Which is better, a Wyoming LLC or a New Mexico LLC?
Our picks for best LLC services
Starting and managing an LLC involves several steps and documents, which are generally similar for new entrepreneurs entering the U.S. market, regardless of nationality or country of residence. However, state-specific differences are essential to consider.
A Limited Liability Company is designed to protect business owners by distinguishing between their business and personal property. Wyoming and New Mexico each have their processes and requirements for business owners registering LLCs.
Key considerations
- Costs: Starting and maintaining an LLC may be cheaper in one state compared to another.
- Taxes: Both states offer personal income tax benefits for U.S. LLCs owned by non-U.S. residents.
- Laws: Wyoming and New Mexico have experienced LLC oversight, providing a reliable legal environment.
- Investment: Some states provide better conditions for raising venture capital and private equity.
- Registration: Both states offer easy and low-cost LLC registration.
- Processes: Required documents can typically be submitted online or by mail.
Choosing the best state for your LLC
Beyond low fees and strong legal systems, consider:
- State income tax and local tax policies: These may affect your long-term financial plans.
- Court enforcement of personal asset protection: This can vary between states.
For new entrepreneurs, often on a budget, sales and personal income tax rates can be deciding factors. Compare the sales tax and personal income tax laws of Wyoming and New Mexico before making a decision.
Make a list of all the forms, filing fees, and other costs required for registration in each state. Do your reading on the comparison information below to help inform your choice. Also, make a list of your questions regarding each state and its process and charges. That will help you more easily evaluate both, weigh priorities, and select the location that is the best fit for your business goals and strategic plans.
Benefits for LLC owners in Wyoming and New Mexico
General benefits
- Access to the U.S. market
- Special tax treatment for pass-through entities
- Asset protection laws
Specific benefits in New Mexico
- Affordable LLC registration
- Anonymity for privacy and asset protection
- Stable political environment
- No annual reporting requirements
- Online formation process
- Faster processing due to lower registration volume
Specific benefits in Wyoming
- Simplest LLC formation and maintenance
- Experienced state staff
- Fewer documentation requirements
- Lower fees and no personal income tax
- Minimal reporting requirements
- No franchise tax
How to form an LLC in New Mexico or Wyoming
As you can see in the side-by-side lists of steps above, the LLC business structure setup processes in Wyoming and New Mexico are very similar. However, you should be aware of differences between these two states. For example, there are some varying documentation requirements, fee differences for domestic vs. foreign-owned LLCs in New Mexico, and other process departures.
New Mexico
- Choose an allowed business name. Pick a name from the approved options in the state’s database. You can reserve a name if you wish by filing a request to New Mexico Entity Name Reservation and paying a fee.
- Choose a registered agent. If you live in another country and want to start and run an LLC anywhere in America from outside the U.S., you will be required to designate a New Mexico registered agent to receive government mail and phone calls, and otherwise act on your behalf during regular business hours.
- File a Certificate of Formation with the Secretary of State. Submit your Certificate of Formation of your LLC to the New Mexico Secretary of State for registration. Include the required documentation and fee. (Approval takes from 1 to 3 weeks.)
- Apply for an EIN from the IRS. As a non-citizen and non-resident of the U.S.A., you can obtain an Employer Identification Number by applying for it through the Internal Revenue Service.
- Open your business bank account. This is the easiest step for domestic LLC owners. But, for foreign entrepreneurs, it can be more complicated. There are some U.S. banks with more experience than others in helping non-citizen, non-U.S. resident business owners open bank accounts. See the New Mexico LLC registration guidelines for a starter list of such banks. It contains both physical facilities throughout the country and popular online banks. You’ll be asked to show some of your business formation documents. Those may include your internal operating agreement for your business.
- Apply for any necessary local or state permits and/or business licenses. A New Mexico business license is mandatory for most kinds of businesses in the state. See the Step-By-Step LLC guidelines for New Mexico for more information.
- File a Beneficial Ownership Information report, if required. Starting in January 2024, most U.S. businesses that are owned by non-citizens residing outside the country must file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network. (These reports are confidential and not public records.)
