LLC Wyoming vs Nevada:
Which state is better for registering a foreign-owned US LLC, Wyoming or Nevada? Well, that depends.
While both states are popular choices for non-US residents looking for fewer corporate formalities, more robust privacy, and lower administrative costs, they aren’t suitable options for everyone.
In this article, we’ll share the Nevada and Wyoming LLC pros and cons, how to choose where to incorporate, and other considerations to help you make an informed decision on where to register your foreign-owned US LLC.
Feel free to use the table of contents to jump ahead to the sections that are most relevant to you.
Table of Contents
- Wyoming LLC Pros & Cons
- Nevada LLC Pros & Cons
- How to Choose Where to Incorporate?
- What About the State of Delaware?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
Wyoming LLC Pros & Cons
Wyoming LLCs are best known for privacy, their potential as a tax-efficient structure, and low filing and reporting costs. But, to benefit from these points, foreign-owned US LLCs need to follow specific guidelines.
For example, to benefit from not having to pay US taxes, your LLC needs to be owned by a non-US resident, have no physical operations in the US, and be treated as a pass-through entity or partnership.
However, it’s important to note that while you might not be required to pay US taxes, your LLC is still required to file informational returns with the IRS, and you might be liable for taxes personally, depending on your country of residence.
Foreign-owned US LLCs unlock numerous advantages and Wyoming LLC benefits when registering an LLC in Wyoming. We share these specific pros below, along with the cons.
Wyoming LLC Pros
- Lower setup costs compared to LLCs in other states
- Owner’s identities can be kept off public records (LLCs can nominate a registered agent as the company’s authoritative person for public records instead)
- Exemption from corporate income taxes for out-of-state activities
Wyoming LLC Cons
- Out-of-state Wyoming US LLCs do not qualify for asset protection
- Reinstating your Wyoming LLC is nearly impossible if you neglect to pay annual fees for two consecutive years
- Wyoming LLCs are less common than Delaware LLCs, which means bankers are sometimes less familiar with them
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Nevada LLC Pros & Cons
Nevada and Wyoming share many similarities when it comes to registering foreign-owned US LLCs. But ultimately, the differences come down to the administrative costs, privacy protection, and rules surrounding formation and maintenance.
Let’s take a closer look at the pros and cons of registering a Nevada LLC.
Pros
- No income or franchise tax
- Owner’s identities are not a matter of public records
- No requirement for annual meetings
Cons
- Initial filling fees can cost up to US $400 (price will vary if you hire a registered agent or a corporate service provider)
- Annual fees can total approximately US $325 per year
- Unlike Wyoming, Nevada requires a state business license which costs US $200
Compared to other states, like Wyoming, Nevada’s filing fees tend to be higher.
How to Choose Where to Incorporate?
Choosing the right state to incorporate a foreign-owned US LLC will depend on your company’s operations, tax objectives, and filing requirements.
So, before choosing a state, you should review the state’s regulations, filing requirements, privacy considerations, the bank’s account opening process, and whether or not you can open a virtual bank account with a routing number for your business. This will ensure you are choosing the best possible state for you and your business.
What About the State of Delaware?
The state of Delaware, similar to Wyoming and Nevada, offers privacy for owners and shareholders. Registering a foreign-owned US LLC here can also be potentially tax-efficient depending on your tax status and US business activities.
But, unlike Wyoming, registration and annual filing fees align more with Nevada.
Frequently Asked Questions
Below are three of the most common questions that we receive from people interested in the difference between registering an LLC in Wyoming vs Nevada. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is It Better to Incorporate in Nevada or Wyoming?
The best option for you will depend on the state’s cost to incorporate, reporting requirements, privacy considerations, and your ability to open a business bank account.
Why Is It Better to Form an LLC in Wyoming?
Forming an LLC in Wyoming can be less expensive than in many other states. In fact, Wyoming is one of the most affordable states for registering an LLC in the US.
Can a US LLC Operate Tax-Free?
Yes a US LLC can operate tax-free (in the US) if you have no business activities in the US. That said, it will also depend on your personal tax status and also which state you choose to incorporate in.
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