The US state of Wyoming is not typically recognized as a true tax haven, yet it offers an ideal corporate environment for offshore company formation. There are two types of offshore corporate structures that can be formed in Wyoming: a Wyoming Corporation and a Wyoming Limited Liability Company (LLC). Wyoming LLC is generally the preferred and more popular of the two vehicles. The entities are regulated by the Wyoming Business Corporations Act and the Limited Liability Company Act. For simplicity, unless specifically stated otherwise, all information in this article pertains to the Wyoming LLC.
A Wyoming LLC offer several benefits for business owners. Their primary attraction is that owners achieve protection and limited liability status pertaining to company obligations in a similar manner to corporations, yet they receive the tax benefits of a partnership, in that there are zero direct corporate taxes due to the nature of the offshore LLCs pass-through tax structure. In addition to the attractive tax regime, a Wyoming LLC offers privacy, fast and affordable incorporation, and minimal reporting requirements. A Wyoming LLC is best suited for non-resident, non-citizens of the US to make the most of the tax structure and offshore corporate regime.
A Wyoming LLC consists of members. It does not issue shares and therefore has no shareholders or authorized share capital. It instead obtains its funding from member contributions and distributes its profits in the form of distributions to its to members.
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The following documents are required for incorporation:
Once the above documents are prepared and filed, the LLC can be approved in registered in as little as 5 days. The entire incorporation process, including the preparation and delivery of the abovementioned documents, usually takes 1 -2 weeks in total.
Wyoming LLC’s are taxed on a “pass through” basis. This means that there is zero corporate taxation applied to the company itself, and instead all profits/losses and capital gains are passed through to the member/s who are personally liable for taxes on an individual level. These taxes would take the form of personal income tax or capital gains tax.
This form of taxation can be highly beneficial for certain individuals depending on their personal tax situation and state/country of residence. If, for example, the owner resides in a tax haven or a jurisdiction with a territorial tax system which does not tax its residence on offshore income, they could effectively eliminate taxes entirely through a Wyoming Offshore LLC.
To maximize the tax benefits of a Wyoming Offshore LLC and avoid being liable for US federal taxes, the following criteria should be met:
If these requirements are met, the company will be deemed a non-resident LLC and will not be liable for any US taxation. Depending on members’ personal tax requirements, they may still be liable for taxes on profits and/or gains of the company in proportion of their ownership stake in the LLC. Thus, ownership should be based in a low-tax offshore jurisdiction.
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Anonymity, Confidentiality and Disclosure
Wyoming has strict privacy laws governing their corporate and financial activities. A Wyoming Offshore LLC therefore ensures high levels of confidentiality for its members. The names of the beneficial owners are not publicly available, nor is sensitive information about the company.
No minimum capital requirements.
A minimum of one member is required who can be a resident or non-resident natural person or corporate body. There is no maximum to the number of members permitted.
The members are usually in charge of managing the LLC, in which case it operates similarly to a partnership. It is also permissible for non-member managers to be employed who then report directly to the member/s. In this instance, the managers function in a similar way to the board of directors of a corporation.
If managers are not stipulated in the Articles of Organization, the LLC will automatically be managed by its members.
There are no mandatory trading restrictions, but in order to maximise the tax advantages, trade and income should be sourced from outside of Wyoming and the US.
Principal Corporate Legislation
The Wyoming Limited Liability Company Act sections 17-15-101 to 17-15-144 of the Wyoming State Code.
Type of Law
US common law.
Powers of the Company
A Wyoming LLC has all the same powers and rights as a natural person. It is regarded as a separate legal entity from its members. Therefore, a member’s liability is limited to their investment in the company alone.
Member meetings are not mandatory and can be held anywhere, both inside and outside of Wyoming State.
A registered local agent and local office is required. The name and address of the registered agent should be listed in the formation documents which forms part of the company’s public records. The agent is primarily responsible for receiving important tax and legal documents on behalf of the company. These include notices of litigation, franchise forms, and annual report forms.
A company secretary is not required.
Language of legislation and Corporate Documents
Audit and Annual Reporting Requirements
There are no auditing requirements. All LLC’s are required to file an annual report which confirms (and/or amends where needed) information such as the name of the company, the name and details of the registered agent, the primary office address and mail address. The license tax should be paid in conjunction with the due date of the annual report. The minimum license tax amount is USD 50.
Financial Statements required
Wyoming LLC’s are required to maintain financial accounting information, but the accounts do not need to be filed with the regulatory authorities and are not publicly available. The LLC is only required to file its annual report, which does not contain detailed accounting information.
Shelf Companies available
Shelf companies are available for faster incorporation; however, these are less popular as they are more expensive.
Time required to form an offshore company
It usually takes a total of 1 – 2 weeks to legalize and deliver all the required documents and receive final approval of company registration.
Company Name Requirements and Restrictions
According to the regulations of the Wyoming Limited Liability Company Act, the name of a Wyoming LLC must adhere to the following:
The name should be unique, and not deemed in any way similar to an existing Wyoming Company name,
The name must include the abbreviation/words “LLC”, “L.L.C.”, or “Limited Liability Company”,
Special permission is required to include words such as “Bank”, “Insurance”, “Reinsurance”, “Association”, “Academy”, “University”, “School” etc. in the name.
The name should not be deemed inappropriate or offensive by the governing authorities.
Access to Double Tax Treaties
Yes, as a US State, there are tax treaties with the wide range of countries which the US has active tax agreements with.
There is an initial fee of USD 100 for filing the Articles of Organization. Thereafter, there is an annual license tax calculated according to the value of the company’s assets which are located within the state of Wyoming (calculated as USD 0.0002 on the dollar), with a minimum of USD 50.
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*Note for U.S. citizens: US citizens are limited in their tax reduction possibilities due to FATCA and CFC laws. Opening an offshore company can increase privacy and asset protection, but you can not eliminate your taxes without giving up your citizenship. If you are a US citizen you are obligated to pay taxes on all worldwide income. Read more here about FATCA and CFC laws.
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