Wyoming LLCs: A Step-by-Step Guide from the Field
Contents
- Advantages and Benefits of a Wyoming LLC
- Steps to Start and Set Up an LLC in Wyoming
- Step #1: Choose a Business Name
- Step #2: Appoint a Registered Agent
- Step #3: File Articles of Organization
- Step #4: Draft an Operating Agreement
- Step #5: Fulfill Corporate Transparency Act Requirements
- Step #6: Obtain an EIN
- Step #7: Open a Business Bank Account
- Step #8: File the Annual Report and Update the Corporate Transparency Act
- Costs and Fees
- Wyoming LLCs within an International Wealth Protection Plan
- Wyoming LLCs versus Other Asset Protection LLC States
- Why We Prefer Wyoming
- Common FAQs
- Need Help?
We recently put together a Wyoming LLC for a married couple who had just completed our Private Wealth planning service. They have been buying properties in a popular expat jurisdiction and are looking for a way to protect these assets from domestic claims.
If you’ve been working on your wealth preservation plan, you’ve probably come across the states whose LLCs and other local laws offer a lot of asset protection—Wyoming, New Mexico, Delaware, and Nevada.
In this article, I’ll focus on what might just be our favorite domestic structure here at the Nestmann Group—the Wyoming LLC. We’ll look at what makes them so attractive, how to get the benefits of asset protection even if you live in another state, and how to incorporate them into your wealth protection plan no matter whether it’s domestic or international.
Advantages and Benefits of a Wyoming LLC
Privacy and Anonymity: Wyoming doesn’t require you to disclose owners (aka “members”) or manager names in public records. This ensures that personal information stays confidential.
Asset Protection: Wyoming offers strong legal protections, including single-member LLCs, which are vulnerable in most other states. The state’s laws make it difficult for creditors to penetrate Wyoming LLCs, protecting personal assets from business liabilities.
Flexible Management Setups and Taxation: Like all LLCs, Wyoming LLCs let members choose between member-managed or manager-managed setups. And by default, they are a pass-through entity, which helps you avoid double taxation.
Historical Context: Wyoming was the first state to create the LLC structure in 1977. Its long-standing reputation and business-friendly laws make it a popular choice for entrepreneurs.
When a Wyoming LLC is a Disadvantage
Although there are lots of good reasons to set up an LLC in Wyoming, it won’t work for everyone. Here are two examples:
#1: You want a Wyoming LLC to protect certain assets, but you don’t live in Wyoming.
If you don’t live in the state, a Wyoming LLC won’t necessarily give you any asset protection. Rather, the courts in your home state may “look through” your structure and decide that Wyoming law doesn’t apply.
There are ways to address this — a service we offer to our clients. But even if you don’t work with us, note that a Wyoming LLC has limited asset protection value unless you either live in the state or you put pieces in place to ensure the LLC falls under Wyoming law in case you’re ever attacked.
This is especially important if you live in very creditor-friendly states like California, New York, Massachusetts or New Jersey.
#2: You have an active business in another state.
If you live in a certain state and have customers in the same state, it’s likely that any claim will fall under the jurisdiction of your home state.
Again, there are ways to make your business a less attractive target, but you won’t get any protection under Wyoming law right out of the gate.
Steps to Start and Set Up an LLC in Wyoming
Setting up a Wyoming LLC is pretty fast and straightforward. Processing generally takes 24-48 hours. Here’s the process in brief:
Step #1: Choose a Business Name
First, you’ll need to choose a business name with three options from first preference to last. We’ll check to see if your first choice is too close to any other name. If not, you can have it. If so, we’ll move to the next name on your list and check again. Once we have a suitable name, we submit the application to the Wyoming Secretary of State.
Step #2: Appoint a Registered Agent
Wyoming law requires every LLC to have a registered agent — a person or entity authorized to receive legal documents on behalf of the LLC. It’s important to work with someone with a good reputation here.
Step #3: File Articles of Organization
The next step involves filing the Articles of Organization with the Wyoming Secretary of State. This can be done online or by mail. The filing includes providing basic information about your LLC — name choices, registered agent, and business purpose.
