Cost of Registration and Maintenance.
For many clients costs or registration and consequent maintenance of an entity plays critical role in choice of state and entity. In that sense most states have similar costs for LLCs and corporations, with a few notable exceptions:
New York LLC: though the cost of NY corporation is relatively low, cost of LLC is unproportionally high, due to bigger state fees and especially due to the publication requirement, which only applies to LLCs and some other entity types, but not corporations.
Illinois LLC: another state where cost of LLC is significantly higher than the cost of corporation, primarily due to state fee differences.
Tax Related Differences
The most crucial difference between LLC and Corporation are tax related. First, its important to understand that the only type of corporation available for foreigners who are not U.S. citizens or permanent residents is C-Corporation. Perhaps you heard about S-Corporation, but this is irrelevant for non-U.S. persons so we will skip discussing it.
LLC is a pass-through entity, which means the profit and loss passes through the company to the owners, who pay their personal taxes on that profit. C-Corporation is a double taxation entity, which means net corporate profit is taxed first (both on federal level and on state level, if the state has income tax), and then dividends are distributed to shareholders, who in turn pay their income tax on those dividends.
Does that mean corporation is necessarily bad, and LLC is necessarily good? Nope, it only means that corporation permits some wiggle room for creative tax planning, while LLCs are pretty much straight forward entities. Curious fact, one of the reasons we love LLCs so much is the fact an LLC is a flexible entity, that can elect to be taxed as C-Corporation, if the management deems it more beneficial from tax point of view.
We have the entire section of this article dedicated to taxation, as well as an entire article dedicated to taxation of foreign-owned U.S. companies, so we recommend you to study those. Also, it is always a good idea to consult with a CPA (accountant) before making your final decision on what type of entity to register. Remember, LLCs are flexible, so chances are you won't go too wrong by choosing an LLC as your entity type.
Conclusion
We often suggest LLC as the entity of choice, due to it being a less formal entity to maintain, and due to its flexible taxation. Some cases would justify going with corporation, so before making this decision make sure you fully understand what having a corporation in the particular