Set up a Wyoming Offshore Company Formation (LLC)
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Overview of a Wyoming Company Formation
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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Table of Contents:
- Overview Of A Wyoming Company Formation
- Advantages Of A Wyoming Company Formation
- Top Uses Of A Wyoming Company
- Key Corporate Features Of A Wyoming LLC
- Requirements For Incorporation Of An Offshore Company
- Taxation Of A Wyoming Offshore LLC
- Corporate Details Of A Wyoming Company
Advantages
- Tax advantages: 0% Corporate Income Tax
- Tax benefits are applied to Wyoming offshore LLC’s which do not conduct their business within the state or earn an income in the US. Member/s are taxed directly for the profits and/or gains of the LLC as part of their personal tax liability. The LLC is not liable for US federal income tax if it is owned by non-resident members who do not have any income source from inside the US.
- High degree of privacy and confidentiality: Wyoming has strict privacy laws. Information about members is not publicly reported. Company information and accounting records are also not available to the public.
- Fast and easy incorporation process: A Wyoming LLC can be incorporated in as little as 1 week. The incorporation process can be completed remotely.
- Only one member is required: who can be of any nationality. Corporate members are permitted.
- Capital requirements: No minimum
- No Account requirements: No requirement to file accounts and no audit requirements
- Reputation: The US is an economically and politically stable jurisdiction
- Fees: Low setup and maintenance fees
- Flexible structure: The LLC can be member managed or non-member managed.
- Limited liability protection: All members of the LLC get liability protection
Top Uses
- International trade
- Intellectual property
- Holding company
- Estate planning
- Asset protection
- Tax planning
- Asset confidentiality
- Real estate
Key Corporate Features
Requirements for Incorporation
The following documents are required for incorporation:
- Certified copy of passport.
- Proof of address (not older than three months).
- The Articles of Organization or Certificate of Organization, which needs to be filed with the Wyoming state and approved. The Articles of Organization include the name of the company, the details of the registered agent, the company address, the names of the managers (if any are appointed), and other important information pertaining to the LLC.
- It is recommended, but not mandatory, to include an LLC Operating Agreement at the time of 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.
Taxation
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:
- Members should not be residents or citizens of the US.
- The company should not engage in trade or business activities within the US.
- The company should not earn an income inside the US.
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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Corporate Details
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.
Required Capital
No minimum capital requirements.
Members
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.
Trading Restrictions
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.
Company Meetings
Member meetings are not mandatory and can be held anywhere, both inside and outside of Wyoming State.
Local Agent
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.
Company Secretary
A company secretary is not required.
Language of legislation and Corporate Documents
English.
Official Language
English.
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.
Exchange Controls
None.
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.
License Fee
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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