Delaware LLC vs Nevada LLC
Last updated July 2026
Delaware LLC
The default state for startups planning to raise venture capital
Advantages
- Investor-friendly; most VCs prefer or require Delaware entities
- Chancery Court is the most sophisticated business court in the U.S.
- Well-established body of business law, fewer legal surprises
- No public disclosure of LLC members
- Filing fee only $90
Drawbacks
- Annual franchise tax of $300 flat
- Registered agent required if you don't live in Delaware ($50-$300/yr)
- Foreign qualification required in your home state if operating elsewhere
- No specific asset protection edge over Wyoming or Nevada
Nevada LLC
The asset-protection-focused state with no state income tax
Advantages
- No state income tax on LLCs (federal still applies)
- Strong charging order protection for single-member LLCs
- Member and manager privacy on public filings
- No information-sharing agreement with the IRS
- Established body of case law on Nevada asset protection
Drawbacks
- Annual State Business License fee of $200 plus $150 List of Managers filing
- Total ongoing cost $350/yr before registered agent, above Wyoming's $60
- Not investor-friendly, VCs typically require Delaware conversion
- Foreign qualification required in home state if operating there
Delaware and Nevada are two of the most-cited states for out-of-state LLC formation. Delaware is the standard for VC-backed startups thanks to Chancery Court and investor familiarity. Nevada is known for strong asset protection and no state income tax. Both charge higher annual fees than Wyoming, and both require foreign qualification in your home state if you operate there.
Feature Comparison
| Feature | Delaware LLC | Nevada LLC |
|---|---|---|
| Filing Fee | $90 initial filing | $425 initial filing (including State Business License) |
| Annual Fee | $300 flat franchise tax | $350/yr (List of Managers $150 + State Business License $200) |
| Privacy Level | Members not disclosed on public filings | Members and managers not disclosed publicly |
| Court System | Chancery Court, most sophisticated business court in U.S. | Standard state courts with Nevada business precedent |
| VC-Friendly | Yes, standard for venture-backed startups | No, VCs typically require Delaware conversion |
| Foreign Qualification | Required in home state if operating there | Required in home state if operating there |
| Asset Protection | Standard LLC protections | Strong charging order protection; no IRS info sharing |
| Typical Annual Cost | About $500-$700/yr including registered agent + tax | About $500-$800/yr including registered agent + fees |
Too Close to Call
Delaware wins for VC-track startups. Nevada wins for asset-protection-focused holding LLCs and real estate structures with no VC plans.
Delaware's VC-friendliness is functionally mandatory for anyone raising institutional capital, VCs won't fund non-Delaware entities without conversion, and conversion adds friction. Nevada's asset protection edge is real for holding LLCs and single-owner real estate entities, but most operating businesses should form in their home state to avoid double fees. If you don't need VC and don't need Nevada's specific asset-protection edge, Wyoming is often cheaper.
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