How to Start an LLC in South Dakota (2026): Step-by-Step Guide

Published: June 2026 · Updated for the 2026 tax year

South Dakota is the state people pick when they want an LLC that's cheap to run, generates no state income tax return, and keeps their name off a public form. All of that is true. This guide walks through every step, what a South Dakota LLC actually costs year by year, when forming here instead of your home state actually helps (and when it doesn't), how to form one from outside the US, and what to do in your first 90 days.

Form your South Dakota LLC for free with Jupid. We prepare and file your Articles of Organization — you pay the state's $150 filing fee, with no service markup. Start your South Dakota LLC →

A note from Slava

I'm Slava, co-founder and CEO of Jupid. Before this I co-founded and scaled an AI-powered accounting platform to around $30M in revenue and more than 100,000 business users — which means I've helped a lot of location-independent founders set up in low-tax states, and seen the two ways South Dakota goes wrong.

The first is assuming a South Dakota LLC erases tax you owe somewhere else. South Dakota has no income tax, and that's a real, durable advantage. But if you live and work in, say, California or New York, a South Dakota LLC doesn't move your tax home. You'd register the SD LLC as a foreign LLC where you actually operate, pay that state's fees and taxes, and keep a registered agent in two states — usually more paperwork for no saving.

The second is the Form 5472 trap. If you're a non-US person who owns a single-member South Dakota LLC, there's a federal filing — Form 5472 with a pro-forma 1120 — that's due every year even if the LLC made nothing, and the penalty for missing it is $25,000. Almost no South Dakota LLC guide mentions it. This one does.

Everything here is current for 2026, with links to the official sources so you can verify before you file.

South Dakota LLC at a glance

Sources: South Dakota Secretary of State — Filing Fees, South Dakota Secretary of State — LLC forms, South Dakota Department of Revenue — Business Tax.

Should you actually form your LLC in South Dakota?

South Dakota is the right call for a fairly specific (but very common) profile: you're location-independent. An online business with no physical footprint, a non-US founder with no US presence, a holding company for assets or other entities, someone who genuinely doesn't operate out of any particular state. For that profile, South Dakota is hard to beat — $150 to file, about $55 a year, no state income tax, no franchise tax, and members don't have to appear on the public record. South Dakota's well-earned reputation for trust-friendly law is part of why people look here, though that's a trust story more than an operating-LLC one.

It's the wrong call if you have a physical presence somewhere else. If you live in California and run your business from California, a South Dakota LLC doesn't help you: you'd register it in California as a foreign LLC, pay California's fees and its $800 franchise tax, keep a registered agent in both states, and end up paying more for more paperwork. The same logic applies to any state where you have an office, employees, or inventory — "doing business" there means registering there. Forming in South Dakota and operating in another state is the classic mistake; if that's you, form where you operate.

People also weigh South Dakota against the other no-income-tax states. It's in the same league as Wyoming on cost and privacy, and cheaper than Nevada, which charges a $350-a-year combination of annual list and business license. Our best state to form an LLC tool walks through the trade-offs side by side.

If South Dakota is right for you, here's how.

How to start an LLC in South Dakota, step by step

1. Choose and check your LLC name

Your name has to include "Limited Liability Company," "LLC," "L.L.C.," "Limited Company," "LC," or "L.C." ("Limited" can be shortened to "Ltd." and "Company" to "Co."), and it has to be distinguishable from every other entity on the Secretary of State's records. Search the South Dakota Business Information Search before you get attached to anything. Want ideas or want to test a few options at once? Our South Dakota business name generator is built for exactly that. If you want to lock a name in before you file, a Reservation of Name is $25.

2. Appoint a South Dakota registered agent

Every South Dakota LLC must keep a registered agent with a physical South Dakota street address — no P.O. boxes — and the agent must be available during business hours. You have three options: be your own agent if you're an SD resident, use a friend or family member in South Dakota, or hire a commercial registered agent. The agent's name and address go on the public record, governed by South Dakota's Model Registered Agent Act (SDCL Chapter 59-11). If you don't live in South Dakota — the usual case for people forming here — you'll hire a commercial registered agent, which runs roughly $100–$300 a year. For a non-resident, this is the one South Dakota cost you genuinely can't skip.

