The three formation fees look like $399 versus $500 versus $297. Over three years the same three choices cost $876, $1,600 and $6,177 — because the fee buys a company, and the state, the agent and the tax filing decide what keeps it alive.
Affiliate disclosure (FTC): some links in this article are affiliate links, including the Firstbase link. If you form a company through them I may earn a commission at no extra cost to you. A commission does not change the price you pay and does not buy a ranking or a recommendation. The tables below are a transparent planning model built from published provider prices and published state and IRS fee schedules — not a quote, not a tax opinion, and not a promise of savings. Nothing here is legal, tax or accounting advice for your specific facts.
The trap: a formation fee is not a holding cost
Every comparison post on the internet is built on the same three numbers. Firstbase charges $399 for a company formation package. Stripe Atlas charges $500. Doola's Starter plan is $297. Sort ascending and Doola looks like the cheapest way to own a US company, Firstbase looks mid-market, and Stripe Atlas looks like the premium option you buy when you already have investors.
That sort is useless, and the reason is arithmetic, not opinion. A US company has three recurring obligations that are completely independent of the person who filed the paperwork: the state wants an annual report or franchise tax, the state wants a registered agent physically present in the state, and the IRS wants a Form 5472 attached to a pro forma Form 1120 if the owner is a non-resident alien. Only the first of those is a one-time event, and the cheapest headline fee can select the most expensive state.
Here is the asymmetry in one sentence: Wyoming charges $60 a year and has no state income tax; Delaware charges $300 a year for an LLC and $450 or more for a C-Corp. Choose the state, and you have chosen two-thirds of your three-year bill, no matter whose checkout page you used.
The founder who compares formation fees alone therefore makes a decision about year one while signing up for years two and three. A $101 cheaper formation fee is worth nothing if it locks in $240 a year of extra state cost. That is exactly what the Delaware-only rule at Stripe Atlas does.
What each provider actually sells
Before the tables, the product shapes have to be on the table, because they are not comparable line items.
- Firstbase, $399 one-time formation. A formation package priced once, not a subscription. You choose the entity type and — crucially — the state. Wyoming LLC is available. Registered agent service is an optional add-on at roughly $99 a year, and tax filing is quoted separately rather than bundled. The structure is modular: you pay for what the company actually needs this year.
- Stripe Atlas, $500 one-time formation. A tightly engineered pipeline that produces a Delaware entity, an EIN, and a Stripe account that works. The first year of registered agent is included; renewals land at roughly $100 a year from year two. The state is Delaware. There is no Wyoming option, and the package is designed around companies that intend to raise venture capital and issue equity.
- Doola, $297 a year Starter, or $1,999 a year Total Compliance. A subscription, not a one-time fee. Starter covers the formation workflow and ongoing registered agent and address service; Total Compliance bundles the tax and bookkeeping work, including the federal filings a foreign-owned LLC needs. The $297 is an annual number, and the state fee is added on top in both plans.
That difference in shape — one-time versus annual — is where the marketing comparison dies. Three years of $297 is $891 before a single state fee. Three years of $1,999 is $5,997. Neither number appears next to the $399 and $500 in a "formation cost" column.
3-year total cost of ownership, computed line by line
Five scenarios, identical founder, identical revenue, identical filing duty. Only the provider and the state change. Every figure is a published rate multiplied by the number of years it repeats for. No discounts, no promo codes, no "first year free" framing.
| Scenario | Formation | State, 3 years | Registered agent, 3 years | 3-year total | Average / year |
|---|---|---|---|---|---|
| Firstbase · Wyoming LLC | $399 | $180 ($60×3) | $297 ($99×3) | $876 | $292 |
| Firstbase · Delaware LLC | $399 | $900 ($300×3) | $297 ($99×3) | $1,596 | $532 |
| Stripe Atlas · Delaware LLC | $500 | $900 ($300×3) | $200 ($100×2) | $1,600 | $533 |
| Stripe Atlas · Delaware C-Corp | $500 | $1,350 ($450×3) | $200 ($100×2) | $2,050 | $683 |
| Doola Starter · Wyoming LLC | $891 ($297×3) | $180 ($60×3) | included | $1,071 | $357 |
| Doola Total Compliance · Wyoming | $5,997 ($1,999×3) | $180 ($60×3) | included | $6,177 | $2,059 |
Assumptions: Firstbase $399 formation, $99/yr registered agent add-on; state fees at published Wyoming ($60/yr annual report) and Delaware ($300/yr LLC franchise tax, $450/yr C-Corp minimum) rates; Stripe Atlas $500 with first-year agent included and $100/yr renewal thereafter; Doola Starter $297/yr and Total Compliance $1,999/yr, each plus state fees. Verified against provider and state publications in October 2026.
