Wyoming vs Nevada LLC: Which State Actually Makes Sense for Your Business

Wyoming wins on price and simplicity when it comes to forming and operating a business. Unlike Wyoming, Nevada charges an annual fee to renew a business’s operating license. However, if you’re doing business in Nevada, then choosing Nevada makes financial sense. Otherwise, founders should look to Wyoming.

Nevada and Wyoming both give a “no state income tax” pitch to founders considering an LLC in their state. Nevada’s annual costs to operate an LLC are about three times those in Wyoming. Further, the tax breaks are moot if you don’t live in the state.

We’ve incorporated in both states and have found both clients and staff to be about the same in both locations. The major difference between Wyoming and Nevada is their prices, along with some minor operational differences. Here are some of those differences.

What Does It Cost to Form an LLC in Each State?

Wyoming does not have a minimum cost to form an LLC like some other states. The cost to file Wyoming Articles of Organization is $100. Processing time is a day or two.

There are three mandatory filings with the state of Nevada at the time of LLC formation.

Most people quoting Nevada LLCs stop at the $75 Articles of Organization. In reality, the initial formation cost for a Nevada LLC is $425. The $150 and $200 fees are mandatory and are charged by the State of Nevada at the time of formation of your LLC.

Annual Compliance Costs: This Is Where the Gap Really Shows Up

Costs associated with annual reporting provide another example of the opportunity cost associated with forming a Wyoming LLC versus a Nevada LLC.

The annual report for the Wyoming LLC is due on the first of the month of the anniversary of the filing of the Certificate of Organization. Most small LLCs in Wyoming with limited business assets pay an annual report fee of $60. The report fee for a Wyoming LLC with business assets in Wyoming exceeding $300,000 is $600.

The Nevada LLC must renew its State Business License and the List of Managers or Members during the anniversary month of its formation. The total fee for renewal is $350. The State of Nevada imposes a $175 penalty on the LLC for failure to timely file the List of Managers or Members and a $100 penalty for failure to timely file the State Business License.

The LLC is placed in “Default Status” by the state. If the Default Status is not cured within one year, the State of Nevada revokes the Charter of the LLC. The Wyoming LLC will be administratively dissolved if the annual report is not filed for more than approximately 60 days.

A comparison of the costs to form a basic LLC in Wyoming and Nevada, along with the costs of maintaining the entity for a five-year period, reveals savings of $1,425 for the founder of a business operating in a different jurisdiction with no business assets located in Wyoming.

Does Either State Actually Save You on Taxes?

Neither state collects state-level personal income taxes or corporate income taxes. Also, neither state collects a franchise tax, unlike Delaware. So, are the taxes that Wyoming and Nevada collect about the same?

Not exactly. Taxes are collected only if your LLC is actually doing business in that state and you, as the business owner, are a resident of that state. If you are running an online business and are a resident of Nigeria or Nepal, for example, and you are not doing business in Nevada or Wyoming, then you won’t pay state business taxes in those states.

You only pay state business taxes if you are a resident of that state and your business operates there. The same is true for online business owners. The state that issued your certificate of formation will not affect the taxes you owe as a non-resident business owner in the US.

We have had founders form their businesses in Nevada with the understanding that they would owe less in taxes, when in fact they wouldn’t owe any taxes either way because they did not have a business in Nevada. You shouldn’t form your business in Nevada or Wyoming unless there are sound reasons outside of tax savings.

Privacy: The One Place Nevada Wins

While Nevada requires the names and addresses of members/managers on its Initial and Annual Lists, making them public record, Wyoming requires no member/manager information on its Articles of Organization and offers no opportunity to include it on its annual reports.

Because of this, Nevada is actually less protective of member privacy than Wyoming.

Registered Agent Requirements

Both states have similar requirements for their registered agent. These requirements include having a physical street address and a local registered agent.

Prices for these services range from $50 to $125 and are the same whether you incorporate or form your business in Nevada or Wyoming.

Common Mistakes We See Founders Make

• Assuming the stated filing fee is the only filing fee. Many people are surprised to learn that the state of Nevada charges an additional $350 for first-year compliance filings, in addition to a $75 filing fee for the formation filing.
• Incorporating in Nevada to avoid paying state taxes when your business operates outside of the state. If your business derives no income from Nevada and you are not a resident of Nevada, then the state’s lack of an income tax does not benefit you.
• Missing the Nevada Annual List. The combined $175 penalty compounds against you, and default status negatively impacts your ability to manage your business bank accounts.
• Renewal of registered agents. This happens in both states. The lapse of a registered agent can result in administrative dissolution.
• Using reputation as the sole factor when selecting a state to incorporate your business. Both Wyoming and Nevada require your business to be registered as a foreign business entity in the state where it actually operates if that state differs from the state of incorporation.

Wyoming vs. Nevada LLC: Side-by-Side Summary

Which One Should You Actually Pick?

As a non-resident founding a business with no business activity in either state, our experience shows that Wyoming is the more favorable option in terms of cost and default privacy.

If you do business in Nevada (rent business premises, do business with Nevada residents, etc.), then Nevada’s business and debt collection laws may provide you with greater protection and may be more applicable to you.

If your LLC is merely a U.S. business entity to render services or do business (e.g., SaaS, invoicing, consulting) to residents outside the U.S., or to hold intellectual property, then the services provided by Nevada are of no value to you.

Ready to Form Your LLC?

When comparing costs and other factors, Wyoming is the better option for a non-resident forming an LLC. Contact us for help with your formation or other post-formation filings, and to determine which state is best for you.

FAQs for Wyoming vs. Nevada LLC