Texas vs Wyoming vs Delaware: Which State Should an Indian Amazon Seller Form an LLC In?
Almost every guide tells Indian sellers to form a Wyoming or Delaware LLC. That advice is not wrong, but it is incomplete, because it ignores the single factor that matters most once you actually sell physical products: where your inventory lives. Here is an honest comparison of the three states, and why the right answer depends on whether you hold stock in the US.
Wyoming: cheapest to maintain (~$60/yr), strong privacy. Best if you hold no US inventory.
Delaware: investor-friendly, but a $300/yr franchise tax and no operational edge for sellers.
Texas: no state income tax, $0 franchise tax for small sellers, and your LLC sits in the same state as your warehouse and inventory.
Rule: pure-FBA with no US stock → Wyoming is fine. Holding inventory in a US warehouse → Texas keeps everything in one state.
What's in this guide
Why state choice matters less than you think
Here is the part most guides bury: for a foreign-owned single-member LLC selling on Amazon, the state you form in has very little effect on the taxes you actually pay. Your federal obligations — Form 5472 and a pro-forma Form 1120 — are identical in all 50 states. None of these three states charges state income tax on a properly structured single-member LLC with no in-state physical operations beyond a warehouse. So the choice comes down to three smaller things: annual maintenance cost, privacy, and whether the state aligns with where your inventory physically sits. We cover the federal filings in detail in our tax guide for Indian sellers.
Wyoming: the privacy and low-cost pick
Wyoming is the default recommendation in most foreign-seller guides, and for good reason. It has no state income tax, one of the lowest annual report fees in the country (around $60), and strong owner-privacy rules — member names are not part of the public record. For a seller who holds no inventory in the US, ships direct from India, or runs a light operation, Wyoming is genuinely a clean, cheap choice. The catch is that Wyoming gives you nothing operationally: it is just a registration. If your goods physically enter the US, they do so somewhere else entirely, and your LLC and your inventory now live in two different states.
Delaware: built for startups, not sellers
Delaware is famous because venture-backed startups incorporate there; its corporate law and Court of Chancery are built for companies that raise investment. For an Amazon seller, almost none of that applies. Delaware charges a flat franchise tax of around $300 per year regardless of revenue — meaningfully more than Wyoming — and offers no operational advantage for someone moving physical products. Unless you genuinely plan to raise outside investment into the entity, Delaware is usually paying extra for benefits a product seller will never use.
Texas: where your inventory already is
Texas is the choice that only makes sense once you factor in physical goods. It has no state income tax, and its franchise tax is zero for the vast majority of sellers — the no-tax-due threshold sits around $2.47M in annualised revenue, well above where most sellers operate. What Texas uniquely offers is alignment: if your inventory is received, stored, and prepped in a Texas warehouse, then forming your LLC in Texas means your legal entity, your registered address, your inventory, and your state compliance all live in one place. There is no cross-state mismatch to explain to a bank, a customs broker, or the IRS. For a seller using a Texas-based US warehouse and FBA prep operation, that single-state cleanliness removes friction that Wyoming and Delaware sellers have to manage around.
Side-by-side comparison
| Factor | Wyoming | Delaware | Texas |
|---|---|---|---|
| State income tax | None | None* | None |
| Annual fee / franchise tax | ~$60 | ~$300 | $0 below ~$2.47M revenue |
| Owner privacy | High | Moderate | Moderate |
| Built for investment | No | Yes | No |
| Aligns with a US warehouse | No | No | Yes (if warehouse is in TX) |
| Best for | No US inventory | Raising investment | Holding US inventory |
*On a properly structured single-member LLC with no in-state income.
The factor every guide ignores
The reason most guides land on Wyoming is that most guides are written by company-formation services that do not handle your physical inventory. To them, an LLC is a registration and nothing more, so they optimise for the cheapest, most private registration: Wyoming. That is sound advice in a vacuum. But the moment you hold stock in a US warehouse, the equation changes, because now your business has a physical home, and keeping the legal entity in the same state as that home is simpler than splitting them. The right question is not “which state is cheapest to register in” but “where does my business actually operate.”
Our honest recommendation
If you ship direct from India and never hold inventory in the US, Wyoming is a perfectly good, low-cost choice — we will not pretend otherwise. If you plan to raise outside investment into the entity, Delaware has a reason to exist. But if you are doing what most serious Indian Amazon sellers do — importing in bulk and holding buffer stock in a US warehouse for fast FBA replenishment — then forming in Texas, where that warehouse sits, keeps your entire operation in one state and removes a layer of cross-state complexity. That is why Think14 forms Texas LLCs: not because Texas is magic, but because our warehouse is in Texas, and your LLC, inventory, and compliance belong together. To see the full first-year cost either way, use our US LLC cost calculator.
Think14 forms your Texas LLC and EIN and aligns it with our Austin warehouse, so your entity, inventory, and compliance all live in one state. New to the setup sequence? Start with our EIN guide.
Frequently asked questions
What is the best state for an Indian seller to form a US LLC?
It depends on inventory. If you hold no stock in the US, Wyoming is cheap and private. If you hold inventory in a US warehouse, forming in the same state as that warehouse (e.g. Texas) keeps your entity, inventory, and compliance aligned in one state.
Is Wyoming or Delaware better for an Amazon seller?
Wyoming for most sellers — it is cheaper (~$60/yr vs Delaware’s ~$300) and more private. Delaware mainly benefits companies planning to raise outside investment, which most Amazon sellers are not.
Does the LLC state change the taxes I pay?
For a foreign-owned single-member LLC, federal obligations (Form 5472 and pro-forma Form 1120) are the same in every state. None of Texas, Wyoming, or Delaware charges state income tax on a properly structured entity with no in-state income. The main differences are annual fees and warehouse alignment.
Why does Think14 use Texas instead of Wyoming?
Because Think14’s warehouse is in Texas. Forming the LLC in the same state as your inventory keeps the entity, registered address, stock, and state compliance in one place, removing cross-state friction.
Can I change my LLC’s state later?
Yes, through a process called domestication or by forming a new entity, but it adds cost and paperwork. It is cleaner to choose the right state at the start based on whether you will hold US inventory.