The gap between the cheapest and the most common choice is $724 over three years — $1,600 for the Delaware-only route against $876 for the Wyoming route. Nothing about the founder's product changed. The state changed, and the state repeats every single year.
The same numbers, year by year
| Scenario | Year 1 | Year 2 | Year 3 | 3-year total |
|---|---|---|---|---|
| Firstbase · Wyoming LLC | $558 | $159 | $159 | $876 |
| Stripe Atlas · Delaware LLC | $800 | $400 | $400 | $1,600 |
| Doola Starter · Wyoming LLC | $357 | $357 | $357 | $1,071 |
| Doola Total Compliance · Wyoming | $2,059 | $2,059 | $2,059 | $6,177 |
Look at the year-two column. A Firstbase Wyoming LLC renews for $159: $60 to the state, $99 to the agent. A Stripe Atlas Delaware LLC renews for $400: $300 to the state, $100 to the agent. That is a 2.5× difference in the cost of simply continuing to exist, and it is the only number that matters once the formation is behind you.
The subscription model has the opposite profile. Doola Starter is the flattest line in the table — $357 every year, with no spike and no renewal surprise. If what you want is predictable annual cost and someone else holding the agent and address, flat is a feature. If what you want is the lowest three-year total, flat is a $195 premium over the modular route.
Why Stripe Atlas cannot give you Wyoming
The Delaware-only rule is not laziness. Stripe Atlas exists to produce a company that can open a Stripe account, issue equity and pass an investor's diligence checklist, and Delaware is the jurisdiction that ecosystem is built on. Investors' standard documents assume Delaware corporate law, the Delaware Court of Chancery produces predictable precedent, and a C-Corp's stock plan, 83(b) elections and preferred-share mechanics all have well-worn templates there. If you intend to raise a priced round from US funds, paying $300 to $450 a year for that predictability is not waste. It is the cost of the asset you are selling.
The problem is that most non-US founders buying a formation package are not raising a US round. They are an indie developer or a two-person SaaS team who needs a US entity for one reason: to accept card payments as a US business, hold a US business bank account and stop paying a Merchant of Record 5%. That founder is paying a Delaware franchise tax for a legal infrastructure they will never use.
The decision rule: choose Delaware when a priced equity round, a US stock plan or a US acquirer is on the roadmap within 24 months. Choose Wyoming when you are optimising for a low, predictable annual bill and privacy — Wyoming does not publish member names in its public filings. Do not choose Delaware because a formation page defaulted to it.
There is a second-order cost that the fee tables never show: converting later. A Wyoming LLC can convert into a Delaware C-Corp when a round actually happens, and the conversion is a normal, well-documented exercise. Paying for Delaware for three years in case a round materialises in year four is paying insurance against a decision you can simply make later.
IRS Form 5472 and pro forma Form 1120: the $25,000 line
This is the part of the cost model that decides whether any of the above is affordable, and it is identical for all three providers. A single-member LLC owned by a non-resident alien is a disregarded entity for income tax, but it is still a reporting corporation. It must file IRS Form 5472 together with a pro forma Form 1120, disclosing reportable transactions between the foreign owner and the US company — including contributions, distributions, and amounts paid on the owner's behalf.
