Limited Liability Company
Wyoming has always had a pro-business policy. They were the pioneers of the LLC in 1977, when they combined a partnership and a corporation to create a hybrid legal entity called a Limited Liability company – whereby the owners of the LLC would be limited in risk of losing (like a corporation) but benefitting from the pass-through federal taxation and flexibility of a partnership.
Thereby enabling businesses to flourish because owners could act without personal risk in the new business venture.
Wyoming LLCs are flexible structures, their owners can freely determine in the operating agreement, how the LLC will run. There are minimal company structure requirements for its management, nor are there provisions for company meetings, directors, secretary, or capital.
It may be formed by the only person and may be managed by its members or employees without an ownership stake.
Wyoming LLCs are private entities. Details of its members, managers or officers are not disclosed in a public registry.
In addition, Wyoming is the only state with specific laws protecting the interests of the members of Single-Member LLCs. Wyoming has spent the time to consider the rights and protections of their Limited Liability Company, and it is reflected by having the strongest legislative law in the nation.
The only state in the US which provides single member LLCs ownership charging order protection in Wyoming. A charging order is an order by the court directed to the LLC ordering it to send all distributions that would have gone to the owner/debtor to the judgment holder instead. This limitation can make it more difficult for a creditor to collect on their judgment because the creditor will not be able to force the debtor to sell his ownership interest in the company.
The incorporation procedure is simple, straightforward, and it can be done in as little as 1-2 days. Wyoming LLCs also benefits from the lowest incorporation and maintenance costs of the US.
Wyoming LLCs may elect to be treated as a C-Corp (subject to corporate tax) or be fiscal transparent entities. Profits of an LLC that elects to be a fiscally transparent entity, is considered to be transferred to its members and taxed at the personal level. Members pay personal income taxes on LLC profits proportionally to their share of participation in the LLC, whether distributed or not.
This means that a Wyoming LLC is not seen as a separate entity for taxation purposes, and therefore if its members are non-US tax residents they will only be required to pay taxes in the US on income sourced from the US.
Although, if their country of residence taxes foreign-source income, the members may be subject to pay taxes on all foreign profits in their home country of residence, if it is required by the legislation of that particular country.
If its members are tax residents in a no tax or territorial tax country and no income is sourced from the US, they may operate with a Wyoming LLC fully tax-exempt while benefitting from the reputation of a US incorporated entity.
It is important to note that certain countries do not recognize the pass-through status of an LLC, if the LLC is deemed to be tax resident in one of such countries, it may be subject to corporate income tax.
Wyoming LLCs are commonly used for asset protection, e-commerce, Amazon FBA, professional services, banking in the US and get access to merchant accounts, for startups and as a holding company.
Country code – US
Legal Basis – Common law
Legal framework – Wyoming Statutes – Wyoming Limited Liability Company Act (Wyoming Statutes – Title 17, Chapter 29)
Company form – Limited Liability Company (LLC)
Liability - The liability of members is limited to the extent of their capital contributions.
Capital – There is no need to register a minimum or maximum capital contribution and there is no restriction on capital contributions subsequent to formation.
More than one class of Membership interest is allowed, which allows flexible structuring.
Members – A Wyoming LLC may be set up by one or more members, who may be natural or legal persons, resident or non-resident, without limitations. The identity of the LLC registered members may not be publicly disclosed.
Manager – LLC members may act as managers, or alternatively, they may appoint a manager. Corporate managers are allowed. Details are not available to the public.
Registered Address – LLCs must appoint a registered agent with a physical address (no post office boxes) in Wyoming. The registered agent must be available during normal business hours to accept important legal and tax documents for the business.
General Meeting – There is no statutory requirement for any formal meetings of members.
Electronic Signature – Permitted.
Re-domiciliation – Foreign entities and other US companies may be continued in Wyoming.
Compliance – Accounting records must be kept and shall be sufficient to show and explain the company’s transactions. The books, records and minutes of the company may be kept in any place or country at the Manager's choice.
LLCs are fiscally transparent; profits and losses may be passed through its members and subject to Personal Income Tax. Alternatively, you may elect to have a Wyoming LLC taxed as a C Corporation with the IRS and subject to Federal Corporate Income Tax.
Wyoming LLCs may require a Federal tax identification number (EIN). Additionally, most banks require an EIN in order to open a business bank account.
Wyoming requires LLCs to file an annual report on or before the first day of the anniversary month of the LLC’s incorporation. The cost is $50 or $0.0002 per assets located and employed in Wyoming, whichever is greater.
Foreign-owned LLC that conducts no business in the US and has no US source income, deductions, or credits does not create US federal personal income tax liability and does not create a requirement to file US federal income tax returns.
Foreign members may be required to disclose reportable transactions between them and the entity, filing the IRS Form 5472.
