Location can make or break businesses. This is one of the major factors business owners must consider when starting their companies. Choosing the right location for a business can mean the difference between having complicated business laws, regulations, and heavy tax burdens and fees.
Admittedly, these factors are unavoidable when starting a business. But there are ways for startups to turn these risks into advantages. For example, they can look for states with lower tax rates so that they can have more capital investment.
Delaware and Nevada have relatively low tax rates compared to other states, making them extremely popular among startups. But aside from these two states, Wyoming is another pro-business state worthy of your attention.
If you want to start a corporation but need help figuring out which state to choose, you’ve come to the right place. This post will explore why it’s best to register your business in Wyoming.
Ten Benefits of Registering A Business in Wyoming
There’s a reason why Wyoming is considered one of the best states to start a business in. The equality state has created the perfect environment for growing startups by providing excellent tax breaks and more.
Here are ten reasons why you should register your business in Wyoming.
Progressive Tax Structure
Wyoming’s lack of taxes is one of the main reasons behind the state’s popularity. Corporations registered in the state don’t have to pay the following tax types:
Personal income tax
Corporate income tax
Wyoming also has some of the country’s lowest local sales tax rates of 5.34%. Additionally, the state has several tax exemptions as part of its business incentive program. These include manufacturing sales tax and electricity consumption exemptions.
Both of these tax breaks help encourage manufacturers to invest in modern equipment.
Strong Asset Protection
Like Nevada, Wyoming has some of the strongest asset protection laws in the country. Not only does the state have limited liability protection, but it also has robust charging order protections.
Suppose one of your business partners gets in trouble for a loan they can’t pay off. In that case, creditors can’t force you to sell your startup’s assets as payment for your partner’s loan.
And because Wyoming has limited liability protections, anyone who decides to sue your company can’t hold you liable for any debts your startup has made.
The state provides enough protection against common business risks, further encouraging entrepreneurship.
High Privacy Protections
If anonymity and privacy matter to you and your shareholders, Wyoming is the perfect choice for your startup. Unlike other states, Wyoming offers you unparalleled security.
Their reporting and disclosure requirements are minimal. The state is lenient regarding the information you’re willing to share. You don’t have to share your name and other sensitive information on public records if you’re an LLC owner.
Additionally, Wyoming does not require you to list the names of your members or managers. The state’s privacy regulations protect you from anyone who would want to sue you on behalf of your company.
No Stock Issuance Limits
Depending on where you registered your business, there’s a limit to the number of shares or stocks you can have. Fortunately, businesses registered in Wyoming can issue unlimited stock and classify them however they want.
The state allows flexible classifying of shares. This regulation means you can classify your stocks as common, preferred, or hybrid. You can also release no par value shares and be able to change them later on. Lastly, Wyoming permits you to issue shares in exchange for other valuable assets like properties and equipment.
Lower Startup Costs
If you plan on creating your startup with little capital, you don’t need to worry about expensive filing fees. The cost of incorporating a company in Wyoming is lower compared to other states.
The state’s rates start at $100. And since Wyoming doesn’t ask you to have a business license to operate, your overall startup costs will be more affordable. You can use the money you’ve saved and invest it in your capital.
Affordable Annual Fees
Wyoming’s annual filing fees are proportional to how many assets your startup has. For example, if your corporation’s assets are around $300,000 or less, you’ll be charged $60. But if it’s worth more than $300,000, your total value will be multiplied by 0.0002.
Suppose that your company’s assets are around $600,000. In that case, you’ll have to pay an estimated $120 annual fee.
Easy Transfer of Ownership
Another reason Wyoming is the perfect home for corporations is its regulations for transferring ownership. Since corporations are separate legal entities from their owners, ownership can easily be passed through the sale of their stocks.
You no longer have to worry about the transfer affecting your operations since it doesn’t require a lot of paperwork.
No Minimum Capital
Some states require businesses to have a certain amount of capital to incorporate. Before starting operations, you must deposit a certain amount of money with a notary or bank post-incorporation. This rule can be extremely limiting, especially for those with limited resources.
Luckily, Wyoming’s legal code does not have a minimum capital requirement. This means that you can start your corporation regardless of your initial capital. You could have as little as $1 on your capital, and the state will still allow you to form your startup.
No Residency Restrictions
Wyoming opens its doors to anyone wanting to start a business within the state, even if they’re not residents. According to the IRS, any non-resident can run a company in the US and generate revenue. Anyone living outside the state or the country can form a startup in Wyoming.
Suppose you already have an LLC or corporation registered in another state. In that case, you can quickly move your existing startup to Wyoming. The state is among the select locations in the US that allow you to move any business entity, including:
Even if you move your startup from North Carolina to Wyoming, you can use the same tax ID and retain your original formation date. You no longer have to worry about additional costs and complicated paperwork when you move to Wyoming.
Start Your Business in Wyoming Today
With a progressive tax system and incentive programs, Wyoming has created an environment perfect for growing startups. The state encourages entrepreneurship and rewards savvy business owners willing to take risks and start their businesses.
Don’t let the fear of complicated processes fear you. Take the chance of forming a startup in one of the country’s most pro-business states with the help of NCH.
NCH’s business specialists are here to help you with our business formation services. From business entity formation to tax planning, we’ll provide all the support you need to register a business in Wyoming.
Visit our website here or call us at 800-508-1729 for more information.