How Much Does It Cost to Start a Company in the U.S.? A Complete Guide to Taxes, Annual Reports, Tax Filings, and Bank Account Opening

Registering a company in the United States is not as simple as filling out a form and paying a fee. In practice, costs vary significantly, state-specific regulations differ markedly, and ongoing compliance obligations are frequently underestimated. Many entrepreneurs only realize-after obtaining their Employer Identification Number (EIN)-that the most expensive and time-consuming phases are just beginning.

I. Foundational Registration Costs State of Incorporation and Entity Structure Determine the Baseline

There is no federal-level company registration in the U.S.; registration must be completed in a specific state. Fees vary substantially across states

1. Delaware (the most commonly chosen state) $300 filing fee for an LLC; no minimum capital requirement.

2. Wyoming $100 filing fee for an LLC, plus an additional ~$60 franchise tax due in the first year.

3. California $70 initial filing fee for an LLC, but imposes a mandatory $800 annual franchise tax (waived for the first year, then levied starting in Year 2).

4. New York An LLC must publish a legal notice in designated newspapers within 120 days of registration; combined publication fees for both New York City and state-level newspapers typically exceed $1,200.

Note Non-U.S. residents must appoint a Registered Agent, with annual fees typically ranging from $100 to $300-a non-negotiable requirement.

II. Critical Ongoing Compliance Costs Failure to Comply on Time Carries Consequences Far Beyond Penalties

Registration is merely the starting point; sustained compliance constitutes the bulk of long-term costs

1. Annual Report Filing Most states require submission of an Annual Report, with associated fees ranging from $0 (e.g., New Mexico) to $300 (e.g., Maryland).

2. Federal-Level Requirements Obtaining an EIN is free of charge; however, if the business hires employees or engages in certain activities (e.g., selling tangible goods), it must proactively register for a state Sales Tax Permit. Some states-including Washington-also impose an initial registration fee.

3. Tax Filings Even with zero revenue, an LLC-as a “pass-through entity”-must still file IRS Form 1065 (U.S. Return of Partnership Income) and issue Schedule K-1s to its members. A C Corporation, by contrast, must file Form 1120 annually and pay federal corporate income tax (flat federal rate 21%), plus applicable state-level corporate taxes where imposed.

4. Business Bank Account Opening Most U.S. banks require the authorized signatory to appear in person at a branch. Alternatively, some institutions (e.g., JPMorgan Chase) accept remotely executed, notarized documentation-but maintain strict verification standards for foreign controlling persons, often rejecting applications from individuals lacking an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN).

III. Hidden Yet Frequent Cost Items

1. Accounting Services Annual accounting and tax preparation for a small LLC typically starts at $1,200-$2,500, covering state tax filings, 1099 issuance, and quarterly estimated tax reminders.

2. ITIN Application Non-resident owners who need to file U.S. personal tax returns (e.g., foreign members of an LLC) must apply separately for an ITIN. Document preparation and IRS processing time generally take 12-16 weeks.

3. Trademark and Domain Name Protection USPTO trademark registration fees range from $250 to $350 per class; it is advisable to simultaneously register the corresponding .com domain name to prevent cybersquatting.

The above outlines the core cost components and mandatory compliance milestones involved in forming and maintaining a U.S. company. We hope this information proves helpful to you.