- Apply for a New Mexico Business Taxpayer ID Number. Complete and submit the required form with the New Mexico Secretary of State to obtain a state taxpayer identification number for use in fulfilling your annual state business tax reporting requirements.
Wyoming
- Choose an allowed business name. Pick a name from the approved options in the state’s database. You can reserve a name if you wish by filing a request to Wyoming LLC Application for Reservation of Name and paying a fee.
- Choose a registered agent. If you live in another country and want to start and run an LLC anywhere in America from outside the U.S., you will be required to designate a Wyoming Registered Agent to receive government mail and phone calls, and otherwise act on your behalf during regular business hours.
- File a Certificate of Formation with the Secretary of State. Submit your Certificate of Formation of your LLC to the Wyoming Secretary of State for registration. Include the required documentation and fee. (Approval takes around 15 days.)
- Apply for an EIN from the IRS. As a non-citizen and non-resident of the U.S.A., you can obtain an Employer Identification Number by applying for it through the Internal Revenue Service.
- Open your business bank account. This is the easiest step for domestic LLC owners. But, for foreign entrepreneurs, it can be more complicated. There are some U.S. banks with more experience than others in helping non-citizen, non-U.S. resident business owners open bank accounts. See the Wyoming LLC registration guidelines for a starter list of such banks. It contains both physical facilities throughout the country and popular online banks. You’ll be asked to show some of your business formation documents. Those may include your internal operating agreement for your business.
- Apply for any necessary local or state permits and/or business licenses. A Wyoming business license is mandatory for most kinds of businesses in the state. See the Step-By-Step LLC guidelines for New Mexico for more information.
- File a Beneficial Ownership Information report, if required. Starting in January 2024, most U.S. businesses that are owned by non-citizens residing outside the country must file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network. (These reports are confidential and not public records.)
LLC costs
This is a general picture of the Limited Liability Company registration and maintenance fees and other charges in New Mexico and Wyoming. Consider these costs in your determination of which is the best state for you to start your LLC.
New Mexico
- Fee for filing Articles of Organization: $50
- Name reservation fee: $20
- Registration of a foreign LLC: $100
- Gross receipts tax rate: 5% to 9%
- Certificate of good standing: $25
- Minimum liability business insurance: (varies between carriers)
- New Mexico registered agent fee: (varies between independent agent services)
- State business income tax: 4.8% – 5.9%
- State individual income tax: 1.7% – 4.9%
- Annual franchise fee: $300
- Local permits and fees: may be required
Wyoming
- Filing Articles of Organization: $100
- Certificate of Authority: $150
- Series under a series LLC: $10 (per series)
- Reinstatement for tax: $100
- Reinstatement for no registered agent: $350
- Amendment/dissolution: $60
- Any additional type of filing: $60
- Annual report license tax: $60 or $0.0002 (per dollar, whichever is greater, based on Wyoming assets)
- State business income tax: $0
- State individual income tax: $0
- Annual registered agent fee: (varies between independent agent services)
- Local permits and fees: may be required
Keeping your LLC compliant
After you have completed registration of your new LLC startup in either New Mexico or Wyoming you’ll receive your certification document. You’ll then be obligated to maintain compliance with various state and possibly local laws regulating LLCs in your chosen state.
Compliance may include, for example, paying the annual Franchise Fee, personal income tax in New Mexico, and the registered agent annual fee in both states, etc.
FAQs
Is Wyoming or New Mexico better for starting my LLC?
Wyoming, New Mexico, Delaware, California, Nevada, and other states provide among the nation’s best business environments for LLC owners. That includes members of LLCs started by non-citizens living outside the United States. Both offer relatively low taxes and other cost savings as well as conducive government and legal advice and governing systems for businesses.
What are the most important differences between New Mexico and Wyoming LLCs?
Wyoming’s lower registration cost and New Mexico’s increased personal asset protection are two of the most significant similarities between these two different states for starting LLCs.
Why should I avoid starting an LLC in one of these two states?
New Mexico and Wyoming are among the most frequently chosen states in the country for LLC registration. These are known for friendly state systems and policies that are especially helpful to new small business owners. While you may find a state that only charges some of the fees Wyoming or New Mexico does, you may experience better overall business conditions for the LLC business structure in these states.
