Freedom of contract, a specialist court, and a filing that asks for almost nothing — but this is the one US-onshore jurisdiction in the set, and that changes the tax story [1][2][3].
Four properties that keep coming up when founders choose a Delaware LLC [1][2][3].
Delaware's LLC Act states its own policy is "to give the maximum effect to the principle of freedom of contract" [2]. The Operating Agreement — never filed with the state — controls almost everything: management, economics, voting, exit terms. You're not boxed into a share-class structure.
The Delaware Court of Chancery has no juries — governance disputes are decided by judges chosen for corporate expertise, who write detailed opinions rather than unexplained verdicts. A century of resulting case law makes outcomes more predictable than in most other US states [8][9].
What Delaware's LLC Act actually requires — and which parts Otonomos takes off your plate [1][3][4].
| What Otonomos handles for you | What you do | |
|---|---|---|
| Name clearance | Checks availability against Delaware's name index | Pick your preferred name [3] |
| Registered agent | Provided — mandatory regardless of where you live [1] | — |
| Certificate of Formation | Files with the Division of Corporations | Funds the $110 filing fee + any expedite tier [3][4] |
| Operating Agreement | Can provide a template | Own the substantive terms — management, economics, exit [1][2] |
| Federal EIN | Handles the application, incl. the phone/fax/mail path required for non-US applicants | Provide ownership info for Form SS-4 [21] |
| US business bank account | Can assist | Complete the bank's own KYC directly — runs on the bank's timeline [21] |
| Tax classification election (if not keeping default) | Coordinates with your tax advisor | Decide with a US tax preparer whether to elect C-corp/S-corp [13][16] |
| Form 5472 + pro forma 1120 (if wholly foreign-owned, single-member, disregarded) | Can coordinate with your CPA | File annually even with zero transactions — this is easy to miss and carries a $25,000 minimum penalty if skipped [12] |
Otonomos's own live pricing for a Delaware LLC, pulled straight from the order page rather than a separate estimate. These are our figures at time of writing — the order page is always the source of truth [21].
| Starter Kit — get incorporated | |
|---|---|
| Registered Agent and Local Address, Incorporation, Government Fee | $495 |
| Optional add-ons | |
|---|---|
| Standalone LLC | $3,760 |
| SAFT Issuance | $7,000 |
| Hedge Fund or Feeder | $11,260 |
Starter Kit price is Otonomos's current bundled package price. Unlike the other three jurisdictions in this primer set, this Government Fee is billed one-time rather than annually — and the live Starter Kit carries no separate annual-franchise-tax line item at all. Live and current as of the numbers shown here — check otonomos.com/order/delaware-llc for today's price before quoting a client. Delaware's own statutory fees, fixed by law and separate from Otonomos pricing: $110 Certificate of Formation filing fee; optional expedite tiers Same-Day $100 / 24-Hour $50 / 2-Hour $500 / 1-Hour $1,000 [4][5].
A mandatory annual Delaware LLC tax applies to keep the entity in good standing — Otonomos is still confirming the exact current amount and due date across its own materials before stating a figure here, so this page deliberately doesn't quote one yet. Ask your Otonomos contact for the current confirmed number before budgeting for year two [6][7].
Six things worth knowing going in — the tax-honesty points especially, since this is the one US-onshore jurisdiction in the set.
Delaware won't tax an LLC with no Delaware business or Delaware-source income [6] — but that's a state-level fact only. Federally, if the LLC is "engaged in a US trade or business," a foreign owner generally has US-source effectively-connected income and real US tax and filing obligations. The offshore-jurisdiction "0% tax" pitch used elsewhere in this primer series does not transfer to a Delaware LLC [14].
A single-member Delaware LLC wholly owned by a foreign person and taxed as disregarded must file Form 5472 + a pro forma Form 1120 every year — even with zero transactions. It can't be e-filed for this filer type. Missing it carries a $25,000 minimum penalty [12]. "Disregarded" does not mean "nothing to file."
Under IRC §1446, the LLC itself must withhold tax on income allocable to foreign partners and file Forms 8804/8805/8813 — distinct from the single-member Form 5472 rule above [15].
As of FinCEN's final rule effective August 11, 2026, a domestically-formed Delaware LLC and its owners (US or non-US) have no BOI/CTA reporting obligation — that regime now targets only foreign-formed entities registering to do business in the US [10][11]. The rule changed substantially in the last 18 months and constitutional litigation is still active — worth re-checking close to formation, not treating as permanently settled [17].
