19 Cheapest States to Form an LLC in 2025

Starting a business can be exciting, but the costs can add up quickly if you choose the wrong or expensive state, especially if you’re a non-US resident.

If you’re looking to save money, you might want to consider the cheapest states to form your LLC. While there are better LLC states, that doesn’t necessarily mean they’re the cheapest.

I will explain more about this later.

In this article, I will list and show the most affordable states (with the lowest filing fees) to form your LLC in the United States. Plus, their annual report fee.

19 Cheapest States for LLC Formation

Here are 19 states where you can start your LLC on a budget.

Cheap State	LLC Filing Fee	LLC Annual Report Fee
Kentucky	$40	$15
Mississippi	$50	$0
Arkansas	$45	$150
Colorado	$50	$10
New Mexico	$50	$0
Michigan	$50	$25
Indiana	$90	$50
Arizona	$50	$0
Georgia	$100	$50
Hawaii	$50	$15
Idaho	$100	$0
Louisiana	$100	$30
Missouri	$50	$0
Montana	$70	$20
Oklahoma	$100	$25
Utah	$70	$20
South Carolina	$110	$25
Wyoming	$100	$50
Virginia	$100	$50

As you can see, Kentucky is the most affordable choice, with a low filing fee of just $40 and an annual report fee of $15.

However, if you’re looking for states where you do NOT need to pay an annual LLC report fee, consider Arizona, Mississippi, Missouri, Idaho, New Mexico, and Ohio.

Let’s explore each state and what it’s like to have your business incorporated there.

1. State of Kentucky: $40

Kentucky is the cheapest state in which to form an LLC. The filing fee is only $40, making it an attractive option for many business owners looking to save on initial filing fees.

Kentucky offers an affordable setup fee and a low annual report fee of $15 to maintain your LLC status yearly, which is kind of sweet, too.

2. State of Mississippi: $50

Mississippi is an affordable option for forming an LLC. The initial filing fee is just $50. This covers the Certificate of Formation, the main document to establish your company.

In addition to the low startup costs, Mississippi has minimal ongoing fees. You would also need to pay an annual report fee, which is very low compared to other states. The fee for filing your annual report in Mississippi is $25.

You must submit your formation documents to the Mississippi Secretary of State to get started. This process is straightforward and does not require extensive paperwork.

3. State of Arkansas: $50

Arkansas is one of the most affordable states in which to file an LLC. The filing fee is just $45 or $50 if you prefer to file by mail. When submitted online, it is one of the country’s cheapest options.

Additionally, Arkansas requires an annual franchise tax of only $150, which is relatively low compared to other states. With minimal costs and straightforward filing, Arkansas is attractive for entrepreneurs looking to save on LLC formation and maintenance.

4. State of Colorado: $50

Colorado is another budget-friendly state for forming your LLC. The filing fee is just $50, one of the lowest in the U.S. The state also requires an annual report filing, known as the periodic report, which costs $10. This makes Colorado affordable for creating an LLC and easy to maintain with minimal ongoing costs.

5. State of New Mexico: $50

As one of my favorite LLC states, New Mexico is an attractive option for forming an LLC, especially if you’d like to keep your business private – they’re solid regarding anonymity. The initial filing fee here is just $50, making it one of the cheapest states for this purpose.

The state stands out for its business-friendly environment.

You don’t have to worry about annual fees, as New Mexico has $0 annual report fees. This can save you money over time compared to other states.

6. State of Michigan: $50

Michigan is a great option for affordable LLC formation. The state’s LLC filing fee is $50, making it a more cost-effective state for new business owners.

In addition to the low formation cost, Michigan does not require an annual report for LLCs, but there is an annual statement filing fee of $25, keeping ongoing expenses manageable. With its low startup and maintenance fees, Michigan is an attractive choice for entrepreneurs looking to minimize costs when forming an LLC.

7. State of Indiana: $95

Indiana is one of the cheapest states for forming an LLC, with a filing fee of just $95. This fee applies when you submit your LLC’s Articles of Organization online to the Indiana Secretary of State.

Choosing Indiana means you enjoy lower startup costs compared to states like California. This makes it an attractive option for new business owners looking to save money.

In addition to the initial filing fee, you’ll need to pay an annual report fee. In Indiana, this fee is $50 every year. By keeping costs low, you can focus more on growing your business rather than worrying about high fees.

8. State of Arizona: $50

Arizona is one of the cheapest states to form an LLC, with a filing fee of just $50. On top of that, Arizona doesn’t have an annual report requirement, so you won’t be hit with recurring fees each year to keep your LLC active, which is a huge plus for small business owners.

