Why this question is almost always asked the wrong way
When someone asks "Delaware or Florida," what they really mean is "where will my company look more credible and pay less tax." But the state of formation answers a different question — which corporate law the company lives under and which state it pays annual fees to. For a typical non-resident, credibility and taxes are not decided by that.
So let's separate two layers right away. There is the choice of state — that is about law, filing fees and annual upkeep. And there is the tax burden — that is about where your income and presence are. People constantly conflate the two, and that confusion is exactly why Delaware and Florida collect so many myths. We'll start with an honest cost comparison, then unpack what sits behind it.
Delaware vs Florida: what the numbers show
Put the two states side by side and the main lines look roughly like this. The figures are rounded and given as a guide — states revise them periodically, so always confirm them on that state's Secretary of State site before filing.
| Item | Delaware | Florida |
|---|---|---|
| LLC formation | ≈ $90 | ≈ $125 |
| Annual payment | $300 (franchise tax) | ≈ $139 (annual report) |
| State sales tax | none | yes (≈ 6%) |
| Owner disclosure | name not in the register | name in the register |
| Registered agent | required | required |
| Investor reputation | highest (C-Corp) | local / business |
The first thing that stands out: on annual upkeep, Delaware costs more. An LLC pays the $300 franchise tax every year whether or not it earned anything. Florida charges less but requires an annual report with the owner's name on the public record. Right there you can see that "cheaper" and "more private" are not the same state, and you'll have to decide which matters more.
The second is reputation. Delaware really is the leader — but the leader in one very specific niche: venture deals and C-Corps. For an operating LLC that weight barely converts into any practical benefit. Which means it isn't worth overpaying for out of habit.
What Delaware is actually built for
Delaware's reputation didn't come from nowhere. The state has the country's best-developed corporate law, a dedicated business court (the Court of Chancery), and decades of precedent. All of that is critical when venture funds come into a company, founders split equity, and share classes get issued. That's exactly why funds and accelerators almost always ask for a Delaware C-Corp — not an LLC, specifically a corporation.
Now, honestly: how many of the non-residents asking "Delaware or Florida for an LLC" are actually raising venture money? A handful. The rest run online services, consulting, an agency, e-commerce — and they will never once need the Court of Chancery's case law. For them Delaware is prestige they pay $300 a year for, and they get exactly the same operating reality as in any other state.
I've unpacked that gap between reputation and usefulness in a separate piece on why Delaware is more often a myth than a deliberate choice. In short: Delaware is justified when you're going in for investment and a corporation. In every other case people pick it out of habit. What an LLC in this state actually gives you, I laid out in the Delaware LLC guide for non-residents.
A simple rule. Planning to bring investors into the cap table and raise rounds — you most likely need a Delaware C-Corp, not a Delaware LLC, and that's a separate conversation. Running an ordinary operating business — Delaware prestige adds nothing for you, while the franchise tax does.
When Florida is a sensible choice
Florida works on a different logic. Its strength isn't corporate law — it's real presence. Florida makes sense when the owner is physically tied to it: lives there part of the year, buys real estate, keeps a warehouse, hires people, serves local customers. For someone relocating to the US or already wintering in Florida, forming the company there is logical: the state matches the place the business actually happens.
The absence of a state personal income tax plays a role here too — but precisely for the person who lives in Florida and earns income there. For a non-resident who has never set foot in the US, that break is abstract: it's about a state resident's personal tax, not about their LLC. What a Florida company offers and who it suits, I laid out in the Florida LLC guide for non-residents.
In other words, Florida is a "by location" choice. If the Florida presence is there, it's convenient and banks understand it. If it isn't, and you're taking the state just "because there's no tax," you're buying a break you won't be able to use.
The tax myth that drives blind choices
The most persistent argument in this debate is the tax one. "I'll take Florida, no tax there" or "Delaware is a tax haven." Both claims are almost always off the mark for a non-resident, and here's why.
Federal obligations don't depend on the state at all. A foreign-owned company gets an EIN and files Form 5472 together with a pro forma 1120 the same way — in Delaware, in Florida, anywhere. Neither of these two states removes that work.
