Non-US founders default to Delaware out of habit, but for Web3 companies that habit is expensive. Wyoming was built with crypto in mind, and for founders operating outside the United States it beats Delaware on cost, structure, and privacy.
The tax difference is not small
Every foreign owner of a US single-member LLC has to file IRS Form 5472, no matter which state you pick. Skip it and the penalty is steep. That part is unavoidable.
What changes by state is what you pay on top of that federal requirement. Delaware charges an annual franchise tax. For LLCs it’s a flat fee, but for corporations it’s calculated off share count or asset value, and founders who authorize too many shares without knowing the formula can end up with unexpectedly large bills, then have to go back and recalculate.
Wyoming has no franchise tax. Instead there’s a modest flat annual report license tax for most holding companies, plus no state income tax. For a founder running a company from Berlin or Singapore, that’s one predictable line item instead of a calculation you need an accountant to check.
The DAO LLC fits how these teams actually work
Most international Web3 projects don’t have a headquarters. Developers in Poland, community leads in the Philippines, treasury signers in Canada. Delaware’s corporate model, with its Board of Directors requirement, doesn’t map onto that.
Wyoming’s DAO LLC supplement does. It lets the DAO act as a legal wrapper: contracting with vendors, opening bank accounts, paying taxes, while governance stays on-chain. Wyoming is also the only state that recognizes “algorithmically managed” governance, meaning the smart contract itself can be the legally recognized decision-maker instead of a human board.
Without that wrapper, a DAO is usually treated as a general partnership, which means every token holder can be personally liable for the DAO’s actions. The LLC structure puts a liability shield around the code.
Privacy matters more than people think
For founders in unstable jurisdictions, privacy isn’t a luxury, it’s operational security. Delaware requires public disclosure of a “Communications Contact,” and its high volume of corporate litigation means beneficial ownership data gets subpoenaed and scrutinized often.
Wyoming doesn’t list LLC members or managers in its public database, only the registered agent’s address. It doesn’t share ownership data internationally unless compelled by a federal subpoena or an IRS investigation, and founders can appoint a registered agent as organizer so their own name never touches the Articles of Organization.
The federal reporting picture changed in 2025, and it changed in a way that matters specifically to founders outside the United States. A FinCEN interim final rule issued on 26 March 2025 exempts every entity created in the United States, and their beneficial owners, from beneficial ownership reporting under the Corporate Transparency Act. A Wyoming LLC is created in the United States, so it does not file. What remains a reporting company is an entity formed under the law of a foreign country that registers to do business in a US state, so a founder who forms in Wyoming is outside the regime while the same founder who registers an existing offshore company here is inside it. Wyoming shields you from competitors, criminals, and the public, and the federal filing that used to sit alongside that no longer applies to the entity itself.
When Delaware still makes sense
If you’re raising a Series A from a traditional Silicon Valley VC, Delaware C-Corps are still what they’ll expect. But for the bootstrapped majority, whether you’re launching a token, running a DAO, or just need a US entity for billing and liability protection, Wyoming gets you the same US banking access and credibility with lower carrying costs and a legal framework that was actually written with crypto in mind. Getting the formation, the operating agreement, and the ongoing federal compliance right from a non-US base is the part worth handing to a firm that does it end to end, which is where entity formation and titling comes in.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
Related reading: Wyoming and Delaware measured against five tests.
