Domestic vs. Foreign LLC in California
A domestic LLC is formed in California. A foreign LLC is formed elsewhere but registered in California. If you operate in CA, you owe the $800 franchise tax either way — making domestic formation the simpler and usually cheaper choice. See all LLC types or our formation guide.
Key Point
The $800 annual franchise tax applies to both domestic and foreign LLCs doing business in California. There is no tax escape by forming in another state if you operate in CA. This is the fundamental fact that makes most "form in Wyoming/Nevada/Delaware" advice irrelevant for CA-operating businesses.
Comparison
| Domestic CA LLC | Foreign LLC in CA | |
|---|---|---|
| Formation fee | $70 | $70 (CA registration) + home state fee |
| Franchise tax ($800) | Yes | Yes |
| LLC fee (>$250K) | Yes | Yes (on CA-source income) |
| State income tax | Yes | Yes (on CA-source income) |
| Compliance states | 1 (CA only) | 2 (CA + home state) |
| Agents for service of process needed | 1 (CA) | 2 (CA + home state) |
When to Form Domestic (Most Cases)
Ready to get started?
Get Started- You operate in California
- You want simplest compliance (one state)
- You want lowest cost (no dual-state fees)
When to Register Foreign
- You already have an established LLC in another state
- You specifically need another state's LLC law (Delaware for VC)
- You operate in multiple states with CA as secondary
FAQ
Does forming in Nevada save California taxes?
No. Nevada has no state income tax, but if you operate in CA, you still owe CA franchise tax ($800) and CA income tax on CA-source income. Nevada formation provides zero CA tax benefit.