Remember that Arizona requires you to publish a notice of your LLC formation in a local newspaper for three consecutive weeks, which can add some extra cost, depending on the county where you’re filing. Despite that, Arizona’s low filing fee and lack of annual report fees make it a solid option for starting your LLC.

9. State of Georgia: $100

Forming an LLC in Georgia is quite affordable. The primary cost to set up your LLC is $100, which is also the fee to file your Articles of Organization online through the Georgia Corporations Division.

In addition to the initial setup cost, there is an annual report fee of $50 per year. You need to file this report to keep your LLC in good standing.

Remember that, just as in other states, Georgia requires you to appoint a registered agent, but you can serve as your own agent if you have a physical address.

10. State of Hawaii: $50

Hawaii offers a very affordable option for forming an LLC with a fee of only $50. This low cost makes it an attractive choice for many business owners.

When you submit your Articles of Organization, the official document creating your LLC, you pay the filing fee to the Hawaii Department of Commerce and Consumer Affairs.

In addition to the formation fee, you’ll want to note the cost of the annual report. In Hawaii, the annual report fee is $15 each year. This is a basic requirement to keep your LLC in good standing.

Creating an LLC in Hawaii offers low initial costs and a beautiful location for your business operations.

11. State of Idaho: $100

Idaho stands out as one of the cheaper states to form an LLC. The initial filing fee is $100, which is competitive compared to many other states. When you file online, this is the total cost you’ll pay to start your LLC. It’s a straightforward and affordable option for entrepreneurs.

In addition to the startup fee, you should be aware of the annual report fee, which is also $100 when filed online. This keeps annual costs manageable.

Idaho doesn’t just have low costs for initial setup. There are no extra charges for dissolving your LLC or for filing annual reports when done online.

12. State of Louisiana: $100

Louisiana is another affordable choice if you’re considering forming an LLC. The cost to start an LLC here is just $100. This is the fee for filing the Articles of Organization with the Louisiana Secretary of State.

You can easily file this online, which makes the process quick and straightforward. This one-time fee is all you need to create your Louisiana LLC officially.

In addition to the initial cost, it’s good to know about the annual report fee. In Louisiana, you’ll pay $30 annually to maintain your LLC. This is lower than in many other states, making it a budget-friendly option.

13. State of Missouri: $50

Missouri is an affordable option for forming an LLC. The one-time filing fee is just $50 when you apply online. This fee makes it easy to get your business started without a large financial burden.

An added benefit is the annual report fee, which costs $0. This means you do not have to worry about annual fees to keep your LLC active in the state. Many states charge recurring costs, but Missouri stands out with its free annual reporting.

14. State of Montana: $70

Montana is an affordable state for forming an LLC, with a filing fee of $70 or filing the Articles of Organization. One of the perks of Montana is that there’s no annual report fee, meaning you won’t have to worry about yearly charges to keep your LLC active.

15. State of Oklahoma: $100

Oklahoma is a great option if you’re looking to form an LLC without breaking the bank. The total cost to set up your LLC is around $100, making it one of the more affordable states for business formation.

In addition to the setup costs, you’ll need to think about ongoing fees. For Oklahoma, you have to file an annual certificate, which is $25 each year.

16. State of Utah: $70

Utah is an attractive option for forming an LLC because of its low initial filing fee. You can register your LLC in Utah for just $70. This is among the more affordable fees compared to many other states.

In addition to the filing fee, Utah also has a reasonable annual report fee. Each year, you will need to pay $20 to keep your LLC in good standing. This keeps your business compliant without a hefty financial burden.

17. State of South Carolina: $110

If you’re looking to form an LLC, South Carolina stands out with a registration fee of $110. This cost is for filing the Articles of Organization with the Secretary of State.

The process is straightforward in South Carolina. Once you submit your Articles of Organization, the state will review your application. Approval creates your LLC, allowing you to operate legally.

Another factor to consider is the cheap annual report fee, which is $25. This fee is due every year to keep your LLC in good standing. The low costs for both formation and maintenance make South Carolina appealing for entrepreneurs.

18. State of Wyoming: $100

Wyoming is one of the best states to form an LLC, and it’s also affordable, with a filing fee of $100. The state requires an annual report, but the fee is relatively low, starting at $60 based on the value of your business assets in Wyoming.

What makes Wyoming stand out is the combination of low costs and strong privacy protections.

