US LLC: costs and ongoing obligations

If you go by a certain kind of video, a US LLC costs “300 dollars, once, done.” The truth is duller: a small formation fee, then a handful of modest but repeating charges — and, for anyone who owns the company from Germany, a federal reporting obligation towards the IRS that turns into the single most expensive line item the moment you overlook it.

What follows sorts everything into two piles — the first year and every year after — points out the duties that nobody advertises, and locates the 25,000-dollar trap precisely.

Stated plainly at the top: this is information, not legal or tax advice. Deadlines and amounts shift — Delaware raised its annual tax only recently, details below — and no two situations match. Every number in this piece rests on a primary source; verify them yourself before acting, and bring in licensed advisers. The rest of the series is collected in the Emigration section.

Two buckets: setting up versus keeping alive

Sorting the costs into two categories from the outset makes everything clearer:

1. One-off, at formation: the state’s fee for the articles of organization, typically plus the first twelve months of a registered agent.
2. Every year thereafter: the agent again, the state’s annual report or annual tax, and — for owners outside the US — the preparation of the IRS filing plus whatever bookkeeping feeds it.

The standard error is to price only the first bucket. Setting up is genuinely cheap. Holding the structure is where the money goes — and neglecting the filings is where it goes fastest.

What the states charge for formation

In the states people actually pick for an LLC, the pure filing is inexpensive. The figures come straight from the fee schedules and statutes:

• Wyoming: formation costs 100 USD (Wyoming SOS, Business Fees)
• Delaware: the statute sets 70 USD for the certificate of formation (§ 18-1105(a)(3), Delaware Code, Title 6). You will see larger Delaware numbers elsewhere — those bundle in certified copies and expedited processing, priced per provider and per option. Since no single honest figure exists for the extras, we cite what the law demands and leave the add-ons where they live: on your provider’s quote.
• New Mexico: 50 USD — the statute literally says “fifty dollars ($50.00)” for filing the original articles of organization (NMSA § 53-19-63)

Picking the right state is a question of its own — covered in which US state for the LLC. For the cost question, one takeaway suffices: the filing fee is the smallest number on the entire invoice.

No LLC without a registered agent

Every state requires each LLC to maintain a registered agent — someone with a physical in-state address who receives official correspondence and service of process. Living abroad, you cannot fill that role yourself, so a commercial agent becomes a practical necessity. (Our German edition carries a dedicated registered-agent piece; the English translation is in the works.)

Published price lists span roughly 50 to 300 US dollars per year. The spread has nothing to do with the core legal function — receiving letters is receiving letters — and everything to do with what surrounds it: an address that passes as a business address, scanned mail, international forwarding, deadline reminders. At the bottom of the range you get a nameplate on a mailbox; at the top, an address a bank will actually accept. For a non-resident owner, that last distinction is the one that justifies paying more, since a bare agent address is precisely where account applications fail.

A caveat we will state once and let stand for the whole article: that range is an orientation drawn from public price lists, not a market study of ours. Wherever we lack a solid number in this piece — this range, and the tax preparer’s fee later on — we admit it and print none. The single hard figure we can vouch for is the price of our own formation package, further down.

More decisive than the amount itself: the agent renews every year. Let the renewal lapse and the LLC can end up agentless — and with that, out of good standing.

Annual report, annual tax: what the states collect each year

This is where the states diverge — and where 2026 brought a change that most published overviews still miss.

• Wyoming: an annual report with a licence tax attached, at least 60 USD per year, payable on the first day of the month in which the LLC was formed. The underlying formula charges 0.0002 USD per USD of assets located and employed in Wyoming, with the 60-dollar floor as minimum. A one-person LLC holding nothing in Wyoming pays the floor, every year (Wyoming SOS, Business Fees).
• Delaware: LLCs file no annual report but owe a flat annual tax, due each 1 June for the prior calendar year. You will find both 300 and 400 dollars quoted — and each is right for its own tax year, which deserves a moment, because it is the number people currently trip over. House Bill 400, signed 21 May 2026, lifted the tax from 300 to 400 dollars, effective — per the bill’s synopsis — from 1 January 2026. The statute already shows the higher figure: § 18-1107(b) of the Delaware Code states that every domestic LLC “shall pay an annual tax … in the amount of $400.” The agency’s own instruction page still says 300 — and that too is accurate, thanks to the one-year offset: what was collected on 1 June 2026 covered tax year 2025, before the raise took hold. The first bill at 400 USD arrives 1 June 2027, for tax year 2026. In short: the statute carries the new rate, the agency page the last-billed one, and anyone forming now should plan with 400. Pay late and Delaware adds 200 USD plus 1.5 per cent interest monthly (Delaware Division of Corporations).
• New Mexico: no annual report, no recurring state fee.

