The last decade has seen governments around the world step up, in a big way, their fight against tax base erosion. While the effects have been many, the reduction in privacy is, in my opinion, the most severe. This is, in large part, due to the pressure and restrictions which have made registering a company in one of the high privacy / low tax jurisdictions impractical for most entrepreneurs. Thankfully, not all is dark and a few options still exist for those who wish to keep their name off the registers. In this post, I cover one of the best structures from a privacy stand-point, the Wyoming LLC.
It will probably come as a surprise to some to learn that one of the best jurisdictions in the world, privacy-wise, is the United States. At least, a part of the United States. More specifically, the state of Wyoming.
Home to Yellowstone, Wyoming is the perfect embodiment of the American West. Spectacular mountain ranges, cowboys, small-town vibe, remoteness… it has it all in spades. Wyoming also has some of the best privacy laws in the world, especially when it comes to business and assets protection. To make things even better, it is one of the few US states with no corporate taxation.
Of great importance here is that there is no requirement to disclose the ownership structure of an LLC registered in Wyoming. This means that no one, except for the owners themselves, knows who owns it (unless the owners choose to disclose this information, of course).
This sounds too good to be true, and it would be if Wyoming was located in any other country. It is part of the US, however, and this means that normal rules do not apply and that it gets to avoid being targeted in the same way other tax and privacy havens are. An excellent example of this is the OECD’s Common Reporting Standard. Most countries now participate in the program, which requires all financial institutions to collect and share financial data on their customers with the relevant tax authorities. The United States, on the other hand, does not participate and has made it clear that it is not interested in signing up. It is also infamously uncooperative when it comes to international tax matters, at least when it relates to non-US citizens / residents.
So it is possible to register a Wyoming LLC anonymously but what about ongoing compliance? Because Wyoming has no state-level corporate taxation, there is no need for Wyoming companies to file a state tax return. Only an annual report must be filed and there is no need to disclose the ownership structure in it. Unless work is physically performed from within the United States, there is also no need to file a federal tax return with the IRS. A Wyoming LLC with no Effectively Connected Income (see details here) generally has no US tax burden.
This anonymity and tax treatment makes the Wyoming LLC ideal for a wide range of location independent businesses. It also is ideal as a vehicle to hold assets, especially real estate.
Interestingly, a Wyoming LLC transacting exclusively in cryptocurrencies will not usually need to apply for an EIN.
It is important to understand that a name and address must be provided to the state as part of the registration process, for correspondence purposes. This means that an authorized agent must be appointed to avoid having to use the details of one of the owners.
To open a business bank account (and other financial accounts such as PayPal, Stripe etc), a tax ID is usually required and that is true both in the United States and abroad. In the US, this tax ID is referred to as the EIN and is issued by the IRS. While there is no need to disclose the ownership structure of the LLC during the application process, a responsible party must be appointed. Due to recent changes to the EIN application process, a natural person must now be appointed as the responsible party and that natural person must obtain an ITIN before being able to apply for the EIN.
A foreign-owned Wyoming LLC should avoid generating any ECI. This is crucial when it comes to keeping the company tax-free in the US.
I have developed an anonymous Wyoming LLC registration package which I sell here on Freedom Surfer. No personal information is collected as part of the registration process and payment can be made via a prepaid gift card to avoid creating a money trail. A special Operating Agreement is prepared for the LLC without the ownership details in it. It is instead added upon receipt, directly by the company owners to ensure full anonymity (a guide is provided). Click here for more details.