Like New Mexico, Wyoming also offers anonymity for LLC owners, meaning your personal information doesn’t have to appear in public records. Additionally, there’s no state income tax, making it an excellent choice for international entrepreneurs looking to minimize tax burdens.

19. State of Virginia: $100

Forming an LLC in Virginia is affordable, with a one-time filing fee of $100. This makes it one of the cheaper options for starting your business. You must file the Articles of Organization with the Virginia State Corporation Commission. This document officially registers your LLC.

In addition to the filing fee, Virginia requires an annual report fee of $50. This fee helps keep your business in good standing each year.

Recommended read: LLC Filing and Annual Fees By State

Should You Choose a State Based on How Cheap It Is?

In my opinion, choosing a state for your Limited Liability Company based solely on low fees or costs isn’t always the best approach.

While formation fees matter, other factors play a big role in your LLC’s success.

First, let’s talk about formation fees. States like Kentucky have low registration fees, starting at just $40. But it’s important to look beyond the initial costs. For example, while Nevada (one of the business-friendly states) has relatively low formation fees, it also has higher annual fees and taxes, which can add up over time.

Taxes can significantly affect your business. Some states, like Wyoming, have low formation fees and no state income tax, which can be a BIG advantage. On the other hand, states like California have high state taxes that can lead to higher costs over time, even if their formation fees are reasonable.

Taxes aside, you should also consider annual costs.

Different states have varying fees for maintaining an LLC each year. These fees include annual reports and franchise taxes, which can really add up. A business-friendly environment matters, too!

For instance, Delaware has an annual franchise tax, while states like Arizona have lower annual fees and no franchise tax, making it cheaper to maintain your LLC over time.

LLC privacy is another factor to consider.

States like New Mexico and Wyoming offer more privacy protections for business owners than the other 48 states – allowing you to keep your personal information off public records. Additionally, check the type of paperwork required. States with less paperwork hassle can save you time and money.

Finally, consider the state policies. Each state has different rules that can impact how you operate your business. For example, Texas has favorable business policies, including no state income tax and a relatively simple regulatory environment.

Which is the Best State to Form an LLC for Tax Purposes?

Tax benefits can play a big role in forming an LLC. Here are some LLC states known for favorable tax conditions:

State	State Income Tax	Corporate Income Tax	Franchise Tax	Sales Tax
Wyoming	None	None	None	None
Nevada	None	None	None	None
South Dakota	None	None	None	None
Texas	None	None	Yes (Low)	Yes
Florida	None	Yes (Low)	None	Yes
Delaware	None (for out-of-state income)	Yes (Low)	Yes ($300)	None

Most of these states attract businesses because they lack personal income tax and a low overall tax burden. This can lead to significant savings, especially for new businesses.

Wyoming is the overall favorite for entrepreneurs because it has no state income tax, corporate income tax, or franchise tax, making it very cost-effective. Similarly, Nevada offers no state income tax, corporate income tax, or franchise tax, plus strong privacy protections and a business-friendly environment.

South Dakota also has no state income tax, corporate income tax, or franchise tax, and its annual fees are low.

Texas is appealing due to its lack of state income tax. While it has a franchise tax, it’s relatively low and only applies to businesses with higher revenues. Texas does have a sales tax, which businesses should consider.

Florida benefits LLC owners by having no state income tax on individuals and a relatively low corporate income tax but no franchise tax.

Finally, Delaware is known for its business-friendly legal environment and strong privacy protections. It doesn’t tax income earned outside the state but does have a low corporate income tax and a $300 annual franchise tax. Delaware’s Court of Chancery is highly regarded for its corporate law expertise and stable legal framework.

Also read: Why is Delaware the Best State to Form an LLC?

Frequently Asked Questions

Which states are the most expensive in which to form an LLC?

California and Massachusetts are typically the most expensive states in which to form an LLC. California imposes a minimum franchise tax of $800 annually and higher filing fees. Massachusetts also has relatively high filing costs and significant annual report fees.

Which state has the lowest tax for LLCs?

Wyoming has the lowest tax on LLCs. Due to its minimal tax burden, Wyoming is considered a tax haven for businesses, including no state corporate or personal income tax.

What is the best state for a non-resident to form an LLC?

Non-residents often choose to form LLCs in states like New Mexico or Wyoming. Both states offer privacy for business owners, strong legal protections, and favorable tax laws, making them highly attractive to non-residents of the U.S.

Are there any states that offer free LLC formation?

No states offer free LLC formation, but states like Kentucky have meager filing fees. This makes forming an LLC more affordable in these states, especially for new business owners with a limited budget.