By that measure New Mexico appears to be the cheapest state to hold. The impression does not survive contact with the federal level — next section.

The numbers side by side: year one and after

The table restricts itself to state-level costs (agent shown as a market range; federal duties and German tax excluded). Everything in USD.

Position	Wyoming	Delaware	New Mexico
Formation filing (once)	100	70 by statute (extras optional)	50
Agent, first year	~50–300	~50–300	~50–300
First year, state level	~150–400	~120–370 plus extras	~100–350
Report / annual tax (recurring)	from 60	400 (tax year 2026 onward)	0
Agent (recurring)	~50–300	~50–300	~50–300
Each later year, state level	~110–360	~450–700	~50–300

The agent columns stay deliberately broad — provider choice dominates them. Due dates: Wyoming ties to the formation anniversary month, Delaware fixes 1 June. Confirm every figure and date at the source before money leaves your account.

What our own formation actually cost

Fee tables and bank statements rarely agree, so here is one real transaction instead of another estimate: the publisher of this magazine formed a Wyoming LLC through a formation service in 2026, at a package price of 599 euros. From his account of it: paid on a Wednesday, and the completed formation documents sat in his inbox a few days later — measured against a German GmbH formation, in his words, absurdly fast.

Setting that 599 next to the table is the real lesson. The state’s share inside the package is 100 US dollars; everything else is service — agent, paperwork, handling. You can handle all of it yourself and pay far less, or knowingly buy your way out of dealing with US agency forms. Either choice is defensible. What hurts is only carrying the 100-dollar YouTube number in your head and then opening a three-figure invoice.

One thing the package expressly did not include, although he had wanted it: the US business account. That he had to arrange on his own — via Revolut, where he already held an account, and after an unusually strict review in which he had to lay out his sales model in detail. Which matches the recurring theme of this series: formation is the trivial step, banking is the project. More in the article on the US bank account.

And the limits of that figure belong in the same paragraph: one case, one provider, one moment in time. 599 euros is a data point, not a market price. Other services charge less or more, and a do-it-yourself filer pays the state fee and nothing beyond it.

The item everyone forgets: the annual IRS filing

Here comes the part that most cost breakdowns omit completely. A foreign-owned single-member LLC — one owner, not a US tax resident, disregarded entity for US purposes — is nonetheless a filer in the eyes of the IRS. For this specific duty it is treated as if it were a corporation, and it must submit Form 5472 attached to a pro forma Form 1120, every single year — even with zero revenue and zero profit, as long as reportable transactions occurred.

That final condition is where a popular oversimplification sneaks in. Many texts flatly claim that “paying in the formation capital already creates the duty.” Transfers between owner and company — contributions in, distributions out — are indeed the archetypal reportable transactions, which is exactly why a revenue-free LLC usually still has to file. But whether a specific LLC in a specific year truly had one depends on what actually moved through the accounts; a shell that merely exists on a register, with no owner-company flows whatsoever, is a different and disputed constellation. The working assumption should be: you will file, and you will have it checked — but do not adopt “contribution equals duty” from us as an iron law.

What is not disputed is the penalty, and the IRS instructions leave no room:

“A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due.”

That means 25,000 US dollars, per filing company, per tax year (IRS, Instructions for Form 5472).

The escalation mechanics get misreported constantly, so here they are exactly: the penalty does not multiply on its own with the passage of time. The clock only starts once the IRS has issued a notice and 90 further days elapse without a filing. After that, an additional 25,000 US dollars accrue per affected related party for each 30-day period begun. Before any notice exists, the exposure stays at 25,000 per company and year.

One more clarification, because “per related party” confuses solo founders: a related party is not a co-shareholder. In a typical single-member setup, the related party is you — the foreign owner on the other side of the company’s transactions. The escalation therefore needs no second member; a one-person LLC sits fully inside its reach. It remains the number that makes every state-fee comparison irrelevant — but it is not a meter ticking automatically, and we will not pretend it is.