Nowadays, almost all of this is done online. Good services provide a seamless transaction from start to finish.
Step #4: Draft an Operating Agreement
While not legally required in Wyoming, we always recommend having an Operating Agreement. This document outlines the LLC’s management structure, member roles, and operating procedures. This will also help define how it fits into your wealth protection plan. The one we use is optimized for asset protection and can be modified to fit your particular needs.
Step #5: Fulfill Corporate Transparency Act Requirements
Starting in 2024, the Corporate Transparency Act (CTA) requires LLCs to file beneficial information with the Financial Crimes Enforcement Network (FinCEN). Annoying but very important — penalties can reach $500 per day for non-compliance. You need to do this within 30 days of registering the LLC.
(Also, if anything relevant to the CTA changes, you have 30 days to update your FinCEN filing. You might be fined otherwise.)
Filing this paperwork – and helping you keep it up to date – is a service many corporate service providers offer.
Step #6: Obtain an EIN
You’ll need an Employer Identification Number (EIN) for tax purposes. That comes from the IRS and is necessary to open a business bank account. Corporate service providers also can assist with this task.
Step #7: Open a Business Bank Account
Unless your LLC is to be used exclusively to hold assets, you’ll need a bank account. This is easy for Wyoming state residents but much harder if you live somewhere else. A good corporate service provider should be able to introduce you to a bank that will accept you.
We’ve seen it time and time (and time) again… Someone thinks they can do it on their own and sets up a structure. Then they find they can’t get a bank account open. In most cases, a structure isn’t much use without it. So before you set up anything new, make sure there’s a bank willing to take your business before you start moving paperwork around.
How we do it for our clients is to approach a bank ahead of time and float out the nature of the client’s business and what they want to do with it. Once we have this “approval in principle”, we’ll then set up the structure.
Step #8: File the Annual Report and Update the Corporate Transparency Act
Wyoming requires LLCs to file an annual report, which includes updating information about the business and paying a required fee. Failure to file can result in penalties or closing of the LLC. A good corporate service provider will make sure this report is filed on time.
Costs and Fees
Like any legal structure, there are various set up and maintenance costs and fees.
If you decide to do it yourself, you’ll find state set up fees are quite reasonable — around $100. You’ll also need a Wyoming registered agent, which costs start at $100 per year depending on services provided.
Then, you need to apply for an Employer ID number (EIN) from the IRS. You don’t need to pay the IRS to get one, but there’s a learning curve involved and it’s easy to make mistakes on the application.
Likewise with the CTA compliance. You’ll need to visit the Treasury’s Beneficial Ownership Information portal and file the required report using the BOI filing system. It’s not rocket science, but there’s again a learning curve and it is easy to screw up.
Next, there’s the Operating Agreement. You can download one for free from the internet, but it won’t be optimized for asset protection.
Then there’s the bank account. It’s not always easy to get one, especially if you live outside Wyoming. And there’s a lot of paperwork involved.
Fortunately, there are services that can perform these tasks for you. Getting an EIN, filing the CTA form, and opening a bank account on your behalf will cost around $300. A custom Operating Agreement to ensure your LLC both fits into your planning and offers the asset protection you want will start at $500-$1,000.
Ongoing costs are straightforward too. You’ll need to pay to file an annual report with the Wyoming Secretary of State (starting at $60 per year) and for your registered agent ($100-$500 per year depending on services offered.)
We help our clients meet all these requirements through our LLC formation and compliance service for a flat fee.
If you’re in a high-risk lawsuit situation (e.g. doctors, certain types of real estate investors, etc.) and asset protection is really important, there may be other fees involved. Feel free to get in touch to have us look at your situation.
Wyoming LLCs within an International Wealth Protection Plan
US-based LLCs generally, and Wyoming LLCs specifically, can serve as a good foundation for all sorts of international holdings.