The penalty for failing to file, or for filing an incomplete form, is $25,000 per form, per year. It is not a percentage of revenue and it is not waived because the company had no profit or no activity. Additional penalties can accrue for continuing failures after IRS notice. This single line item dwarfs the entire three-year difference between every provider in the table above, which is why "cheap formation" is a meaningless claim if the filing is not handled.
| Filing duty | Who | Deadline | Cost if ignored |
|---|---|---|---|
| Form 5472 + pro forma Form 1120 | Foreign-owned single-member LLC (disregarded entity) | 15 April (calendar year); 15 October with Form 7004 | $25,000 per form |
| State annual report / franchise tax | Every LLC or corporation in the state of formation | Anniversary or fixed state date | State penalty + dissolution risk |
| Registered agent renewal | Every entity; the agent must have a physical state address | Annual | Administrative dissolution |
Three things are worth stating precisely, because they are the usual sources of a five-figure surprise:
- No activity is not an exemption. A dormant LLC with a foreign owner still has a filing obligation. Zero revenue generates a zero-information return, not a skipped one.
- The form is attached to a pro forma 1120. Sending a 5472 alone is an incomplete filing. The two documents travel together.
- Reasonable cause is a defence, not a plan. The IRS can abate the penalty where the failure was due to reasonable cause and the taxpayer acted in good faith, but that is an argument made after a notice arrives, with professional fees attached, and it is not something to budget around.
What the filing actually costs
There are three legitimate routes, and their price differences explain most of the spread in the market:
- Do it yourself: $0 in fees, several hours of learning, and the full $25,000 exposure if you get the transaction categories wrong.
- A specialist preparer or CPA: typically a few hundred dollars a year for a straightforward single-member LLC with a handful of owner transactions. This is the route most first-time foreign founders should price.
- A bundled compliance subscription: Doola's Total Compliance at $1,999 a year covers the tax preparation and bookkeeping alongside the agent and address. It is the most expensive route per year and the one with the fewest moving parts.
| 3-year basket | Formation + state + agent | 5472 preparation (3 years) | 3-year total |
|---|---|---|---|
| Firstbase Wyoming + independent preparer | $876 | $1,200 | $2,076 |
| Stripe Atlas Delaware LLC + independent preparer | $1,600 | $1,200 | $2,800 |
| Doola Total Compliance Wyoming (filing bundled) | $6,177 | included | $6,177 |
Preparer allowance: $400 per year for a straightforward single-member LLC 5472 plus pro forma 1120. Substitute your own quote; the ranking of the formation routes does not change, only the totals.
Once the tax filing is priced in, the honest comparison is $2,076 versus $2,800 versus $6,177. The formation fee is 19% of the first basket, 18% of the second, and 32% of the third, because a subscription that already includes the tax work has no separate preparer line.
Three founder profiles, three correct answers
The solo SaaS founder with no funding plans. $8,000 MRR, one product, customers in forty countries, no intention of raising. Wyoming LLC, modular agent, independent 5472 preparer. Three-year basket $2,076, or $692 a year. This is the configuration the $876 row exists for, and it is the one that makes the US LLC route obviously cheaper than a 5% Merchant of Record.
The founder who will raise in 18 months. Delaware C-Corp, standard equity documents, the full Atlas pipeline. Three-year basket $3,250 with a preparer, plus the corporate and franchise filings a C-Corp adds. The extra $300 to $450 a year is the entry ticket to the financing market, and it is cheap relative to a botched conversion.
The founder who wants one invoice and no admin. Doola Total Compliance at $1,999 a year, or Starter at $297 if the tax work is handled elsewhere. You are buying the removal of a monthly admin task, not the lowest total. That is a legitimate purchase, as long as you know you are paying roughly $5,000 over three years for it compared with the modular route.
The payback, in revenue terms
The whole entity decision only makes sense against the processing bill it is meant to reduce. At $8,000 MRR with a $40 average order value, a 5% Merchant of Record costs 5% plus about 50 cents per order: $500 a month, which is $6,000 a year. Stripe's US card rate plus the 1.5% international surcharge on a 70% international card mix charges $376 a month in processing fees on the same volume.