- Members not disclosed
- Managers not disclosed
- Corporate members permitted
- Corporate manager permitted
- Local manager required
- Registered office or agent required
- Annual meeting required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum members
- - Minimum registered capital
- - Minimum paid up capital
- USD Capital currency
- 100% Foreign-ownership allowed
Tax residency – An LLC that is organized or established in Wyoming that elects to be treated as a C-Corp for tax purposes is tax resident in the United States. A Wyoming LLC that is treated as a disregarded entity or a partnership for US tax purposes is tax transparent and therefore.
Taxation – Delaware limited liability companies may elect to be taxed as a C-Corporation, S-Corporation (if US-owned), as a partnership, or as a disregarded entity.
C-Corps are subject to federal income tax and state income tax.
Alternatively, an LLC may elect to be treated as a disregarded entity or as a partnership.
This means that may not be subject to Federal Corp Income Tax, and profits and losses may be reported through its members’ tax return.
Therefore, if its owners are Non-US Residents (and not subject to Personal Income Tax) and the LLC does not operate and generate profit from the US, does not lease or own properties within the US and does not have US employees and no effectively connected income to a US trade or business, offshore income accrued by an LLC may not be taxed in the US.
Corporate Tax rate – LLCs treated as C-Corps are subject to federal income tax at a 21% rate.
Capital gains – Gains or losses derived from assets held for more than 12 months are treated as long-term capital gains or losses, gains and losses derived from assets held for 12 months or less are treated as short-term capital gains or losses.
Net gains are the excess of net long-term capital gain over net short-term capital loss. Capital losses may be used to offset capital gains. Excess of losses may be carried back three years and carried forward five years to offset capital gains.
Net gains are subject to tax at applicable federal income tax rates.
Dividends – Dividends received by a US company from a US or foreign corporation may be deductible. There are different tiers of possible deductions, ranging from a 50% deduction of the dividend received up to a 100% deduction.
Dividends payments between US companies that are members of the same Group may be exempted. Certain Corporations may be subject to Accumulated earning tax on undistributed profits if it is not justified that the accumulation is based on business needs. Certain Holding Companies that receive substantial passive income may be subject to Personal Holding Company Tax on undistributed profits at a 15% rate.
Interests – Interests are generally included in the taxable base.
Royalties – Royalties are generally included in the taxable base.
Foreign-source income – Companies are taxed on their worldwide income, including foreign-branch income when earned and foreign-source dividends received. Relief from double taxation may be available by tax treaties, tax credit or claiming a deduction for foreign tax paid.
A Foreign subsidiary owned by more than 50% by United States tax residents, is considered a controlled foreign company (CFC). Certain undistributed income (Subpart F income) or GILTI income retained in a CFC may be subject to taxation.
Passive income retained in a foreign investment company (75% or more of the income is passive or at least 50% of the assets held produce passive income) may be also subject to taxation.
Withholding taxes – Dividends, interests, and royalties paid to non-residents are usually subject to withholding tax at a 30% tax rate. Withholding tax may be reduced or exempted under a tax treaty.
Losses – Losses arising from taxable income may be carried forward for 20 years and carryback for 2 years.
Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. To determine costs are allowed First in first out (FIFO) and Last in first out (LIFO) methods.
Anti-avoidance rules – Transactions between related parties must be carried out on arm’s length terms. If a company is not in compliance, the IRS may raise taxable income and tax payable.
Thin capitalization rules apply to disallow interest payments related to excess debt and make these payments as dividends.
A Foreign subsidiary owned by more than 50% by United States tax residents, is considered a controlled foreign company (CFC). Certain undistributed income (Subpart F income, GILTI) retained in a CFC may be subject to taxation.
Passive income retained in a foreign investment company (75% or more of the income is passive or at least 50% of the assets held produce passive income) may be also subject to taxation.
Labor taxes – Employers may be subject to social security contributions tax of 6.20% on the first USD 127,200 of wages paid to employees and 1.45% of Medicare tax on any wages, regardless of amount.
In addition, employers must pay, under certain conditions, federal unemployment insurance tax (FUTA) of 6.2% on the first USD 7,000 of wages paid to employees meeting certain criteria.
Tax credits and incentives – A tax credit or deduction is usually available for foreign tax paid.
Business and employment credits are also available business to provide special incentives for the achievement of certain economic objectives.
Credits may be also available for qualified research expenditures (QREs) to develop new or improved products, manufacturing processes, or software in the United States.
Qualifying private activity bonds interests may be exempt from federal income tax.
Compliance – On average, a company in United States may require 11 payments and 175 hours per year to prepare, file and pay corporate income tax, value added tax, and labor taxes, including payroll taxes and social contributions.
Personal income tax – An individual is deemed to be tax resident in the United States, if he or she is a citizen or permanent resident or he or she is physically present in the US during 31 days in a year and a total of 183 equivalent days during the current year and prior two years.
US citizens and permanent residents are tax residents, no matter the days spent in the country during a year.
Tax residents are subject to tax on their worldwide income.
The federal tax rate is progressive at rates ranging from 0% to 39.6%.
Self-employed individuals may be subject to self-employment tax at 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
Capital gains derived from assets held more than 12 months are subject to a maximum tax rate of 20%. Gains derived from assets held 12 months or less are subject to tax at standard rates.
