Can I Form an LLC in a Different State?

If you’re starting a business in 2025, you might be wondering:
Can I form my LLC in a different state than where I live or work?

The short answer is yes—but the smarter question is: Should you?
This guide explains the pros, cons, legal requirements, and tax implications of forming an LLC outside your home state—so you can make the right move for your business.

Why Do Entrepreneurs Form LLCs in Other States?

Certain states have built reputations as LLC-friendly jurisdictions due to low taxes, simple filing requirements, and strong privacy protections. The most popular include:

• Delaware: Ideal for startups and investors; strong legal infrastructure

• Wyoming: No corporate income tax; low annual fees; anonymity for owners

• Nevada: No personal or corporate income tax; strong asset protection laws

These perks sound attractive—but they don’t automatically apply if you’re doing business in another state.

What Happens If I Form an LLC in Another State?

You can legally form an LLC in any U.S. state. However, if you operate in a different state, you’ll likely need to register your out-of-state LLC as a foreign entity in the state where you actually do business.

This means you’ll need to:

• Pay fees in both states

• File reports in both states

• Appoint registered agents in both states

• Comply with two sets of regulations

What Is “Doing Business” in a State?

States have slightly different definitions, but you’re usually considered to be doing business in a state if you:

• Operate a physical office or store

• Work from your home in that state

• Hire employees or contractors there

• Hold inventory or business assets

• Meet with clients in person

• Earn income in that state

So, if you live and work in California, forming an LLC in Wyoming won’t let you escape California taxes and registration.

Tax Implications of Forming an LLC in a Different State

One of the most misunderstood aspects of forming an out-of-state LLC is taxes.

Here’s the reality in 2025:

1. You Pay Taxes Where You Earn Income

Even if your LLC is registered in Nevada, if your business earns revenue in New York, New York wants its cut. State income tax is based on where the income is generated—not where the LLC paperwork is filed.

2. Double the Filing, Double the Fees

Forming your LLC in one state and operating in another often means:

• Annual report filings in both states

• State-specific LLC taxes or franchise fees (e.g., California’s $800 minimum franchise tax)

• Two registered agents and possibly two sets of business licenses

This quickly adds up and cancels out any tax savings you hoped to gain.

When Does It Make Sense to Form an LLC Out of State?

There are situations where forming an out-of-state LLC is smart:

• You’re building a venture capital–backed startup (Delaware is often preferred)

• You run a fully remote, online-only business with no physical location

• You want stronger privacy protections not available in your home state

• You have multiple co-owners in different states, and need a neutral jurisdiction

In these cases, forming in another state can be a strategic move—as long as you understand the added complexity.

Legal Requirements for Out-of-State LLCs (2025 Update)

Whether you form in your home state or not, your LLC must:

• Have a registered agent in every state where it’s registered

• File annual reports or statements of information

• Stay compliant with state-specific LLC laws

• Pay applicable state business taxes or fees

For example, even a foreign LLC in California must pay the $800 annual minimum tax, file a Form 568, and meet local licensing requirements.

Final Verdict: Can You Form an LLC in Another State?

Yes—you absolutely can form an LLC in a different state.
But before you do, make sure it makes legal and financial sense.

Here’s a quick recap:

Ready to Start the Right Way?

At EasyKnow, we help entrepreneurs form LLCs the smart way—with clarity, compliance, and confidence.

Form Your LLC Today: https://easyknow.co/business-formation-services/

Don’t just start your business. Start it right.