What's the cheapest state to form an LLC?

The cheapest state to file in is Montana at $35, then Kentucky ($40) and Arkansas ($45). But the cheapest state to run an LLC is almost always the one you already live in — because a business must register wherever it operates, forming somewhere cheaper usually means paying two states instead of one.

This guide ranks it honestly: the lowest filing fees, the states with no annual fee at all, and the foreign-qualification trap that turns a $35 bargain into a double bill.

Cheapest filing fees, ranked

If you are choosing among states you could genuinely call home — or you run a location-independent business with no fixed nexus — here is where the one-time formation fee is lowest in 2026.

Cheapest to file

$35

Montana

2nd cheapest

$40

Kentucky

3rd cheapest

$45

Arkansas

$50 cluster

6 states

AZ, CO, MI, MS, MO, NM

For the full 50-state table, see LLC cost by state.

Cheapest to maintain: the states with no annual fee

For most businesses the recurring cost matters far more than the formation fee, because you pay it every year for as long as the LLC exists. A short list of states charge no recurring LLC fee at all:

• Ohio — $99 to form, then nothing. No annual report, no franchise tax on the LLC.
• Missouri — $50 to form, then nothing.
• South Carolina — $110 to form ($125 filed online), then nothing (unless taxed as an S-corp).
• Arizona — $50 to form, then nothing.
• New Mexico — $50 to form, then nothing — no annual, biennial, or triennial report at all.

Run the math over five years and the picture inverts. A Missouri LLC costs $50 total for five years of existence. An Arkansas LLC costs $45 to open plus $150 a year — $795 over the same span. The state with the third-cheapest filing fee ends up roughly sixteen times more expensive to hold. That is why “cheapest to form” and “cheapest to own” are different questions, and why you should always look at the recurring column before the headline.

Arizona and New Mexico are the standouts here: they sit in the $50 formation cluster, and neither charges any recurring state fee — both are as cheap to hold as it gets. New Mexico also does not name members on the public record. But — and this is the whole point of the next section — none of that helps if you do not actually operate there.

The honest headline: the cheapest state is usually your home state

Here is the mistake that costs people real money. You read that Montana forms LLCs for $35, so you form there — but you run your business from Georgia.

Georgia does not care where the paperwork was filed. Because you operate in Georgia, your Montana LLC is a foreign LLC doing business in Georgia, and Georgia requires you to register it there too. Now you are paying:

• Montana’s $35 formation fee and its annual report ($0 on time, $35 if late), and
• Georgia’s foreign-registration fee, a Georgia registered agent, and Georgia’s $60 annual registration, and
• income tax to Georgia anyway, because that is where you earn and live.

You did not save $35. You added a second state’s worth of fees, filings, and registered-agent cost on top of your home state — which you still have to register in. The out-of-state LLC changed the letterhead, not the math.

This is why, for anyone with a physical business — a storefront, an office, employees, or just a desk you work from in one state — the genuinely cheapest state is your home state, even if its filing fee is not the lowest on the list. One $150 home-state setup beats a $35 out-of-state filing plus a $150 foreign qualification every time. We walk through this decision in full in best state to form an LLC.

Whichever state ends up being yours, every LLC needs a registered agent on file — a person or service with a street address in the state of formation. FilingDesk includes the registered agent free for the first year on every plan, so that line item is one less thing to shop for separately.

When a cheap out-of-state LLC actually makes sense

There is exactly one profile where shopping on formation fee is the right move: a business with no operating nexus in any particular state. Think e-commerce brands, SaaS, digital agencies, content businesses, holding companies, and non-resident founders — work that is not tied to any single state’s ground.

For that profile, the best value is not the cheapest filing fee at all — it is Wyoming:

Wyoming costs $100 to form — nearly triple Montana’s $35 — but for a location-independent business it wins on everything that matters after day one: $60 a year to maintain, no state income tax, members not named on the public record, and strong charging-order asset protection. Because a location-independent business creates no nexus to trip over, there is no foreign qualification to cancel out the benefit. That is the narrow case where forming out-of-state genuinely pays. Full detail is in the Wyoming LLC guide, with the Wyoming vs Delaware comparison if you are also weighing the startup path, and the non-resident specifics if you are outside the U.S.

Holding companies are another clean fit — an entity that owns rental property, a boat, or other LLCs has no operating storefront, so cost and privacy drive the choice. See Wyoming holding company and LLC for rental property for those setups.

A quick decision path

Four questions, in order — the first one that fits you decides the answer.

1. 1

   Do you have a physical business?

   A location, employees, or local customers in one state? Form in that state. It’s your cheapest option once foreign qualification is counted, whatever its filing fee. Skip the rest of this list.

2. 2

   Are you location-independent?

   An online business, a holding company, or a non-resident with no U.S. operating nexus? Wyoming is the best value — $60/yr, no income tax, strong privacy. Not the cheapest to file, but the cheapest to own for your profile.

3. 3

   Do you already live in a low-fee state?

   Montana, Missouri, New Mexico, Arizona, Ohio? Then your home state is the cheap state. Enjoy it.

4. 4

   Still tempted by a cheap state you don't live in?

   Before you file, add your home state’s foreign-qualification cost to the cheap state’s fees. That total — not the $35 headline — is what you’ll actually pay. It almost never beats forming at home.

Want the numbers for your own situation? Run our LLC cost calculator or check your state’s annual-report deadline before you decide.

Where FilingDesk fits

FilingDesk forms your LLC in whichever state is genuinely cheapest for you: describe your business in plain English, and we run the name check, prepare and file the formation documents — a human specialist reviews every filing before it goes to the state — then handle your EIN and operating agreement, plus a free first-year registered agent wherever one’s required. One flat plan: $99 plus the state’s filing fee, passed through at cost, with a 60-day money-back guarantee and $99/year after your first year. Live for filing today: Wyoming ($199 all-in), Florida ($224), and Delaware ($209), with more states available on request via a specialist. No upsells — see pricing or start here.

Frequently asked questions

Sources

• Montana Secretary of State — Business Services (filing fees)
• Kentucky Secretary of State — Business Filings
• Ohio Secretary of State — Business Filing Fees
• Wyoming Secretary of State — Business Division
• Georgia Secretary of State — Annual Registration (filing fees)
• IRS — Limited Liability Company (LLC)

This guide is general information, not legal advice. FilingDesk is not a law firm.