3. File the Articles of Organization

This is the document that creates your LLC. File it online through the Business Services portal for $150 (filing by paper is $165, which includes a $15 paper processing fee, and is slower). You'll list the LLC name, the registered agent's name and South Dakota address, the principal office, and the management structure. Members don't have to be named. Online filings are approved immediately — you can download the stamped Articles the same day, which your bank will ask for.

4. Write an operating agreement

South Dakota doesn't legally require an operating agreement, but you should have one. Your bank will ask for it, and it's part of how you keep personal and business liability separate. Cover ownership percentages, profit splits, decision-making, and what happens if a member leaves. Even a single-member LLC should have one. You don't file it with anyone — keep it with your company records.

5. Get your EIN from the IRS

An EIN is your LLC's federal tax ID — you need it to open a bank account, hire anyone, and file taxes, and it's free. Apply at irs.gov; with an SSN or ITIN the online application takes a few minutes. Without one (common for non-resident owners), file Form SS-4 by fax or mail, or call the IRS international EIN line — see the non-resident section below. Never pay a third party for the EIN itself; the number is always free from the IRS.

6. Open a US business bank account and set up bookkeeping

Bring the EIN confirmation letter, the filed Articles, the operating agreement, and your ID. Traditional US banks usually want the owner present; several fintech business-banking platforms onboard foreign-owned US LLCs remotely (policies change — check current terms). At the same time, set up bookkeeping — especially if you're a foreign owner, because you'll need a clean record of every dollar moving between you and the LLC for the Form 5472 filing.

7. Calendar your annual report

Every year, file the South Dakota Annual Report during your formation anniversary month. It's $55 filed online ($70 by paper). The Secretary of State tracks your exact due date and emails a reminder, and lets you file up to about a month early — but the reminder is a courtesy, not a guarantee, so calendar it yourself. Miss it and your LLC is marked delinquent (a $50 late fee), and continued failure to file is the number-one reason South Dakota administratively dissolves LLCs.

What a South Dakota LLC really costs, year by year

Most guides quote "$150 plus $50" and stop — and the $50 is already out of date, because South Dakota raised the online annual report fee to $55 on July 1, 2025. Here's the fuller picture.

Year one

Every following year

That's about as cheap as state-level LLC compliance gets. For comparison, Wyoming is about $60 a year, Nevada is $350 a year, and California is $800 a year minimum. The catch — and it's a real one — is that the cheap South Dakota fees only stay cheap if South Dakota is genuinely where your business "lives." If you also operate in another state, add that state's foreign-registration fees and a second registered agent, and the math changes.

Watch for: the $15 paper processing fee if you print and mail the annual report instead of filing online; the sales-tax license with the South Dakota Department of Revenue if you have South Dakota sales-tax nexus (most pure-online non-resident LLCs don't); and the Form 5472 / pro-forma 1120 preparation cost if you're a foreign owner (the IRS form is free; getting it done right isn't, but it's far cheaper than the $25,000 penalty).

DIY versus a formation service versus Jupid. Doing it yourself through the state portal is genuinely easy. A formation service charges $0–$300 on top of the state fees and then upsells you a registered agent and a "compliance" subscription. Jupid forms your South Dakota LLC for free — you pay only the $150 state fee — and then handles the bookkeeping and the federal tax filings afterward, which for a South Dakota LLC (especially a foreign-owned one) is where the real work lives. To model the annual numbers for your situation, use our South Dakota LLC annual cost calculator.

Forming a South Dakota LLC as a non-resident or foreign founder

This is a big part of South Dakota's audience, so here's the path in detail.

Registered agent first. You need a South Dakota registered agent with a physical South Dakota street address. With no SD address of your own, that means a commercial registered agent — budget $100–$300 a year. Line this up before you file, because the agent's information goes in the Articles.

File the Articles online. Through the Business Services portal, $150. No SSN is needed to form the LLC, and members aren't named on the form.

Getting an EIN without an SSN. The IRS online EIN tool requires the responsible party to have an SSN or ITIN, so foreign founders generally can't use it. File Form SS-4 instead: where it asks for the responsible party's SSN/ITIN/EIN, write "Foreign" or "N/A" — don't invent a number. Submit by fax or mail, or call the IRS international EIN line (it's not toll-free), where someone outside the US can get the number over the phone. Check the current Form SS-4 instructions for the right fax and phone numbers, since the IRS changes them. Fax turnaround is usually about four business days; phone is immediate. The EIN is free.