Spread the three-year totals over three years and add the $400 preparer allowance, and the annual holding cost of each route is: Firstbase Wyoming $692, Stripe Atlas Delaware LLC $933, Doola Total Compliance $2,059.
| Route at $8,000 MRR, $40 AOV, 70% international | Annual holding cost | Monthly all-in | Annual result vs 5% MoR |
|---|---|---|---|
| Firstbase · Wyoming LLC + preparer | $692 | $433.67 | +$796 saved |
| Stripe Atlas · Delaware LLC + preparer | $933 | $453.78 | +$555 saved |
| Doola Total Compliance · Wyoming | $2,059 | $547.58 | −$571 lost |
| Stay on the 5% Merchant of Record | $0 | $500.00 | baseline |
Processing: Stripe rate = 2.9% + 70% × 1.5% international = 3.95%, plus $0.30 × 200 orders. MoR = 5% × $8,000 + $0.50 × 200 orders. Annual holding cost = three-year total ÷ 3, plus $400 per year of Form 5472 preparation (included in the Doola Total Compliance basket).
The same arithmetic runs backwards into a break-even. With a 3.95% processing rate and a $40 average order, each dollar of monthly revenue contributes 1.55 cents of advantage to the self-managed route: 1.05 points of rate plus 20 cents of fixed-fee difference spread across $40. Divide a structure's monthly holding cost by 0.0155 and you get the revenue at which that structure starts to pay for itself.
| Structure | Monthly holding cost | Break-even MRR | Verdict at $8,000 MRR |
|---|---|---|---|
| Firstbase · Wyoming LLC + preparer | $57.67 | $3,720 | clears by $4,280 |
| Stripe Atlas · Delaware LLC + preparer | $77.78 | $5,018 | clears by $2,982 |
| Doola Total Compliance · Wyoming | $171.58 | $11,070 | $3,070 short |
Read the last column as a sentence: the state and package you choose decides which revenue levels make a US company rational at all. Wyoming plus a modular agent starts paying at $3,720 MRR. Delaware-only starts at $5,018. A $1,999 all-in compliance subscription needs $11,070 MRR before the structure is cheaper than simply paying a Merchant of Record 5%.
That is the entire argument in one paragraph: the entity is a cost centre attached to a processing saving. Pick the cheapest structure that legally supports the saving you are chasing, and spend the difference on the filing that carries the $25,000 penalty.
Run your own card mix before you choose a state
The calculator uses the same formulas as this article and rewrites its URL as you move the sliders, so the link you share is the scenario you priced. Load the 70% international, $8,000 MRR case below and change one input at a time.
- Load $8,000 MRR / 70% international →
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- Read the full teardown with every table and source note →
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If the arithmetic says form the company
Formation is the next decision, not the first one. Verify the state fee, the agent renewal and the 5472 quote for your own facts before paying for anything.
Start a US LLC with Firstbase ($399 + state fee) ↗
Affiliate link: a commission may be paid at no extra cost to you. Firstbase's $399 package excludes state fees and optional add-ons such as the registered agent service.
Method and sources
Every number in this article is a multiplication of a published rate by the number of years it recurs. The model is deliberately boring: no promotional pricing, no first-year discounts, no referral credits, and no assumption that any provider waives a renewal. Where a provider publishes a range, the model uses the conservative end for that provider.
- Firstbase formation package and registered agent add-on: Firstbase published pricing, verified October 2026.
- Stripe Atlas formation package and registered agent renewal: Stripe published pricing, verified October 2026.
- Doola Starter ($297/year) and Tax and Compliance ($1,999/year, plus state fees): Doola published pricing, verified October 2026.
- Wyoming annual report ($60 minimum), Delaware LLC franchise tax ($300) and C-Corp minimum franchise tax ($450): state fee schedules, verified October 2026.
- Form 5472 with pro forma Form 1120 for foreign-owned disregarded entities, and the $25,000 penalty: IRS instructions and published guidance.
If your facts differ — multiple states, employees, sales tax nexus, a conversion, a real funding round — replace the inputs. The structure of the calculation does not change, and it will still tell you which line is dominating your bill.
Related research on this site: The 5% MoR Illusion: exact US LLC + Stripe breakeven, and the live payment calculator.
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