pattern is often both: form in Delaware, then register the Delaware LLC to do business in New York as a foreign LLC only if and when actual New York operations begin. The important and frequently missed detail is that New York applies its publication requirement to foreign LLCs too. So a Delaware LLC that foreign-qualifies into New York still has to run the two-newspaper, six-week notice and file the Certificate of Publication, which means the $500 to $2,000 publication cost reappears at the qualification stage rather than being avoided.

That reality reshapes the decision in a useful way. If you are confident you will operate in New York from the outset, paying the publication cost once through direct New York formation can be cleaner than forming in Delaware and then paying a New York registration fee plus the same publication cost on top. If you are not sure New York operations will ever materialize, Delaware formation lets you defer the entire New York cost stack until it is actually needed, and possibly avoid it entirely. The mistake to avoid is treating Delaware as a way to dodge New York's publication rule while still operating in New York, because the rule follows the operating activity, not just the state of formation.

What are the federal filings a non-resident owes regardless of which state they pick?

Whichever state you choose, the federal obligations for a non-resident-owned US LLC are the same, and they do not change based on Delaware versus New York. You will need an Employer Identification Number, which a non-resident without a Social Security number obtains by filing Form SS-4, typically with the IRS issuing the number in roughly 8 to 10 business days. The EIN itself is free, and any service charging you for the number is charging for the handling rather than for a government fee.

The reporting requirement that catches non-residents off guard is the foreign-owned single-member LLC filing. A US LLC that is wholly owned by a non-US person and treated as a disregarded entity must file Form 5472 together with a pro forma Form 1120 each year, and the penalty for missing that filing starts at $25,000. This obligation is federal and applies identically to a Delaware LLC and a New York LLC, so it should not factor into the state-selection decision. What it should do is remind a non-resident that the cheaper-sounding formation state never removes the federal compliance work, and that the real comparison between Delaware and New York lives in the state-level costs: Delaware's flat $300 against New York's publication bill plus income-scaled biennial fee.

How does Delewarellc handle a Delaware formation for a non-resident?

Delewarellc focuses specifically on forming Delaware LLCs for founders who live outside the United States and have no US physical presence, which is exactly the profile that benefits most from avoiding New York's publication and biennial-fee structure. The service is priced as a one-time $297, and it covers the parts of the Delaware process that a non-resident cannot easily handle alone, including filing the Certificate of Formation and guiding the SS-4 path to an EIN for an applicant with no Social Security number. The goal is to land you with a Delaware LLC whose recurring obligation is the single flat $300 franchise tax due each June 1, with nothing else moving in the background.

Because Delaware avoids the newspaper publication step entirely, a non-resident does not have to manage county-specific newspaper rates, six-week notice windows, or a Certificate of Publication, all of which a New York formation would require. Once the LLC exists and the EIN is issued, the same entity is ready for fintech banking through providers such as Mercury, Wise, Relay, Lili, and Payoneer, and it is recognized by the counterparties a global founder typically deals with. If New York operations ever become real, the LLC can foreign-qualify into New York later, with full awareness that the publication cost attaches at that point. For a non-resident with no US footprint, this Delaware-first path keeps the formation simple and the recurring cost flat.

What is the practical recommendation for a non-resident with no US presence?

The recommendation for a non-resident founder with no US physical presence is direct: form in Delaware, not New York. The reasoning is concrete rather than ideological. New York front-loads a $500 to $2,000 publication cost that buys nothing for a founder with no New York activity, then adds a biennial fee that can climb to $4,500 as income scales, and it makes formation a public, published event. Delaware replaces all of that with a $110 formation fee, a flat $300 annual franchise tax, no publication step, and member names kept off the public filing. For a business with global customers and remote operations, the Delaware structure is cheaper, quieter, and more predictable across every year you hold it.

The one situation that flips this recommendation is genuine New York presence: a New York office, New York employees, a New York storefront, or a contractual reality that ties the business to New York law. In that case the New York costs are the cost of being where you actually operate, and direct New York formation can be the cleaner route. For everyone else, the standard and well-worn pattern is Delaware formation first, with New York foreign-qualification held in reserve for the day, if it ever comes, that real New York operations begin. The federal obligations, including the EIN via Form SS-4 and the Form 5472 with pro forma 1120, apply either way, so they do not tilt the choice. On the state-level math that actually differs, Delaware is the clear answer for a non-resident with no US footprint.