Texas LLC vs Delaware LLC (2026)

Business Climate: Texas vs Delaware

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

See the full 50-state survival ranking.

Compare LLC Costs: Texas vs Delaware

Filing Fees & Formation Costs

Texas charges $300 to form an LLC, while Delaware charges $90. Delaware is $210 cheaper upfront. The cost that usually gets overlooked: if you form in Delaware but operate in Texas, you must also register as a foreign LLC in Texas — a $750 filing — and maintain a registered agent in Delaware (typically around $150 per year). That puts the realistic first-year cost of the Delaware route at roughly $990, versus $300 for simply forming in Texas. Timing differs more than cost here: Texas approves standard online filings in about 3 business days, while Delaware takes about 7 business days.

Taxes: Texas vs Delaware

Texas has no personal income tax, while Delaware taxes individual income. Since pass-through LLC profits are taxed where you live and operate, a Texas-based owner keeps Texas's no-income-tax benefit either way — forming in Delaware adds no tax advantage. Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report. Delaware LLCs owe a flat $300 annual LLC tax (no report required).

Privacy & Asset Protection

Delaware allows anonymous LLC formation — member and manager names do not appear on routine public filings. Delaware's Certificate of Formation requires no member or manager names, and LLCs file no annual report, so ownership never appears on a public filing. Texas does not offer that same privacy. The Certificate of Formation (Form 205) must name at least one governing person (member or manager), a public record; the annual Public Information Report also discloses management. 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. One important caveat: if you register your Delaware LLC as a foreign LLC in Texas, that Texas registration is itself a public record, which can undercut much of the privacy benefit for a business that operates in Texas.

Annual Maintenance Costs

Texas LLCs file a free annual report (due May 15), and Delaware LLCs file an annual report ($300, due June 1). If you form in Delaware while operating in Texas, you maintain filings in both states — Delaware's report plus Texas's equivalent for your foreign registration — and pay a Delaware registered agent roughly $150 per year. That brings ongoing costs of the Delaware route to roughly $450 per year, versus about $0 to keep a domestic Texas LLC in good standing. There are also recurring state taxes to weigh on each side. Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report. Delaware LLCs owe a flat $300 annual LLC tax (no report required).

When Delaware Actually Makes Sense

Forming in Delaware makes sense in a few specific situations: you need anonymous ownership and Delaware's privacy protections are central to your planning (typically via a holding company, since operating in Texas still requires a public foreign registration there), you are raising venture capital or institutional investment — many investors specifically prefer or require Delaware entities, your business genuinely operates in Delaware — with a real office, employees, or property there, or you are relocating to Delaware in the near future. For a typical small business based in Texas, none of these usually apply — and the extra formation, foreign-registration, and maintenance costs of the Delaware route buy little in return. When in doubt, form where you actually do business.

More State Comparisons