Delaware LLC vs Minnesota LLC (2026)
Compare Delaware LLC vs Minnesota LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
By Edmond Hui · Last updated: August 13, 2026
Verdict: Delaware wins for most businesses
For most Delaware-based businesses, forming locally in Delaware is the smarter choice. You avoid paying fees in two states and managing compliance in both. Minnesota only makes sense if your business genuinely operates there, and even then the total costs deserve a hard look.
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| Factor | Delaware | Minnesota |
|---|---|---|
| Filing Fee | $110 | $135 |
| Processing Time | Not published by the state | Not published by the state |
| Annual Report Fee | None ($400/yr entity tax instead) | $0 |
| Annual Report Due | None required | December 31 |
| State Income Tax | Yes | Yes |
| Anonymous LLC | Yes | No |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A, you're in your home state | $200 + registered agent ~$150/yr |
Full fee breakdown for either state: Delaware LLC cost and Minnesota LLC cost.
Business Climate: Delaware vs Minnesota
| Factor | Delaware | Minnesota |
|---|---|---|
| 5-year business survival rate | 48.1% (#37 of 51) | 54.9% (#6 of 51) |
| Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months)) | +2.5% YoY (#33 of 51 by volume) | +6.5% YoY (#29 of 51 by volume) |
Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)
Compare LLC Costs: Delaware vs Minnesota
Delaware
Minnesota
Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where a state requires publication, and any one-time registration charge a state requires before the LLC may trade. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Montana's annual report is free when filed by April 15 and $35 after, a waiver the Secretary of State applies at its discretion. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.
Filing Fees & Formation Costs
Delaware charges $110 to form an LLC, while Minnesota charges $135. Delaware is $25 cheaper upfront. The cost that usually gets overlooked: if you form in Minnesota but operate in Delaware, you must also register as a foreign LLC in Delaware (a $200 filing) and maintain a registered agent in Minnesota (typically around $150 per year). That puts the realistic first-year cost of the Minnesota route at roughly $485, versus $110 for simply forming in Delaware. Speed isn't a basis for choosing between them: neither Delaware nor Minnesota publishes a standard processing time, so any figure comparing the two is guesswork.
Taxes: Delaware vs Minnesota
Both Delaware and Minnesota levy a personal income tax on pass-through business income, and your LLC's profits will be taxed where you live and operate. Forming in Minnesota doesn't change what a Delaware-based owner pays. Minnesota levies a graduated individual income tax (four brackets, 5.35% to 9.85%) on wage and pass-through business income, administered by the MN Department of Revenue. Delaware LLCs owe a flat $400 annual LLC tax (no report required). No franchise tax, but LLCs taxed as partnerships or S corporations owe Minnesota's 'minimum fee' (tiers starting at $250) if the sum of Minnesota property, payroll, and sales/receipts is at least $1,250,000 (inflation-adjusted); single-member LLCs reporting on the owner's Form M1 are exempt.
Privacy & Asset Protection
Delaware, your home state, actually offers more formation privacy than Minnesota: Delaware allows anonymous LLC formation, while Minnesota requires owner or manager information on public filings. The Articles of Organization require only organizer names (Minn. Stat. § 322C.0201), but the mandatory annual renewal must include the name and business address of 'the manager of a limited liability company, or chief executive officer' under Minn. Stat. § 5.34(a)(5), so at least one governing person appears on a routine public filing. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal. From a privacy standpoint there's no reason for a Delaware-based business to form in Minnesota.
Annual Maintenance Costs
Delaware LLCs file no annual report at all, and Minnesota LLCs file a free annual report (due December 31). If you form in Minnesota while operating in Delaware, you maintain filings in both states, Minnesota's report, though Delaware asks for nothing on the foreign-registration side, and pay a Minnesota registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the Minnesota route to roughly $150 a year, versus about $400 to keep a domestic Delaware LLC in good standing. The taxes inside those totals: Delaware LLCs owe a flat $400 annual LLC tax (no report required). No franchise tax, but LLCs taxed as partnerships or S corporations owe Minnesota's 'minimum fee' (tiers starting at $250) if the sum of Minnesota property, payroll, and sales/receipts is at least $1,250,000 (inflation-adjusted); single-member LLCs reporting on the owner's Form M1 are exempt.
When Minnesota Actually Makes Sense
Forming in Minnesota makes sense in a few specific situations: your business genuinely operates in Minnesota, with a real office, employees, or property there, or you're relocating to Minnesota in the near future. For a typical small business based in Delaware, none of these usually apply. Registering a Minnesota LLC to do business back home means $200 in Delaware foreign-registration fees, on top of Minnesota's $155 formation fee, while Delaware itself never asks for an annual report at all. Delaware already allows anonymous formation, so the privacy argument for Minnesota doesn't apply to a Delaware-based owner. Trading Delaware's no-annual-report status for Minnesota's filing calendar is a step backwards for most owners. When in doubt, form where you actually do business.
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