Two practical points worth knowing before you form: this filing cannot go in electronically — it travels by post or fax to a specific IRS address in Ogden, Utah. And the pro forma Form 1120 needs only name, address and a few fields filled in; it exists solely as the carrier sheet for the attached 5472.

None of this is hypothetical. It is the actual reason the structure carries running costs: hardly anyone gets 5472 plus 1120 right unaided, so in practice most owners engage a US tax preparer — and as noted above, we print no fee for that because we hold no reliable one. What we can describe is what moves it: how many reportable transactions there were, whether the books arrive tidy or as a shoebox of receipts, and whether the preparer regularly handles non-resident clients. Only the direction is beyond doubt: this position, not the 100-dollar state filing, is what makes an LLC costly to keep. Obtain a fixed quote before forming, not afterwards.

Which also deflates the apparent New Mexico advantage. Whether your state wants 0 or 400 dollars a year barely registers next to a preparer’s invoice and a five-figure penalty risk.

And the point that outranks everything else on this page: German taxation is its own, separate cost block — and for a reader living in Germany it is normally the largest of all. It deserves more than a footnote, so briefly, the substance.

A US LLC does not make anyone tax-free. Germany ignores how the US classifies your company and performs its own type comparison, asking whether the LLC as actually configured looks more like a German corporation or a partnership. The controlling administrative guidance is the Federal Ministry of Finance letter of 19 March 2004 (IV B 4 - S 1301 USA - 22/04, Federal Tax Gazette I 2004, 411); the Federal Fiscal Court worked through its criteria in the decision of 18 May 2021 (I B 75/20) and treated a Colorado LLC as a corporation.

Two consequences, both expensive. First, the classification is not your choice: the court found the LLC’s transparent US treatment irrelevant to the German analysis, and the number of members equally so. An entity the IRS disregards can still be a corporation from Germany’s perspective — in which case distributions to the sole member are taxable investment income. Second, you are then feeding two systems with incompatible logic simultaneously, which is precisely why German advisory fees typically dwarf every line in the table above. Where your own case lands is exactly what a Steuerberater exists to answer; the honest budget entry reads “advice before formation”, not a number.

Bookkeeping: the item that never announces itself

Form 5472 cannot be completed without a clean record of the reportable transactions — which means bookkeeping, however simple. Even a low-activity LLC generates continuous work: gathering receipts, documenting inflows and outflows, packaging the year for the preparer. And the moment a German tax return references the LLC, the figures have to be clean twice over anyway.

BOI/FinCEN: for now a relief, not an expense

Beneficial Ownership Information (BOI) reporting to FinCEN spread uncertainty for a while; the situation has since relaxed. Under the Interim Final Rule effective 26 March 2025, US-formed companies and US persons are exempt from BOI reporting; in essence, only entities formed abroad and registered to do business in a US state remain reporting companies (FinCEN, BOI).

For the typical LLC formed in a US state, that currently translates to no BOI cost and no ongoing BOI workload. As of our review in July 2026 the interim final rule still governed and the final rule was pending. It remains a transitional state — challenges and revisions are conceivable, so verify the current position at FinCEN before building on it. (Our German edition carries a dedicated compliance piece; the English version is in preparation.)

What sliding on the US duties actually costs

Neglect the small state payments and you face administrative penalties first, loss of good standing at worst — Delaware’s 200 USD plus 1.5 per cent monthly is representative. Usually recoverable.

The federal filing duty is the dangerous terrain: a missed Form 5472 starts, per the IRS, at 25,000 USD per company and tax year, growing if the failure persists after notice. Hold that figure against the “300 dollars once” you were budgeting.

The honest bottom line

For a single-member LLC with a foreign owner, the arithmetic runs roughly like this:

• First year: state filing plus first agent year (around 100 to 410 USD depending on the state) or a service package in the low three-figure euro range, plus the IRS filing covering the formation year, plus the EIN — which the IRS hands out for free, however happily providers invoice for it.
• Every later year: agent plus report or annual tax (roughly 50 to 700 USD at state level, depending on the state) plus the yearly IRS filing plus bookkeeping plus — as its own block — the German tax side.

Orders of magnitude, not quotes. Which is precisely the argument for calculating the total over several years before forming, and for planning the federal and German layers from day one rather than just the 100-dollar filing. To borrow the publisher’s sigh from his own formation: as an entrepreneur today you have to stretch across so many fields and absorb so much that it can turn your stomach — and whoever treats a US LLC as a savings scheme has, as a rule, stopped reading the invoice after line one.