Dividends, interests, royalties and rental income are subject to individual income tax at applicable rates.
In addition, individuals may be subject to net investment income tax (also known as Medicare contribution tax) on investment income received by individuals with modified adjusted gross income above certain amounts.
Other taxes – There are no value-added tax or sales tax in Delaware.
Real property ownership and transfer of assets are subject to local taxes in Wyoming.
Estate inheritances are taxed in the U.S.
There are no wealth taxes in the United States.
- Tax transparent entity
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- - Offshore Income Tax Rate
- - Corporate Tax Rate
- 38% Capital Gains Tax Rate
- 11.4% Dividends Received
- 30% Dividends Withholding Tax Rate
- 30% Interests Withholding Tax Rate
- 30% Royalties Withholding Tax Rate
- 3 Losses carryback (years)
- 5 Losses carryforward (years)
- 7.65% Social Security Employee
- 15.3% Social Security Employer
- 46% Personal Income Tax Rate
- 4% VAT Rate
- 84 Tax Treaties
The United States of America (USA) is a North American country constituted in a federal constitutional republic composed of 50 states and a federal district.
It is located between the Pacific and Atlantic Oceans, borders Canada to the north and Mexico to the south. The state of Alaska is in the northwest of the continent, bordering Canada to the east and separated from Russia to the west by the Bering Strait. The state of Hawaii is a Polynesian archipelago in the middle of the Pacific Ocean, and it is the only American state that is not located in the American continent. The country also has several territories in the Caribbean Sea and in the Pacific.
With 9.83 million sq. km, and with more than 324 million inhabitants, the country is the fourth largest in total area, and the third in population.
The capital is Washington D.C. New York is the trade and financial center, and the most populated city, with over 8 million inhabitants, and 22 million within its metropolitan area. Other large urban areas include Los Angeles, Chicago, Dallas, Houston, Philadelphia, Miami, and Atlanta, among others. English is the official language of all states and territories, although some of them have their own co-official language.
As it is one of the world’s most ethnically diverse and multicultural nations, there are more than 20 languages with an important number of speakers, such as Spanish, Chinese, French, German, Tagalog, Vietnamese and Italian, among others.
The United States is a constitutional, democratic and representative republic. In the US federalist system, citizens are generally subject to three levels of government: federal, state, and local; The duties of local government are commonly divided between the county and municipal governments. In almost all cases, executive and legislative officials are elected by direct suffrage of the citizens of the district.
Its official currency is the US Dollar (USD), which is the most traded currency, the world’s primary reserve currency and the currency used in the international markets for commodities such as gold and petroleum.
The USA is the largest economy worldwide in nominal terms and the second, after China, in purchasing power parity terms, home of the largest multinationals and well-known brands worldwide and leader in technological innovation and scientific research.
It has a mixed capitalist economy, characterized by abundant natural resources, like coal, natural gas, oil and uranium, developed infrastructure and high productivity.
Its economy is mostly based on the services sector, but it maintains large and competitive industrial sector, specialized in high technology, where the chemical, military, energy, oil, metallurgical, steelworks, automotive, aeronautics, electronics and IT are the largest.
It is the third largest oil producer in the world, as well as the largest importer. It is also the first world producer of electric power and nuclear power, as well as liquefied natural gas, sulfur, phosphates and salt. Despite primary sector accounts about 1% of its GDP, the country is one of the world’s largest producers of a wide variety of agricultural, livestock and fishing products.
Regarding the services sector, the largest of the USA economy, its most important activities are banking, insurance, education, healthcare, research, transport, trade, and tourism.
The US financial market is the most extensive and the most complex worldwide and stands out for its influence in any economic decision at an international level. New York is the most important financial center worldwide, the New York Stock Exchange (NYSE) is also the largest world’s capital market and the NASDAQ is the third one. The USA is also the second most touristic country worldwide, ranking 2nd, after France and ahead of Spain.
Wyoming is located in the western region of the country. It limits to the north with Montana, to the east with South Dakota and Nebraska, to the south with Colorado, to the southeast with Utah, to the west with Idaho and to the northwest with Montana. With 586,107 inhabitants, is the least populated state and with 253 336 sq. km, the tenth largest. Its capital and the most populated city is Cheyenne with about 65,000 inhabitants.
Two-thirds of the western territory is mostly covered by the Rocky Mountains, while the rest east of the state is prairies of great heights above sea level known as High Plains. Almost half the land of Wyoming is owned by the US government, making Wyoming the sixth largest state in the hands of the federal government.
These federal lands include two national parks - Grand Teton and Yellowstone - two national recreational areas, two national monuments, as well as several national forests, historical sites, fishing areas and protected wildlife areas.
The mineral extraction industry, especially coal, oil, natural gas and high-chair-along with tourism are the main drivers of Wyoming's economy.
Traditionally, agriculture had been an important component in its economy. Its current importance in the state economy has faded. However, agriculture remains an essential part of their culture and lifestyle.
Tax treaties Map
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