LLCs are direct and affordable solutions to protect your business, assets, and lower your tax bill. Between LLCs in New Mexico and Wyoming, you get cost differentials. For example, significant differences in yearly requirements. If you are a foreigner, Wyoming and New Mexico are states that are among the best for foreign owners.
New Mexico is regarded to be better for foreigners compared to Wyoming. Primarily, New Mexico values privacy more. Also, unlike in Wyoming, you are not required to file annual reports and reveal who owns your company.
Comparison Overview
| Points of Difference | New Mexico | Wyoming |
|---|---|---|
| LLC Filing Fees | $50 | $100 |
| LLC Annual Fee | None | $60 |
| LLC Annual Report | None | Yes |
| One-person corporation | Yes | Yes |
| Residency Requirement | None | None |
| Registered Agent Requirement | Yes | Yes |
| Due Date | Anniversary Month | Annual, Anniversary Month |
| State Tax Return | Yes | Yes |
| Officers and members have privacy | Yes | Yes |
| Corporate Tax Rate | 4.8 - 7.6% | None (0) |
| Personal Tax Rate | 1.7 - 4.9% | None (0) |
| Asset Protection | High | High |
| Social Security Number Needed | Yes | No |
Registering an LLC as a Foreigner
Any non-U.S. residents would be able to incorporate a business in any state. States like New Mexico, require no public register or disclosure of shareholders or members. Therefore, it is wise to see how a state like Wyoming or New Mexico may differ on fees, privacy, and functionality.
When a foreigner files an LLC, there needs to be a registered agent based in the state. Moreover, the business in question required an address in the USA. If you maintain strong ties to a state with your company, then having an office or presence is best in that state.
As stated in paragraph 1 In “How to Find (or Become) a Registered Agent” “All business entities filed in Wyoming should …. maintain in this state a registered agent to accept service of process.” In summary, the failure to keep an in-state registered agent will mean the termination or cancellation of an LLC.
Overall, the benefits of filing an LLC in another state go away. Because it would be more advantageous registering the company in your state.
Registering an LLC as an American Out-of-State
New Mexico is better for doing business outside of the state. In addition, New Mexico does not require state residence. You are allowed to do business in your home state or abroad without additional filing requirements. The laws of your state or domicile are separate from any New Mexico LLC.
On the other hand, in Wyoming, if you live out of state, you will have to deal with different laws. An LLC based out of state would have to follow local laws. For example, to protect your LLC assets from garnishment by creditors then you would follow Wyoming law.
In the end, filing an LLC in your home state is the best move for most small businesses. An in-state LLC means you can avoid any unneeded and continual fees from an out-of-state LLC.
LLC in New Mexico
Nearly every state requires an annual report of business activities. New Mexico does not. This is one of the many advantages of having an LLC in New Mexico.
All states mandate the appointment of a registered agent within the state. As stated in the second step of the Chamber of Commerce Site, a registered agent must be a state resident or business entity with an address or business office in New Mexico.
Tax and Fees: In New Mexico, there is no requirement to pay an annual or flat fee. Pass-through taxation is special to New Mexico. For example, this is when businesses don't pay taxes on the individual level. In summary, this type of taxation income goes to the owners of the business. From there, it is that individual who pays personal income taxes for their share only.
LLC taxation and specifications are simpler in New Mexico. So, with a New Mexico LLC, the double taxation that corporations require will not apply to you. All in all, you can record your company's earnings as if they are yours.
Privacy Differences:
When you have to decide about privacy, New Mexico is better. A New Mexico LLC is best for its low fees and ease of anonymity with privacy.
New Mexico takes privacy seriously. There is no need to list the names of LLC members on the Articles of Organisation. Overall, a crucial factor as a foreigner or anyone else when forming a company is anonymity. Moreover, for shareholders, LLCs are only required to list who organizes initially the first year. No Shareholders are or need to be listed. That means whoever organizes the LLC will have their name and address appear on the Articles, not shareholders.
Moreover, New Mexico does not ask for the name of a company manager for an LLC. Usually, most states require this to be included in the articles of the organization during filing.
Costs:
A New Mexico LLC is easier and more cost-effective. Compared to Wyoming, an LLC in New Mexico is more affordable because you have no annual fees. The New Mexico state fee is $50, which is reasonably priced. As well, there are no annual reports or fees required to be filed with New Mexico overall.
The costs will vary depending on location and industry, but usually, these fees are not too high. Moreover, costs and fees may depend on what your industry is in general. Expect to pay fees and taxes as a New Mexico LLC owner. In New Mexico, there is a federal income tax, state income tax, and more, depending on your business. For example, you might have to factor in a payroll tax with, of course, sales tax and more.
LLC in Wyoming:
For foreigners, Wyoming has a friendly business environment, no taxes, and less red tape. When you establish an LLC in Wyoming as a foreigner,there is no residency beecause you pay no state taxes.
This attracts many people to Wyoming because of the appealing LLC and business reputation. Many foreign or out-of-state businesses that want to pay taxes, like a Wyoming company. An interesting fact is that Wyoming LLCs have a long history with case law. Wyoming's history dates back to 1977. However, do note that LLCs need to as stated by Wyoming: Series Limited Liability Company follow the constitution and laws of Wyoming.
Taxes: Wyoming is one of only nine states with no Individual income taxes.
Wyoming has zero business tax, so corporations or LLCs pay no tax on their businesses, including zero franchise tax and stock tax.
If you don’t have an office in Wyoming, then your tax status is similar to what it would be for an online business. In essence, you do not pay state taxes, but are obliged to pay federal taxes.
Privacy: Wyoming is great for anyone seeking privacy as an LLC. Thus, members, shareholders, CEOs, and owners are not disclosed for the public record.
Wyoming LLCs are attractive because of strict privacy laws. So you can maintain a low profile and guard your privacy. There is anonymous ownership in the state of Wyoming.
For investors, Wyoming does not request members or managers to be listed. As an investor, you will not be revealed. Your anonymity as an investor is protected. Only the registered agent and person who files the paperwork will be disclosed, thus guaranteeing privacy.
Costs: Setting up an LLC in Wyoming means generally paying low fees. Costs for setting up an LLC are $100, in terms of fees. Give or take some minimal setup fees, filing an LLC is easy. In comparison, when you file with the Wyoming Secretary of State, it is cheaper than in most states.
Conclusion:
In comparison, New Mexico is easier and more affordable. Unlike Wyoming, New Mexico does not require the filing of an annual report. Moreover, New Mexico does require reporting of who owns the LLC. Thus, New Mexico offers more layers of privacy.
A New Mexico LLC is easier and more cost-effective. Compared to Wyoming, an LLC in New Mexico is more affordable because you have no annual fees. Moreover, no annual corporate tax for New Mexico LLCs.
The biggest difference is that Wyoming has lower registration and processing fees compared to New Mexico. While in New Mexico, forming an LLC costs less than $300 from beginning to end. You need to weigh costs vs. privacy when you evaluate each state.