In fact, in our own practice, we often recommend US clients who plan to stay in the US use a domestic LLC as a cornerstone of their own international investments. Here’s why:
- Strong international support: Providers like offshore asset managers, foreign banks, and international precious metals dealers — assuming they work with US clients — are usually more willing to work with a US LLC backed by an American than an American-backed foreign company.
- Better banking options: A domestic LLC backed by a US client has much better banking options both in the US and, strangely enough, with foreign banks too.
- Better estate planning: If estate planning is a consideration, US clients holding property overseas in a civil law country (e.g. Panama, Costa Rica, Mexico, most of continental Europe) are usually better off doing so with a domestic LLC than a local entity, or even in their own names.
Case Study: Mexican Real Estate and a Wyoming LLC
We regularly have US-based clients who buy a property or two (or ten) in Mexico. Mexico has something called the Restricted Zone, which prevents foreigners from buying in certain areas including within 50 km (31.07 miles) from any ocean.
Since the most desirable land is on the coast, the Mexicans have a workaround called a Fideicomiso aka a “Mexican Trust”. This is a common structure that protects the investor against claims from use of the Mexican property by renters, as well as claims to the investor from those in the US that might try to take the Mexican properties. The steps to set it up are as follows…
Step 1: Set up an LLC in Wyoming or another suitable state with the investor (or investors) as owners/members.
Step 2: Set up a Mexican Trust to take the title of the investment properties.
Step 3: Name the Wyoming LLC as beneficiary of the Mexican Trust.
Yes, there are still a number of considerations. The amount of asset protection needed will determine how the paperwork is framed. And a certain amount of tax planning needs to be done.
But the basic structure as outlined offers a lot of flexibility that can easily work for an investor holding one property, ten properties, or even 100.
Wyoming LLCs versus Other Asset Protection LLC States
Any discussion of Wyoming LLCs needs to include a brief review of other LLCs known for privacy and asset protection (the so-called “anonymous LLC” states.)
Delaware is renowned for its business-friendly legal system but comes with higher costs. Arizona and Nevada offer strong asset protection but lack Wyoming’s superior privacy. Arizona LLCs also don’t ever need to be renewed, so there’s no risk of them lapsing if you forget to pay an annual fee. New Mexico is also popular because it doesn’t require the disclosure of LLC members. But asset protection in a New Mexico LLC isn’t as good as Arizona, Nevada, or Wyoming.
Why We Prefer Wyoming
Ultimately, we like Wyoming LLCs because they offer the best mix of what we look for in a wealth protection tool — reasonable costs, strong asset protection backed by law, and very good privacy.
Common FAQs
How Do You Start an LLC in Wyoming?
Starting an LLC in Wyoming involves selecting a unique business name, finding a registered agent, filing the Articles of Organization with the Secretary of State, obtaining an EIN for tax purposes, opening a bank account, and complying with the new Corporate Transparency Act disclosure rules.
Why Shouldn’t You Form an LLC in Wyoming?
For holding companies, there’s rarely a reason not to consider a Wyoming LLC. However, if you live in another state, certain extra planning will be needed to make it work.
If you have an active business in another state, there’s nothing inherently wrong with a Wyoming LLC. However, it might not offer the protections you’re hoping for.
If you’re wondering if a Wyoming LLC is right for you, feel free to get in touch with us.
How Much Does It Cost to Set Up an LLC in Wyoming?
A full-service solution — including all state and legal fees — can range anywhere from $700 to $1,600 to set up and $200 – $600 in yearly fees to maintain.
How Do You Dissolve an LLC in Wyoming?
To dissolve an LLC in Wyoming, you’ll need to file Articles of Dissolution with the Secretary of State, settle any outstanding obligations, and pay any final fees.
Need Help?
As you can gather from this article, we are big fans of Wyoming LLCs. There’s no such thing as a “best” structure, but this comes close. Still, though, it needs to fit into your plan. A tool without a strategy is rarely helpful.
If you’re wondering if a Wyoming LLC should be part of your Plan B, feel free to book in a free no-obligation call with one of our Associates.
About The Author
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