And state tax arises not from where you're registered but from where your income and presence are. A non-resident selling online with no US office, warehouse or staff usually generates no state-sourced income — and then Florida's "zero rate" saves nothing, because there'd be nothing to pay anyway. Where exactly that line runs, I covered in the piece on whether a non-resident owes US taxes. The takeaway is simple: choosing between Delaware and Florida is about the company's upkeep, not the size of your tax.
"Delaware LLC, but I work in Florida" — the double-cost trap
This scenario deserves its own section, because it hits your wallet directly. Someone forms the company in Delaware "for the reputation," but actually lives or works in Florida — that's where their home, their customers, and sometimes a warehouse are. And it turns out Florida treats that company as out-of-state and requires it to register there separately — this is called foreign qualification.
The result: you pay a registered agent and fees in both Delaware and Florida, file in two states, and carry Delaware's franchise tax on top. Instead of savings — double upkeep for the very same single company. That's why "register in the fancy state, work in my own" is almost always more expensive than forming where the business actually sits.
Presence matters more than the state's name. Obligations arise not where the registration sounds nicer, but where the company has a real office, warehouse, staff or customers. This is called nexus, and it drives both the second registration and sales tax. Before arguing Delaware vs Florida, it's worth reading the breakdown of nexus and presence across several states — you save more on that question than on any difference in filing fees.
Not sure which state fits your case — Delaware, Florida, or a third one entirely?
On a consultation we'll go through your model: online or with a US footprint, investors or not, where your customers and bank are. And we'll tell you honestly where you'd overpay for reputation and where you'd save. If we decide to register — we set up the LLC and EIN end to end for your exact scenario.
So Delaware or Florida — honestly
Put it all together and the honest answer depends on your profile, not on a ranking of states. People take Delaware when investment and a corporation are ahead — then its law and reputation genuinely work. People take Florida when there's a real tie to the state: a home, real estate, a warehouse, local customers. In those two cases the choice is obvious and justified.
But if you're a non-resident with no US presence at all and simply want a working company for an online business — then both Delaware and Florida are usually overkill for you. Delaware adds the franchise tax, Florida adds owner disclosure, and neither delivers what it's usually taken for. In that scenario it's cheaper and calmer to keep the company in a state with no annual report: I wrote about that in the piece on the cheapest state for a non-resident LLC. And if you want to work through the choice systematically across every axis — bank, privacy, presence, price — there's a full guide on how to choose a state to register a US company.
How we settle this with a client
When someone comes in asking "Delaware or Florida," we don't answer with a state name off the bat. First we find out what the business is and where it's headed: will there be investors, is there or will there be a US presence, where are the customers, is a bank needed right now. And it almost always turns out the real choice isn't between these two states.
One person needs Delaware, but as a C-Corp, because they're aiming for an accelerator. Another needs Florida, because they're genuinely moving to Miami. A third, who just runs consulting from Tbilisi, needs neither, and calmly saves on upkeep in a simpler state. I look at this both as a CPA and as the person who later keeps these companies' books: a structure chosen for reputation rather than for the task almost always resurfaces as extra costs a year later.
We don't sell "schemes" and we don't promise to bend the rules. For an owner from the CIS, who already goes through enhanced checks, what matters most is a clean, clear structure — one that matches the reality of the business. Delaware or Florida is a good question, but the right answer starts not with a state's name, but with what you actually plan to do.
Frequently asked questions
Delaware or Florida — which is better for a non-resident LLC?
For a non-resident with no US presence, both states are usually overkill. Delaware is justified for investment and a C-Corp, Florida when there's a real tie to the state. Without either, it's simpler to keep the company in a state with no annual report.
Is it true that Delaware and Florida have no taxes?
Florida has no state income tax but does charge a sales tax (≈6%). Delaware is the opposite — no sales tax, but a state income tax plus a franchise tax on the LLC (around $300 a year). Federal obligations — an EIN and Form 5472 — are the same everywhere and don't depend on the state.
Can I register an LLC in Delaware but do business in Florida?
You can, but then Florida will require you to register the company there as out-of-state. You end up paying fees and an agent in two states and filing twice. It's better to form the company where it has a real presence.
When does a non-resident actually need Delaware?
When venture investment or bringing investors into the cap table is ahead — then you almost always need a Delaware C-Corp. For an ordinary operating LLC, Delaware prestige gives no benefit and adds the franchise tax.