ITIN. An ITIN (Form W-7) is a tax ID for individuals who can't get an SSN. The LLC gets an EIN; you as an owner may separately need an ITIN if you have a US personal filing obligation — for instance, if the LLC is engaged in a US trade or business and you have to file a Form 1040-NR. It's separate from the LLC's EIN.

The Form 5472 obligation — this is the one to remember. A single-member LLC owned by a non-US person is a "disregarded entity" that must file Form 5472 attached to a pro-forma Form 1120 every year — even with zero income — reporting transactions between the LLC and its foreign owner, including capital you put in. The penalty for failing to file (or filing late or substantially incomplete) is $25,000, and it can't be e-filed by a disregarded entity (paper or fax only). A US-owned single-member LLC files a Schedule C instead, and a multi-member LLC files Form 1065 — so this specific filing is a foreign-single-member thing. Build it into your annual calendar from day one and keep clean books.

US bank account. Traditional banks usually want the owner present, plus the formation documents, the EIN confirmation letter, the operating agreement, and a passport. Several fintech business-banking platforms onboard foreign-owned US LLCs remotely — eligibility and policies change, so check current terms. A South Dakota commercial registered agent's street address often helps satisfy "US address" fields.

State tax. South Dakota has no income tax and no franchise tax on the LLC's profits, so there's no South Dakota return on what the LLC earns. But your federal obligations are real (effectively-connected-income rules, possible withholding, the Form 5472 filing above), and so is tax in any state where the business actually operates. South Dakota saves you South Dakota tax — it doesn't save you tax somewhere you have real activity.

Registered agents and the Corporate Transparency Act (BOI)

Your South Dakota registered agent is the person or company designated to receive legal papers and official notices, and its name and South Dakota address are public. Out-of-state owners and South Dakota residents who'd rather not list their own address both use commercial agents.

On the federal beneficial-ownership side: under the Corporate Transparency Act, LLCs originally had to file a Beneficial Ownership Information (BOI) report with FinCEN. That changed in March 2025, when FinCEN's interim final rule narrowed "reporting company" to mean only entities formed under foreign law that register to do business in a US state. As of early 2026, that means a South Dakota-formed LLC — including one owned by a foreign person — has no BOI filing obligation. FinCEN has said it intends to issue a final rule (expected during 2026, and expected to generally align with the interim one), so treat this as something to re-check rather than something settled — verify at fincen.gov/boi. (If you register a foreign-formed entity to do business in South Dakota, that entity may still have a BOI filing to make.)

Your first 30, 60, and 90 days

Days 1–30

• Get your EIN from the IRS (free; online if you have an SSN/ITIN, otherwise by fax, mail, or phone).
• Adopt a written operating agreement — kept with your records.
• Open a US business bank account (EIN letter, filed Articles, operating agreement, ID).
• Confirm your registered agent is correctly listed and reachable in South Dakota.
• Check your BOI status — as of early 2026 a domestic South Dakota LLC has nothing to file; re-verify at fincen.gov/boi.

Days 31–60

• Set up bookkeeping — and if you're a foreign owner, set it up specifically to track money moving between you and the LLC for Form 5472.
• Register for a South Dakota sales-tax license with the Department of Revenue only if you have South Dakota sales-tax nexus (most online non-resident LLCs don't); register for reemployment insurance with the South Dakota Department of Labor & Regulation only if you hire in South Dakota.
• Get any industry or professional permits your work requires — in South Dakota or wherever you actually operate.
• Look into business insurance (general liability; workers' comp if you hire).

Days 61–90

• Calendar the South Dakota Annual Report — due during your formation anniversary month, every year. Confirm the exact date in the Business Information Search and set a reminder about 45 days out.
• If you operate in another state, register the South Dakota LLC there as a foreign LLC before you're "doing business" there.
• (Foreign-owned single-member LLC) Confirm your plan for the annual Form 5472 + pro-forma 1120 filing — who's preparing it, and what the deadline is.

Common mistakes with South Dakota LLCs

Forming in South Dakota to dodge your home-state tax. Why it hurts: if you live and operate in another state, that state still taxes you — and the SD LLC has to register there as a foreign LLC, so you owe its fees and a second registered agent on top. You pay more, for more paperwork, and save nothing. Fix: if you have a real physical presence somewhere, form there; reserve South Dakota for genuinely location-independent businesses.

