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  • Writer's pictureJean Franco Fernández Clark

Wyoming LLC - A tax-free Offshore Company for service providers, online businesses, entrepreneurs, start-ups, and digital nomads


Digital Nomad

A Wyoming LLC is one of the most preferred options for the business person who is engaged in providing any type of professional services or engaged in general trading, sales, or market as a Wyoming LLC, if correctly set up, is a tax-free offshore company, with very low setup cost and low yearly maintenance, providing a high level of privacy, has no economic substance requirement, allows the owner to easily open US bank accounts for the LLC, or bank accounts in other jurisdiction, accept payments via debit or credit card, and much more, and global and fast payments.


I often receive clients looking to form an offshore company and ask for my advice on where to form it and their preconceived idea is that the best place is a jurisdiction like the British Virgin Islands, the Cayman Islands, Belize, Singapore, etc., and while these options are good options depending on your specific needs, they come to a surprise when I suggest them to form their offshore company in the United States of America, specifically in the State of Wyoming.

0% tax


Wyoming LLCs owned by a foreign owner (who is not a tax resident in the USA) are tax-exempt, hence foreign owners do not pay taxes on their LLC income. 


LLCs are what is called “Pass-Through Entity”, meaning the LLC itself does not submit an income tax return, and they have the tax status of the Owner, then the LLC income is passed to the Owner. So for example, if the LLC is owned by a non-resident, the LLC will be considered a non-tax resident.


Another way to put it, the USA (IRS) will treat the Wyoming LLC the same way it would treat a company formed in the Cayman Islands. It will only tax it if it is US Sourced, and the fact that the income is received by a US Company does not mean it is US Sourced. 


To learn more about Wyoming LLC 0% taxation, click here:


To learn more about what is US Sourced Income, click here: 


Low formation Pricing


Forming a Wyoming LLC, inclusive of Formation Fees, EIN (tax number), Operating Agreement, State Filling Fee, Registered agent and address (for a year), filling out the Beneficial Ownership Information report to FinCEN, and assistance in opening a US bank account, is just US$675 (using Offshore Affairs’ services), making Wyoming the cheapest jurisdiction to open an offshore company in.


In contrast, options like Belize, Seychelles, Panama, can cost between US$1,000 to US$1,500, without including the bank account opening which is an extra US$750 professional fee (charged by the lawyer opening the account), and options like the BVI cost about US$2,300, the Cayman Islands about US$6,000, Singapore -/+ US$3,5000, etc.


The Wyoming LLC renewal (yearly maintenance) price, which is paid the next year after you form the company, is just US$477, including State Report and State Annual Fee, Registered Agent and Address, IRS Federal tax compliance. Basically, everything that is needed to have your LLC in legal order.


Low yearly maintenance 


A Wyoming LLC owned by a foreigner is not required to submit tax returns. It must submit an “Information Return” where it only reports the transactions between the LLC and the Owner. It also has to maintain a registered agent and registered address in Wyoming which can go as low as US$25 per year, and pay a State Annual fee of US$60.


Prestige


When you trade through a Wyoming LLC, you are trading through a prestigious jurisdiction, which will not trigger a red flag in the banking or tax system of your clients.


The USA as a tax and banking jurisdiction (Financial Centre) is not a black nor gray labeled jurisdiction.


Banking


When we open a Wyoming LLC, we have several FinTech banking options that allow:

  • No minimum initial deposit.

  • Remote bank account opening.

  • Debit card.

  • No monthly maintenance fees.

  • Instant transfer arrival.

  • No professional fees charged by your service provider for assistance in opening the account.


For your clients and for you it would be easier, quicker, and less expensive to receive a transfer to your LLC US account or to your Woming LLC US, or the bank account in Europe / Asia. For example, if you have a client in Europe, this client could send you the payment via Instant SEPA to your bank account in Euros, with no transfer fees and it should arrive immediately, instead of sending it to a bank account in the Caribbean charging you high wire transfer and arriving in at least 3 business days.


When opening an account in these US FinTech banks, included in our formation fee, we provide assistance and guides for you to be able to open the account without issues.


Banking Privacy

Banks in the USA are not part of the CRS, hence your account ownership would not be reported under this legal instrument.


Comparison with Opening a Bank Account in a traditional tax haven.

If you open a company in a more traditional tax haven, let’s say the BVI, your banking options will require you to make a minimum initial deposit starting at US$1,000 to US$25,000 - depending of course on the bank and jurisdiction you pick - plus the fees charged by the professional to open the account and the fee charged by the bank to open the account, which ranges from US$500 to even US$2,000, plus monthly maintenance fee, and their opening timeframe can be at least a month.


Access to Payment Gateways.


The owner of a Wyoming LLC can use payment gateways to process debit or credit card payments using Stripe, even if the owner is a non-resident foreigner.


You can check how to open a Stripe account here: 


No economic Substance Requirement - No Office Space nor Employees needed.


Wyoming LLCs are not required to have an economic substance (employees, office space in Wyoming, yearly expenditures, etc.) to fully operate. 


In other jurisdictions, like the BVI, Cayman Islands, Belize, Cyprus, Jersey, Isle of Man etc., even if the company is not subject to an economic substance either because it did not engage in a “revelant activity” or because it is not a tax resident in its country of formation, it still has to submit an Economic Substance Requirement Assessment to the relevant authority, and this brings extra expenses / fees.


Privacy


Wyoming LLCs are very private, and on public records you won’t find information on who owns the company, as ownership is not even reported to the Secretary of State. 


The only governmental entity that knows about your ownership of the Company is the FinCEN as we have to report your ownership to this entity.


Of course, banks will know the owner’s information as no bank will open a bank account without performing a KYC/AML procedure. Banks do not open accounts to companies with bearer shares.


When not to use Wyoming as an offshore company


I would not suggest to use Wyoming as an offshore company when:


1- The company will have multiple owners (2 or more owners)

2- It will engage in crypto-related businesses and will need a bank account. Accepting payments in Crypto is not crypto-related business. 


 

Disclaimer: The information provided herein is for informational purposes only and should not be construed as, relied upon as, or be a substitute for financial, tax, and/or legal advice. It is recommended to seek the guidance of a licensed attorney and/or advisor for personalized advice tailored to your specific situation. Information may be incomplete, incorrect, and/or not updated. 


About the author:

Jean Franco Fernández Clark, Corporate & International Tax Lawyer. Speaks English, Spanish, French, Italian, Russian, Chinese Mandarin. Founder of Offshore Affairs.




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