How Much Does It Cost to Start a US LLC? A Comprehensive Breakdown of All Expenses

How Much Does It Cost to Start an LLC in the U.S.? A Comprehensive Breakdown of Expenses and Hidden Costs

In today's ever-changing global economic environment, more entrepreneurs and small business owners are turning their attention to overseas markets-particularly mature business ecosystems like the United States. Among the various options available, registering a Limited Liability Company LLC has become a popular choice for international investors. But how much does it actually cost to start a U.S. LLC? This article offers a comprehensive analysis of the associated costs, incorporating recent news and insights.

1. What Is an LLC, and Why Choose One?

An LLC is a widely used business structure in the U.S., combining the liability protection of a corporation with the tax advantages of a partnership. Owners, known as members, are not personally liable for the company’s debts or legal obligations. Additionally, profits flow directly to members’ personal tax returns, avoiding double taxation.

According to a 2025 report by the U.S. Small Business Administration SBA, LLCs have grown at an average annual rate of 6.3% over the past five years, making them one of the most favored structures for small and medium-sized businesses.

2. Key Components of LLC Formation Costs

To accurately answer the question How much does it cost to start a U.S. LLC?, we need to break down the major expenses involved

1. State Filing Fee

This is the most basic and mandatory expense, varying from state to state

Delaware ~$90

California $85 + $800 minimum annual tax

New York Over $200 including publication fee

Nevada $75 + ~$100 registered agent fee

As reported by Forbes in October 2025, many foreign investors prefer Delaware and Wyoming due to low fees, strong privacy protections, and favorable tax policies.

2. Registered Agent Fee

U.S. law requires all LLCs to appoint a registered agent to receive legal documents. For non-residents, this typically involves hiring a professional service

Cost $100-$300 per year

3. Name Search Reservation Fee

Some states allow you to reserve a business name before registration

Cost $10-$50

4. Employer Identification Number EIN Application

The EIN is the U.S. equivalent of China’s Unified Social Credit Code. Businesses without employees can apply for free via the IRS website.

5. Operating Agreement Drafting Fee

While not required, a clear operating agreement clarifies ownership, management, and profit distribution. You can draft your own for free, or hire a lawyer

Legal drafting cost $200-$1,000

6. Annual Reports and Compliance Fees

Most states require annual reports and associated fees

California $800 minimum tax

Nevada ~$350

Additional accounting, tax filing, and audit services may be charged annually depending on business complexity.

3. Additional Costs Intermediaries and Hidden Expenses

With the rise of cross-border entrepreneurship, many third-party platforms now offer LLC registration services. However, these often come with hidden costs.

1. Service Platform Fees

Some platforms advertise $99 LLC packages, but these usually cover only the basic state filing fee. Additional services such as registered agent, address services, and operating agreements are often sold separately. In reality, total costs may reach hundreds or even thousands of dollars.

According to a November 2025 TechCrunch investigation, some online services use misleading marketing tactics to lure customers, then upsell additional features that significantly increase the final bill.

2. Address Rental Virtual Office

Most U.S. states require a valid business address. For international entrepreneurs, renting a virtual office or using a registered agent’s address is common

Cost $20-$100 per month

4. Cost Comparison Across Popular States First-Year Total

Choosing the right state is crucial for cost control. Here's a comparison of initial expenses for several top LLC-friendly states

State Initial Fee Annual Fee Registered Agent Total Year 1

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Delaware $90 $0 $100 $190

Nevada $75 $350 $100 $525

California $85 $800 $100 $985

New York $200+ $9 $100 $300+

From the table, Delaware clearly offers the best value for startup costs, while California is among the most expensive due to its high annual tax.

5. Tips to Reduce Costs

1. Choose the Right State Prioritize Delaware, Wyoming, or Nevada.

2. DIY Process Learn the steps and handle most tasks yourself to avoid intermediary fees.

3. Use Free Resources Apply for EIN through the IRS site; use online templates for operating agreements.

4. Plan Maintenance Budgets Set aside funds for annual reports and registered agent fees.

6. Conclusion Think Long-Term, Not Just Cost

The cost of setting up a U.S. LLC varies based on location, services used, and compliance needs. While initial costs may range from a few hundred to over a thousand dollars, forming an LLC in the U.S. is a strategic investment that enhances international credibility and lays the groundwork for future financing, partnerships, and market expansion.

As noted in a December 2025 Inc. article on cross-border startups, establishing a U.S. LLC has become the first step for many emerging companies entering the global stage. While cost matters, long-term strategy and regulatory compliance should remain the focus.

If you're preparing to take this step, begin by researching the best state for your LLC and planning your budget carefully-lay a solid foundation for your U.S. entrepreneurial journey.