How to Start an LLC as a Non -U.S. Resident in Wyoming

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by How to Start an LLC Team
Last updated: June 22nd, 2024

Starting a Limited Liability Company (LLC) in the United States is a strategic move for many non-U.S. residents and non-citizens. Here’s a step-by-step guide to get your Wyoming business up and running.

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A non-resident citizen is someone who doesn’t have a substanial presence in the U.S., which presents challenges if you’re trying to set up an LLC. A non U.S. citizen, meaning a person who does not have citizenship in the U.S., faces similar challenges.

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1
Choose a name for your LLC

Your business name will have to adhere to all Wyoming state naming rules, including being unique from other business names, accurate to the type of business, and excluding forbidden words. It will likely need to include some variation of “LLC” or “Limited Liability Company” as well.

Conduct a name search via the Wyoming Secretary of State to ensure your desired LLC name adheres to Wyoming’s naming rules and isn’t already taken by another entity.

2
Appoint a Wyoming registered agent

Wyoming mandates that all LLCs, including foreign-owned LLCs, have a registered agent—a person or entity in Wyoming who can receive legal documents and service of process on behalf of your LLC.

For foreign-owned LLCs, the registered agent acts as a point of contact in the state. Since most LLC owners living abroad do not have a physical address in the state, many utilize a registered agent service.

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3
File the Articles of Organization

The main formation document in Wisconsin is the Articles of Organization. This is filed through the Wyoming Secretary of State and costs $100 by mail and $102 online.

Articles of Organization in Wyoming will need to include your LLC name and registered agent information. It is optional to include business purpose, duration of the LLC, and whether it is member-managed or manager-managed.

4
Draft an operating agreement

Though optional, an operating agreement is important for LLC owners living outside the U.S. This internal document outlines the LLC’s structure, including ownership stakes, profit distribution, and managerial hierarchy.

If you have managers in Wyoming, it provides a clear designation of operations, which provides structure and clarity if owners are oversees.

Consider requesting help from a qualified lawyer to ensure your business is protected.

5
Obtain necessary business licenses and permits

While Wyoming does not require a universal business license, your LLC might need specific local or state-level permits depending on your business type and location. Check with local city or county governments and review the Wyoming Secretary of State’s office resources for more information.

6
File for an Employer Identification Number (EIN)

LLC owners should secure this free Federal tax ID from the IRS. It is necessary for opening business bank accounts, employing staff, and conducting federal tax transactions. Apply online for free at IRS EIN Online.

Important note for non-resident aliens and non-U.S. citizens

  • Social Security number holders: If you have a U.S. Social Security number, use it to apply for an EIN.
  • Individuals without a Social Security Number (SSN): Apply for an Individual Taxpayer Identification Number (ITIN) via the IRS to then obtain an EIN. For more information on ITINs, visit IRS ITIN Info.
  • Green card holders: Use your green card number for EIN application purposes.

7
Open a U.S. business bank account

Opening a business bank account simplifies revenue management, enables easy access to US-based financial services, and enhances your company’s credibility in the market.

Opening a U.S. business bank account can be slightly more complex, but it is critical for managing your company’s finances effectively.

Be sure any bank you choose will offer services to foreign owners—many major banks have specific requirements and offerings for international clients. You will likely need to provide extensive documentation, including your LLC’s formation documents, EIN (Employer Identification Number), and personal identification.

Some banks may require a visit to the U.S. to open the account in person, though others might have remote options available like RelayFi, Found, and Mercury.

What state tax obligations does a foreign LLC need to meet?

For non-U.S. residents operating an LLC in Wyoming, understanding the state tax obligations is crucial. Wyoming is known for its favorable tax environment, but it’s best to hire a professional tax accountant to help navigate the forms and fees. Specific tax requirements include:

  • No state income tax: Wyoming does not impose a state income tax on individuals or corporations. This means that LLCs in Wyoming do not pay state tax on income. This absence of state personal income tax return is one of the primary reasons Wyoming is attractive to both residents and owners outside the US. Remember that you will still have to pay federal income taxes.
  • Sales and use tax: While Wyoming does not have income tax, it does impose a sales tax. If your LLC sells goods or provides taxable services in Wyoming, you must collect sales tax from your customers. As of 2021, the state sales tax rate is 4%, with localities able to add additional taxes. Foreign LLC owners will need to register with the Wyoming Department of Revenue to handle these taxes appropriately and consider the costs of their own purchases.
  • Franchise tax: Wyoming does not impose a franchise tax on LLCs, which is another favorable aspect of choosing Wyoming for LLC formation. This eliminates a common cost found in other states, making it easier and more profitable to operate an LLC.
  • Annual report and license tax: Wyoming requires LLCs to file an annual report with a minimum license tax of $50 or $0.0002 per dollar of assets located in Wyoming, whichever is greater. This annual report keeps your LLC in good standing and is mandatory regardless of the LLC’s activity level or profitability.
  • Employer taxes: If your LLC employs people in Wyoming, you will need to register for Unemployment Insurance Tax through the Wyoming Department of Workforce Services and comply with the state’s workers’ compensation insurance requirements. This tax filing support the state’s unemployment fund and workers’ compensation program.

What’s the cost difference between foreign LLCs and domestic LLCs? 