A Delaware LLC with any non-US-person owner can still elect C-corp treatment, but not S-corp — IRS eligibility rules exclude nonresident aliens, partnerships and corporations as S-corp shareholders [16].
LLC membership interests aren't stock and don't qualify for Section 1202 QSBS treatment. Delaware does provide a statutory LLC-to-corporation conversion path later, so starting as an LLC doesn't foreclose this — but it's a deliberate, documented event, not a formality [19].
A sanity check against the structures most often mentioned in the same breath — including the one other Delaware vehicle in this table.
| Delaware LLC | Wyoming LLC | Classic offshore IBC (BVI/Panama-style) | Delaware C-Corp | |
|---|---|---|---|---|
| State/formation filing fee | $110 [4] | $100 | Registered-agent-mediated fee, varies | $89 minimum |
| Recurring government fee | Flat annual tax — amount being confirmed, see pricing section above [6][7] | $60/yr minimum | Often a flat fee too (Panama: $300/yr) | Franchise tax by formula, $175 min–$200,000 |
| Registered agent required? | Yes, always [1] | Yes, always | Yes, always | Yes, always |
| Owners on the public state record? | No — name + agent only [3] | No | No, typically | Directors/officers often listed |
| US federal BOI/CTA exposure | Currently exempt for a domestically-formed LLC and its owners, per FinCEN's Aug 2026 final rule [10][11] | Same as Delaware LLC | No US exposure unless it later registers to do business in a US state [10] | Same as Delaware LLC |
| Default income tax treatment | Pass-through unless elected otherwise [13] | Pass-through unless elected otherwise | No local tax on foreign-sourced profit | Entity-level 21% federal tax, then tax again on dividends |
| Tax reality for a non-US owner | Pass-through to the owner; if "engaged in a US trade or business," real US federal tax + filing obligations apply too — not a route to zero tax [14] | Same dynamic as Delaware LLC | Genuinely 0% locally on foreign-sourced profit — the classic offshore pitch | Entity-level US tax is unavoidable regardless of owner location |
| Legal/court system | Court of Chancery — specialized, no jury [8][9] | General Wyoming courts | Local courts / English-common-law-derived (BVI) | Same Chancery as Delaware LLC |
| Fit for US venture capital | Poor fit as-is — LLC interests don't qualify for QSBS [19] | Same limitation | Not typically used for US VC rounds | Purpose-built for this |
BVI/Panama figures per Otonomos's own sibling primers. This is the only jurisdiction in the Otonomos primer set that is US onshore rather than a classic offshore structure — the tax-reality row above is the load-bearing difference.
The paperwork above is real. What we've automated is the part where you'd normally chase it yourself.
Identity documents and the EIN application — including the phone/fax/mail path required for non-US applicants — handled through the Otonomos dashboard.
A starting-point template for the one document that actually controls your LLC, since Delaware itself never sees it.
Form 5472 (if applicable) and your annual state tax deadline tracked against your entity, not left for you to calendar yourself.
The order page has the live pricing, add-ons and checkout — this page was just the homework.
No. There's no citizenship or residency requirement for members, managers or organizers. The one mandatory in-state requirement is the registered agent, precisely so the state has someone to serve process on regardless of where you live [1].
No. Delaware itself won't tax the LLC if it does no Delaware business [6], but by default it's a pass-through entity: its income is taxed to you wherever you're tax-resident, and if the LLC is engaged in a US trade or business, you'll generally owe US federal tax on the US-connected share too. This is a genuinely different pitch from a classic offshore IBC's 0%-on-foreign-profits structure [14].
Not on Delaware's own Certificate of Formation — that asks only for the LLC's name and registered agent [3]. At the federal level, as of FinCEN's August 2026 rule, a domestically-formed LLC currently has no BOI reporting obligation at all. This area has changed a lot recently, so it's worth reconfirming close to when you actually form [10][11].
If you're the sole owner, you're a foreign (non-US) person, and the LLC is taxed as disregarded, yes — you must file Form 5472 with a pro forma Form 1120 every year, even with zero transactions. Missing it carries a minimum $25,000 penalty. It's one of the most commonly missed obligations for foreign-owned single-member LLCs [12].
Yes — Delaware provides a statutory conversion process (Certificate of Conversion + new Certificate of Incorporation) that carries assets, liabilities and contracts over without re-papering everything from scratch [19].
A mandatory annual Delaware LLC tax plus your registered agent's own fee. Otonomos is confirming the exact current amount and due date across its own materials before quoting one here — ask your Otonomos contact for today's figure. No annual report is required for LLCs [6].