Missing the anniversary-month annual report. Why it hurts: the due date is tied to your formation month, not a fixed calendar date, so it's easy to forget — and missing it gets your LLC marked delinquent ($50 late fee) and eventually administratively dissolved. Fix: put your anniversary month on the calendar with a 45-day warning, and confirm the exact date in the SOS Business Information Search.

Treating "members not on the Articles" as full anonymity. Why it hurts: you make decisions (skip a written operating agreement, assume regulators can't see you) that don't hold up — banks, the IRS, and courts all see the owners. Fix: use South Dakota's privacy for what it is (keeping your name off a casually-searchable public form) and run the LLC properly otherwise.

Ignoring Form 5472 as a foreign owner. Why it hurts: a $25,000 penalty for a filing many people have never heard of. Fix: set up the pro-forma 1120 + 5472 process in year one and keep records of every transfer between you and the LLC.

How Jupid helps

Jupid forms your South Dakota LLC for free — you pay only the state's $150 filing fee, with no service markup and no surprise "compliance" subscription. After that, Jupid is your AI accountant, working in WhatsApp and iMessage the same way you already text. It connects to your business bank account, automatically categorizes your transactions (around 95.9% accuracy), keeps your deductions organized, and prepares your tax filings with CPA review before anything is submitted. For a South Dakota LLC the $55 annual report you'll just pay — but the federal return, and Form 5472 if you're a foreign owner, are the part that actually takes work, and that's the part Jupid does for you. Start your South Dakota LLC free with Jupid →

Frequently asked questions

How much does it cost to start and run a South Dakota LLC in 2026? The Articles of Organization cost $150 to file online ($165 by paper). After that, the South Dakota Annual Report is the only recurring state fee — $55 online ($70 by paper), due each year during your anniversary month. A non-resident also pays a commercial registered agent, usually $100–$300 a year. There is no state income tax and no franchise tax on the LLC's profits.

Does South Dakota have a state income tax on my LLC? No. South Dakota has no individual income tax and no corporate income tax, and no franchise tax on ordinary LLCs. LLC profits pass through to the owners with zero South Dakota state income tax. You may still owe federal tax and tax in whatever state you actually operate in.

Do I need a registered agent for a South Dakota LLC? Yes. Every South Dakota LLC must keep a registered agent with a physical South Dakota street address — it can be you (if you're an SD resident), a friend or family member in SD, or a commercial registered agent. P.O. boxes aren't allowed, and the agent's name and address are public record.

Can a non-US resident own a South Dakota LLC? Yes. South Dakota has no citizenship or residency requirement for members or managers. You'll need a commercial registered agent in South Dakota and an EIN (which you can get without an SSN). A single-member LLC owned by a non-US person must also file Form 5472 with a pro-forma Form 1120 every year — the penalty for missing it is $25,000.

When is the South Dakota LLC annual report due? It's due every year during your LLC's formation anniversary month — the month you formed the LLC. The Secretary of State tracks your exact due date and lets you file up to about a month early; confirm the date in the Business Information Search. The fee is $55 online or $70 by paper, and a delinquent report draws a $50 late fee plus eventual administrative dissolution.

How long does it take to form an LLC in South Dakota? Online filings are approved immediately — you can download the approved Articles the same day. By mail it's about a week. Mail filings can be expedited to 24-hour for $50; online filings need no expedite because they're already instant.

Official sources

• South Dakota Secretary of State — Filing Fees (Articles of Organization $150/$165; Annual Report $55/$70; name reservation $25; expedited $50; reinstatement)
• South Dakota Secretary of State — LLC forms · Business Services Online portal · Business Information Search
• South Dakota Secretary of State — Annual Report instructions
• South Dakota Department of Revenue — Business Tax (no corporate income tax) · Sales & Use Tax (4.2% rate)
• IRS — get an EIN · About Form SS-4 · About Form W-7 · About Form 5472
• FinCEN — Beneficial Ownership Information
• Related on Jupid: South Dakota LLC formation · South Dakota LLC annual cost calculator · South Dakota business name generator · best state to form an LLC · Wyoming LLC guide · Nevada LLC guide

This guide is general information, not legal or tax advice. Fees, deadlines, and thresholds change — verify with the official sources above before you file.

Last updated: June 2026.