The cost of starting and maintaining an LLC in Wyoming is largely the same whether you are or aren’t a US-based company. Here are some key points to consider:

  • Registered agent fees: Both non-residents and residents need to appoint a registered agent in Wyoming. However, non-residents may opt for more comprehensive services from their registered agent, such as additional legal and compliance support, which can increase the cost compared to what a resident might pay for basic registered agent services.
  • Professional services: Foreign owner often incur higher expenses for professional services like legal and accounting support. These services are essential for international owners to navigate the US. legal system and tax obligations effectively, which might not be as complex for residents who are more familiar with local regulations.
  • Business licenses and permits: The costs for business licenses and permits are generally the same for both non-residents and residents. However, foreign owners might need specific licenses related to international trade or services that are not typically required for resident-owned businesses, depending on the nature of the business.
  • Travel and communication: While not a direct filing or operational cost, non-residents may face higher expenses related to travel and communication with their Wyoming-based business, especially if they are managing the business from abroad. This includes costs for international travel, long-distance communications, and potentially hiring local managers or coordinators.

Why is Wyoming a good choice to start a non-resident LLC?

Wyoming is known to be an exceptional state for establishing an LLC, especially for non-U.S. residents. Its favorable business climate, low tax rates, and supportive legal environment offer distinct advantages that can be crucial for the success and growth of a business.

Below are some of the key reasons why Wyoming is often the preferred choice for foreign entrepreneurs:

  • No state income tax: Wyoming does not impose any state income taxes on individuals or corporations, making it an economically attractive location for business owners looking to maximize their profitability. This absence of state income tax can mean significant savings, especially when compared to other states that might have higher tax rates.
  • Privacy protection: Wyoming offers strong privacy protections for LLC owners. The state does not require LLCs to list their members or managers on public records. This anonymity can be particularly appealing to non-residents who prefer to keep their business affiliations discreet.
  • Low startup and maintenance costs: The costs associated with starting and maintaining an LLC in Wyoming are relatively low. This includes lower filing fees for the initial setup and annual report fees compared to many other states. Such cost efficiency is beneficial for small businesses and startups that are mindful of expenses.
  • Asset protection: Wyoming provides robust asset protection features for LLCs. It allows the use of single-member LLCs while still offering the same level of liability protection as multi-member LLCs, which is not the case in some other states.
  • Business-friendly legislation: Wyoming is known for its business-friendly legislation. The state continually updates its laws to support the growth and operation of small businesses, making it a conducive environment for both domestic and international companies. This proactive approach to maintaining a supportive legal framework encourages business activities and growth.
  • Established legal precedent: Wyoming was the first state to legislate the LLC business structure in 1977, providing a long history of legal precedents that can offer more predictable outcomes for business disputes and clarifications in business law. This established body of law can be a significant advantage when legal issues arise.

Why do non-residents start LLCs in the U.S.?

Non-U.S. residents choose to start LLCs in the United States for a variety of strategic and financial reasons. The U.S. offers a stable legal environment and access to a large and diverse market, which can be particularly advantageous for international business activities.

Here are some of the key reasons why foreign owners often opt to form an LLC in the U.S.

  • Access to the U.S. market: Establishing an LLC provides a gateway to one of the world’s largest consumer markets. It allows owners to operate within the U.S., take advantage of its economic policies, and reach American customers more effectively.
  • Asset protection: U.S. LLCs offer limited liability protection, meaning personal assets of the members are typically protected from business liabilities and claims. This is particularly appealing for owners living abroad looking to protect their investments.
  • Tax benefits: The U.S. tax structure can be favorable for foreign investors, especially with an LLC’s pass-through designation for tax purposes. This means profits are taxed only once at the individual member level, potentially reducing overall tax liability depending on the member’s home country’s tax treaty with the U.S.
  • Increased credibility: Doing business as a US-based LLC can enhance a business’s credibility to customers, suppliers, and investors. It often increases trust among stakeholders who recognize the U.S. legal system’s clarity and enforcement.
  • Ease of banking and financing: Opening a business bank account in the U.S. is generally straightforward for LLCs, facilitating better management of U.S. operations. Additionally, having a US-based business can make it easier to access U.S. financing options.

FAQs

Does a foreign LLC need a business license in Wyoming?

While there is no general business license required for Wyoming LLCs, it is likely an LLC will need some form of license or permit. These can be occupational licenses based on industry and profession, or local licenses and permits.

Is it complicated to set up a non-U.S. resident LLC in Wyoming?

Setting up an LLC in Wyoming as a non-U.S. resident is relatively straightforward. The state’s business-friendly policies simplify the process, though owners living outside the U.S. may need to take extra steps to do things like open a business bank account and secure a registered agent with a physical mailing address in Wyoming.

What other states are ideal to set up a foreign LLC?

Other than Wyoming, Delaware, Nevada, and Florida are popular states for non-U.S. residents to set up an LLC. These states offer benefits like low filing fees, minimal reporting requirements, and in the case of Delaware, a well-established legal system that is favorable to businesses.

What’s the main reason to open an LLC in Wyoming if you’re not a U.S. resident?

The main reason to open an LLC in Wyoming for non-U.S. residents is the favorable tax structure, which includes no state income tax, combined with strong privacy protections and low business costs. These factors make Wyoming an attractive option for protecting assets and improving profitability.

What forms are filed to establish a non-U.S. resident LLC?

To establish a non-U.S. resident LLC in Wyoming, the primary form needed is the Articles of Organization. Additionally, appointing a registered agent and possibly registering for a federal Employer Identification Number (EIN) are necessary steps. Depending on the business type, specific licenses or permits may also be required.

Is a BOI report filed by foreign LLCs?

Yes. All business entities, including those started by a non-U.S. resident, must file a Beneficial Ownership Report, which provides a list of LLC owners to the Financial Crimes Enforcement Network, or FinCEN.

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