Wondering which state to domicile your corporation in? Frankly, it depends on your goals. Delaware is the preferred jurisdiction for Fortune 500 companies because of its laws regarding corporate governance and its fast track legal system which is designed to settle corporate disputes quickly.
View the chart below for a quick overview of why we recommend Wyoming for corporate service s. Here’s a hint, though, Wyoming has the lowest state filing fees (take that Nevada), no state taxes (take that Delaware) and the strictest privacy laws.
If your aim is to become a Fortune 500 company, you plan on attracting venture capital, or intend on an IPO then Delaware's case law offers wonderful insights into what you may and may not do, along with the likely consequences of such a course.
Unfortunately, though, Delaware has both a corporate and personal income tax, a franchise tax, stricter reporting requirements and considerably more regulations compelling disclosure of personal information.
Our guess, though, is you aren’t a fortune 500 executive. You are an individual looking to minimize bureaucratic headaches and taxes while maximizing privacy.
A corporate veil separates the liabilities of a company from its owners, thus protecting owners risk. Where fraud is not present, the veil may not be pierced.
Nevada has raised filing fees for several years in a row. This is due to pressure on their legistalture from public employees and education unions. Wyoming, has left its filing and incorporation fees the same for a decade. This is because we have a $10 billion dollar rainy day fund know such fees scare away companies. Except in the case where you have assets or employees in Nevada, these enhanced fees are an unnecessary burden.
Alist and business license fees which were already the 3rd highest in the nation were increased to $350 for LLCs and a whopping $650 a year for profit corporations.
Because of Nevada’s symbol as a haven, such corporations draw increased scrutiny including from the IRS. Wyoming doesn’t have this stigma meaning you may more easily fly under the radar. Our Wyoming registered agent services also provide privacy.
There are no income taxes on companies or individuals in either Nevada or Wyoming. However, Nevada is ranked "the worst state to do business in" by the Tax Foundation because of new changes to Nevada taxation.
There is a new “Commerce Tax” on GROSS REVENUE! Nevada now combines the income of multiple corporations if there’s a common owner and applies the Commerce Tax when the combined revenue exceeds the $4 million threshold. While limited to those with more than $4M in revenue, with recent trends in their tax laws and filing fees it’s not hard to imagine things become worse rather than better.
Wyoming is not considering ANY tax and neither needs nor wants to. Wyoming has run a multiple year budget surplus and has over $10 BILLION dollars saved for rainy days.
Wyoming provides for true continuance in its corporate laws. Many states allow domestication, but they are different. This makes Wyoming one of two. When a foreign corporation redomesticates in new state it must either create a brand new corporate entity in that state or may choose additional domiciles. However, Wyoming creates the legal fiction that the corporation has always maintained its domicile in Wyoming. View our article on Wyoming LLCs here.