Forming an LLC in Texas — and the faster way to trade today

Texas is the second-largest economy in the United States and would be the eighth-largest economy in the world if it were an independent country. With no personal or corporate income tax, a business-friendly regulatory environment, and a workforce of over 14 million, Texas attracts more business relocations than any other state.

The Lone Star State is particularly strong for energy, technology, healthcare, construction, and professional services. Major companies including Tesla, Oracle, HP Enterprise, and Charles Schwab have relocated their headquarters to Texas in recent years, drawn by the combination of no income tax and lower operating costs.

However, Texas has the highest filing fee among popular LLC formation states at $300. If you do not have operations in Texas, this premium is hard to justify. Wyoming ($100), New Mexico ($50), and even Delaware ($90) all cost less to form. For non-residents with no Texas connection, other states — usually Wyoming — offer better value.

Texas makes the most sense if you operate within the state, serve Texas customers, or want the credibility that comes with one of America's largest business markets. If you simply need a clean, private US company you can bank and trade with this week, read on — a ready-made Wyoming LLC is usually the better fit.

All fees below are sourced from the Texas Secretary of State fee schedule.

Step 1: Choose your LLC name

Your LLC name must be distinguishable from existing entities in Texas and must include "Limited Liability Company," "LLC," or "L.L.C." Search availability on the Texas Comptroller's office and the Texas SOS entity search. Name reservation costs $40 for 120 days.

Step 2: Appoint a registered agent

Every Texas LLC must have a registered agent with a physical street address in Texas. The registered agent must be a Texas resident or a business entity registered to do business in Texas.

Step 3: File Certificate of Formation

File online through SOSDirect or by mail. The filing requires:

• LLC name with designator
• Purpose of the LLC (can be general)
• Duration (perpetual or specific end date)
• Registered agent name and address in TX
• Name and address of each governing person (managers) or each member
• Name and address of each organizer
• $300 filing fee

Step 4: Create a Company Agreement

Texas calls the Operating Agreement a "Company Agreement." While not required to be filed with the state, it is the governing document of the LLC and essential for banking and operations.

Step 5: Obtain an EIN

Apply for an EIN from the IRS using Form SS-4. Standard process for all states. (A ready-made Wyoming LLC skips this step — its EIN already exists.)

Step 6: File initial franchise tax report

Texas requires a franchise tax report within one year and 89 days of formation. For LLCs with revenue under $2.47 million, file a No Tax Due report (no payment required). Register with the Texas Comptroller.

1. Franchise tax report: Due May 15 annually. File a No Tax Due report if revenue is under $2.47 million. If over, calculate and pay franchise tax.
2. Federal tax filing: Form 5472 with pro forma 1120 for foreign-owned LLCs. Due April 15.
3. Registered agent: Maintain a registered agent with a physical Texas address.
4. FinCEN BOI Report: Required under the Corporate Transparency Act.
5. Sales tax returns: If registered for Texas sales tax, file returns on the required schedule.

The Texas franchise tax (also called the margin tax) is often misunderstood. Here are the key points:

• Threshold: Businesses with total revenue of $2.47 million or less owe $0 in franchise tax (2026 threshold, adjusted periodically)
• Filing requirement: Even if you owe $0, you must file a No Tax Due report by May 15 each year
• Rates: 0.375% for retail and wholesale businesses; 0.75% for all other businesses
• Calculation: The tax is calculated on the LLC's "margin," which is total revenue minus the greatest of: cost of goods sold, compensation, 30% of total revenue, or $1 million
• First report: Due within one year and 89 days of formation

For most new LLCs, especially those owned by non-residents, revenue will be well under the $2.47 million threshold. The franchise tax effectively costs $0 — you just need to file the No Tax Due report.

Prefer a brand-new Texas LLC? — $549 (US residents)

We can register a fresh Texas LLC in your chosen name. Pricing: $549 for US residents ($249 service + $300 state fee) or $649 for international filers ($349 service + $300 state fee). It's slower than buying ready-made, but if the exact Texas name matters more than speed, contact us and we'll set it up.

Every Texas formation package includes:

• Certificate of Formation filing with the Texas Secretary of State
• One year of registered agent service in Texas
• Custom Company Agreement (Operating Agreement)
• EIN application
• Banking introduction letter
• Digital document delivery within 24 hours of state approval
• Compliance calendar with all filing deadlines
• Dedicated support

Considering other states? Compare Wyoming, Delaware, or see the United States overview.