So you're ready to start your own company...but you don't know where to begin.
In this post, I'm going to tell you why forming a Wyoming LLC is my personal choice for starting a company as a solopreneur.
Choosing which state to incorporate in isn't as complex or need as much consideration as you may think - you just need to know some facts on taxes, legal fees, and understand your own business. First of all - I highly suggest choosing an LLC over a Sole Proprietorship or a Corporation due to it's limited liability (i.e. if your business owes debts it cannot creep into your personal finances) and the limited paperwork and fees. If you plan on creating a startup that will have numerous full-time employees, search for private equity funding, and possibly get bought-out/go public - I'd look into an S-Corp or using a service like Stripe Atlas to get your startup setup.
Now some initial questions you may want to ask yourself before thinking about filing for a company outside of your home state are...
Do you have a physical office you work out of?
Do you have a physical store you sell your products/services from?
Is most/all of your business conducted in one particular state?
As long as you're offering your services on a virtual level with no physical anchors - then it's a great idea to incorporate out-of-state. And if you're like myself and plan on doing business beyond borders (domestic & international), then there are really only 3 choices you have...
One of the most business-friendly states in the country
No out-of-state income
Low initial filing fees and franchise taxes
Chancery Court (business-specific court with smart judges and quick actions)
Doesn't require annual meetings or operating agreements
Allows owners to remain anonymous in public filings
Don't have to file an income tax return (seriously!? yes, seriously.)
Annual renewal fees of $325
ZERO business income or franchise taxes
“Lifetime proxy” - allows owner to be anonymous and vote through another person
Online portal for annual renewal
Annual renewal fee of only $52
*Non-US citizens. You can easily apply for all 3 LLC's. Each one will have a 'foreign entity fee'. Click here for an updated list of these fees.
The first state to adopt and legalize the LLC happens to be Wyoming. And there is a pride within the state for being the first to the task. While it may not be as enticing as Delaware for mighty big corporations, or Nevada for the flashing lights of the gambling world - Wyoming is known - to those who have found it - as a hidden gem for small business entities.
Zero business income tax, an easy online application renewal, a minimal yearly renewal fee, and a plethora of registered agents to choose from, make forming an LLC in Wyoming an easy choice for digital nomads.
Before you try to form a Wyoming LLC, it's important to get a well-qualified registered agent. You have to get a registered agent in any state you incorporate in where you're not present. They are responsible for any legal processing on behalf of your corporation (summons, complaints, etc.). A great registered agent will be prompt with forwarding you any mail your business receives, and possibly even updating you with email and/or having an online portal for you to view important notices.
It's no secret how many people are trying to form an LLC in Wyoming, so you'll find tons of Wyoming registered agents with a quick Google search. Over the past 5 years, I've used WyomingRegisteredAgent.com for my Wyoming LLC formation and have been very happen with their service. Wyoming Registered Agent is located just down the road from the Secretary of State's office in downtown Cheyenne. They cost $99/year and include up to 20 pieces of first-class mail and email processing.
Some of the other Wyoming registered agents I've come across but don't have personal experience with include...
Buffalo Registered Agents ($49/year)
Northwest Registered Agents ($125/year)
When it comes to actually forming your LLC in Wyoming you have 2 choices...
Do it by yourself directly through the Secretary of State's website (cost $102)
Do it through your Wyoming registered agent ($150 - $300 including 1st year of RA)
I believe I did it myself; however, for the few extra bucks - I suggest to go through your Wyoming registered agent as your going to need them anyway. They will handle all the paperwork and tell you which forms you have to complete to get your Wyoming LLC formation complete. Also, if you're looking to be listed anonymously as the business owner, it's very important you have the Wyoming registered agent do it so your name isn't listed in the creation of the company.
Once your Wyoming LLC is complete, you'll want to apply for an EIN number. Your EIN is basically your company's unique social security number. To do this, you'll have to go the IRS website and fill out an online application. The processing time can take anywhere from 4 - 8 weeks.
After you get your EIN, you'll be all set up to open bank accounts with your new business, start accepting payments from payment processors, and most importantly...tax write-offs! YEWWW!
And if you're making over $100,000 and really looking for a tax-haven - check out this process for avoiding even more taxes.