Wyoming and Nevada compete for the same business and clients often ask us how our products differ from Nevada’s. Here we provide an analysis of fees, taxes, privacy, simplicity and court systems as they relate to LLCs and Corporations. Before we begin, we will tell you what we have told many clients, “We are not promoting Wyoming companies because we are in Wyoming, we are in Wyoming because of their companies”. You may also read this article from The Economist which calls Wyoming the Switzerland of the Rocky Mountains.
Everything You Want Need To Know
Delaware is a haven for large corporations. The prevalence of their incorporation industry has led many business owners to wonder whether they too should set up shop in Delaware. This article will analyze the salient differences between doing business in Wyoming and in DE. Unlike the debate between Wyoming and Nevada companies, where WY is the clear choice, DE is preferable in some instances.
For example, corporations looking to go public someday should form in DE. If that’s not you, though, should you still consider giving them your business? Our comparison will focus on fees, taxes, privacy, simplicity and the court systems.
Wyoming vs. Delaware Corporate Fees
Wyoming LLC: The Secretary of State charges $100 to incorporate and $50 in subsequent years. That’s it. Our registered agent service is an additional $25 per year.
Delaware LLC: $90 to begin and $300 every year thereafter. This is for the standard filing time of 1-3 days. Expedited options exist for a fee. Add your registered agent cost.
Wyoming Corporation: The same $100 to begin and $50 to file an annual report. There is an officer filing fee in the second, and every after year, of $x.
DE Corporation: $89 the first year. Every year after is $50 plus a minimum of $75 depending on share value. Yes, this applies to privately held companies too. Add a $350 if your corporate nexus is in Delaware. Learn more about establishing a corporate nexus here.
Random Filings: Wyoming charges $50 to amend your articles and nothing to change registered agents. Delaware charges $179 and $50 respectively. These are just a few examples.
Which is preferable? Wyoming has much lower all around fees, especially when it comes to changes or corrections. Large corporations, such as Wells Fargo, will find these amounts small enough to ignore. Can you say the same? Learn more about Wyoming Corporate Fees here.
Wyoming vs. Delaware Taxes
WY: Wyoming has no state taxes on corporate income.
DE: Companies operating outside of DE pay no income tax, those operating within pay 8.7%.
Both states are a tie except in very particular circumstances. We assume most clients will not be operating within Delaware and so the tax makes little practical difference.
WY LLC: Owners and managers are kept private.
DE LLC: Owners and managers are kept private.
WY Corporation: Nominee officers are allowed.
DE Corporation: Nominee officers are allowed.
Both states are functionally equivalent when it comes to corporate privacy. Learn more about Wyoming Corporation Privacy here.
WY: Everything can be handled online. We offer same day turn around for companies filed before noon and a twenty four hour guarantee regardless of when you file. Our state also allows Close LLCs and Close Corporations.
DE: Three weeks processing time. You must fax or mail your paperwork. Expedited service is available same day for $100 or $50 within twenty four hours.
Wyoming is again preferable to Delaware for the ease of forming a company. We also offer Close Corporations which have reduced administrative and reporting requirements.
WY: Business disputes go through the normal court system.
DE: There is a special Chancery Court designed for handling business disputes.
Which is preferable depends. If you have a dispute which you want handled quickly, and which is bound by a large amount of precedence, then Delaware is preferable. If you are being pursued by creditors, though, then having everything handled quickly is less beneficial.
Further, your creditor will find it much more difficult to obtain counsel in Wyoming and to pursue a judgement. Combine this with our charging order protection and our setup is preferable for asset protection. Again, it depends on what you want.
A majority of small to medium sized businesses will find Wyoming preferable to Delaware. This is primarily due to the lower fees and simplified formation process. Individuals and small groups will also prefer the simplicity of our Close Corporations.
Larger businesses, such as those looking to go public, won’t be bothered by these fees. They will find comfort in how the court system functions and won’t be as bothered by asset protection concerns.
These advantages make Wyoming the preeminent destination for incorporating.
Learn more about how we differ from
Nevada and Delaware by clicking the respective links. We also have articles on
establishing a corporate nexus, a non-profit, and a
sole-proprietorship. Also, learn about how
LLCs differ from corporations and