Florida and Texas are two popular states for entrepreneurs and digital nomads looking for a home base. Both locations offer tax-friendly environments, business-friendly laws, and large populations to market to. However, there are key differences that could make one a better fit for your goals, particularly when it comes to privacy, asset protection, taxes, legal structure, and long-term costs.
In this guide, we'll compare how incorporating in Florida and Texas can ultimately impact your business, allowing you to make the best choice for your LLC.
Privacy and public records
Ask any business owner what the single most important factor is in choosing a a home base for their business, and chances are they’ll say privacy. After all, 74% of Americans say it is “very important” to control who can access information about them.
When you form an LLC, the names and addresses of members and managers typically become part of the public record. Let’s take a look at how Florida and Texas compare in this arena:
Florida
Florida law requires full transparency when it comes to LLC ownership. As part of filing your Articles of Organization, you must list the name and address of every person involved in managing the LLC. This information becomes part of the public record, and unfortunately, there’s no way to opt out. Florida does not allow anonymous LLCs, so that’s not a viable option either.
Some business owners attempt to get around this with the “double LLC” strategy, where one LLC is owned by another to obscure individual names. However, this approach is risky and often draws unwanted scrutiny. It’s not considered a reliable or sustainable method for maintaining privacy.
That said, there is a silver lining: while your name must still be listed, using a virtual address service can help keep your personal address off the public record. By using a commercial business address, such as one from a virtual mailbox or mail forwarding service, you can list that address on your LLC filings instead. This allows you to maintain a layer of privacy and reduce the risk of having your home address show up in public databases, marketing lists, or unsolicited mailings.
Texas
Texas also requires transparency, but with a slight twist. Your Certificate of Formation must include the name and address of those managing the LLC. Like Florida, Texas does not permit fully anonymous LLCs.
However, Texas does allow a bit more flexibility. If you set up your business as a manager-managed LLC, you can list only the manager’s information in your filing. This means you can appoint someone else, like a hired manager or another business entity, to represent the LLC publicly. The downside is that the manager will gain control over business operations and may need to be paid a salary for their duties.
Who’s the winner?
While both states require the disclosure of key individuals, Texas gives you more room to structure your LLC for partial privacy through a manager-managed setup.
Asset protection
One of the biggest advantages of forming an LLC is the ability to shield your personal assets from lawsuits or business debts. However, not all states offer the same level of protection. The rules around asset protection can vary depending on whether your LLC has one member or multiple members. Here’s how Florida and Texas stack up in this category:
Florida
Florida offers strong protections for multi-member LLCs through something called “charging order protection.” This means if someone wins a lawsuit against you personally, they can’t seize control of your business or its assets; they’re limited to collecting distributions (if any are made). The downside? This protection does not extend to single-member LLCs. If you’re the only owner, a creditor could potentially seize your entire interest in the LLC.
The state does protect members and managers from personal liability for most debts and obligations of the company. That means if someone sues your business, your home, car, and savings are generally safe, as long as your LLC is treated as a separate legal entity. This is generally done by keeping separate bank accounts, avoiding co-mingled funds, maintaining records, and signing contracts on behalf of the LLC.
Texas
Texas also protects members and managers from personal liability in lawsuits, but it goes a step further when it comes to asset protection. Charging order protection applies to both single-member and multi-member LLCs in Texas, giving entrepreneurs an added layer of security. That alone makes it a stronger option for people running businesses on their own.
Texas also allows for the creation of Series LLCs, which can help separate business assets into individual compartments. If one “series” gets sued, the others are protected. This can be especially useful for real estate investors or companies with multiple revenue streams.
Who’s the winner?
Since Texas protects single-member LLCs and offers series LLCs, it is a stronger option for asset protection, particularly for entrepreneurs working alone or managing multiple businesses.
Note: The Florida Legislature recently passed a new bill that will allow business owners to form a series LLC within the state. The new law will take effect on July 2, 2026.
Tax benefits
Every dollar counts when you’re building a business, so it’s worth comparing how each state treats taxes. Both Florida and Texas are income-tax-free states, but they differ in how they tax business entities.
Florida
Florida does not impose a personal income tax, which means you only pay federal income tax on your earnings. That’s a big plus for business owners who are operating as sole proprietors or partnerships through their LLCs.
Most Florida LLCs are not subject to corporate income tax because they are pass-through entities. If you elect to be taxed as a C corporation, you’ll pay a flat 5.5% corporate income tax. Florida also does not impose an annual LLC tax just for existing, which keeps ongoing costs low.
On the sales tax front, businesses selling physical products in Florida need to collect 6% in state sales tax, plus up to 1.5% in local surtax depending on the county.
Texas
Texas also does not have a personal income tax or corporate income tax. Instead, the state imposes a franchise tax based on your LLC’s revenue. The good news? If your business brings in less than $2.47 million per year (as of 2024), you don’t have to pay the tax.
Texas sales tax is 6.25% statewide, and local jurisdictions can tack on up to 2%, depending on your business location.
Who’s the winner?
Florida wins this round for smaller LLCs and entrepreneurs. But for larger, fast-growing companies or those interested in C corp taxation, Texas could offer better scalability.
Legal infrastructure and business climate
The legal environment of a state can impact how disputes are handled and how friendly the state is to business owners in general. Here’s how Florida and Texas compare:
Florida
Florida courts have a long history of siding with businesses in industries like real estate, healthcare, and tourism. The state also offers favorable protections for personal assets, such as unlimited homestead exemptions for your primary residence. This can be especially appealing to Florida residents who own homes.
Business owners can choose between member-managed and manager-managed structures for LLCs, giving them flexibility in how they run operations and disclose information.
Texas
Texas is known nationwide for being business-friendly. Its court system tends to favor business interests in legal disputes, especially in the tech, energy, and real estate sectors. The state actively attracts businesses through low taxes and regulatory simplicity. Like Florida, Texas allows for flexible LLC structures and management styles.
Who’s the winner?
This one’s a tie. Both states are highly regarded for their legal and business environments, and each caters well to different industries and business models.
LLC formation and maintenance costs
Startup costs can vary significantly between states, and the cost to maintain your LLC year after year can impact your decision. Let’s take a look at the costs associated with incorporating in Florida and Texas:
Florida
To get started in Florida, you’ll pay $125 to file your Articles of Organization. Your major recurring cost will be the state’s annual report fee, which costs $138.75 and is due each year by May 1st. If you miss the deadline, the late fee is $400, so you may want to put that one on your calendar.
Texas
Forming an LLC in Texas comes with a higher initial filing fee of $300. The big advantage, however, is that Texas doesn’t require an annual renewal fee. So even though it’s more expensive upfront, it may cost you less over time if your LLC brings in under $2.47 million and avoids the franchise tax.
Who’s the winner?
Texas takes the lead in the long run. Its lack of annual report fees and franchise tax exemption for lower-revenue businesses means you can save more over time, even if you pay more on day one.
Which state should you choose?
As with most things in life, there’s no one-size-fits-all answer. It’ll ultimately depend on what your business’s needs are.
Whichever state you choose, setting up a virtual mailbox with a real street address is a smart move for remote businesses. It adds professionalism, protects your home address, and helps you stay compliant, all while giving you the freedom to run your business from anywhere.
VPM offers secure virtual mailbox and registered agent services in both Florida and Texas. Choose the state that fits your business best and let us help you simplify your setup.
