Montana LLC vs Delaware LLC (2026)
Compare Montana LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Montana | Delaware |
|---|---|---|
| Filing Fee | $35 | $90 |
| Processing Time | 3 day(s) | 7 day(s) |
| Annual Report Fee | $15 | $300 |
| Annual Report Due | April 15 | June 1 |
| State Income Tax | Yes | Yes |
| Anonymous LLC | No | Yes |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A — you're in your home state | ~$70 + registered agent ~$100-200/yr |
Verdict: Montana wins for most businesses
For most Montana-based small businesses, forming locally in Montana is the smart choice with lower fees and simpler compliance. Delaware only makes sense if you need anonymous ownership, have investors requiring Delaware incorporation, or plan to raise venture capital.
Filing Fees & Formation Costs
Montana has significantly lower upfront costs at just $35 compared to Delaware's $90 filing fee. However, the real cost difference emerges if you form in Delaware while operating in Montana — you'll pay Delaware's $90 filing fee plus Montana's $70 foreign LLC registration fee, totaling $160. Additionally, Delaware requires a registered agent service costing $100-200 annually, making the first-year cost difference substantial.
Taxes: Montana vs Delaware
Both states impose income tax on LLCs, but the structures differ significantly. Montana has no franchise tax and charges income tax based on your business profits. Delaware also has income tax plus an annual franchise tax of $300 for LLCs, which is built into their annual report fee. If you operate in Montana but form in Delaware, you'll still owe Montana income tax on business conducted in the state.
Privacy & Asset Protection
Delaware offers superior privacy protection, allowing anonymous LLC formation where member names aren't disclosed in public records. Montana requires member disclosure, making ownership information publicly available through state records. Both states provide solid charging order protections for single-member and multi-member LLCs. Delaware's privacy advantage is significant for business owners who prioritize anonymity, but this benefit comes at a much higher cost.
Annual Maintenance Costs
Montana's ongoing costs are minimal with just a $15 annual report fee due April 15th. Delaware charges $300 annually for their franchise tax report due June 1st, plus ongoing registered agent fees of $100-200 per year. For Montana-based businesses forming in Delaware, you're looking at $400-500 in annual Delaware costs plus any Montana foreign LLC fees. This makes Delaware roughly 20-30 times more expensive for ongoing maintenance.
When Delaware Actually Makes Sense
Delaware is worth considering if you need anonymous ownership for privacy protection, have investors who specifically require Delaware formation, or plan to raise venture capital funding. The state's well-developed business court system and extensive case law also benefit complex business structures or those planning eventual public offerings. However, for typical small businesses, service companies, or local operations, Montana's lower costs and simpler compliance requirements make it the practical choice.