Starting a Business in Your State

When you decide to start a Limited Liability Company (LLC) or a Corporation, you can choose to form your company in any state, regardless of where you are based.

A non-U.S. resident, International Entrepreneur / Founder, a Digital Nomad with no physical presence in the U.S.A, has the luxury to pick and choose which state would be best to incorporate their business.

If you are a US resident, choosing the state to form your business can be complex, especially if you have a physical presence in your home state. In most cases, it is best to form an LLC or corporation in your home state if that is where you live and operate your business.

• Forming A Company For A Physical Store
• Forming A Company For An Online Business
• Pros And Cons Of Each State
• Wyoming Holding Company To The Rescue (A.K.A. Anonymity Planning or How to Avoid Exposing Your Company to Potential Creditors)
• How Triple B Business Can Help You?
• FAQ

Forming a Company For An Online Business

When you’re planning to launch an Online Business you’re probably thinking of filing in Wyoming or Delaware. If you’re U.S. person (U.S. citizen or permanent U.S. resident) from a foreign state, you may find incorporating an online business in Wyoming or Delaware quite appealing because both states offer many advantages to the owners / shareholders.

“I work online”

If your business primarily operates online and is not tied to a specific location, it may be more beneficial to form a Wyoming LLC or corporation due to the stronger asset protection laws, anonymous ownership options, lower fees, and lack of state taxes. These factors can provide significant advantages for businesses that primarily operate online and may not be tied to a specific location.

“But I have an eCommerce Business…”

For a U.S. citizen or U.S. resident who are storing and selling goods or products online through an eCommerce site and/or marketplaces, and operating from their home state, it is generally recommended to file for a business entity in the location where the business is being conducted. That being said, many entrepreneurs opt to incorporate in Wyoming due to many benefits such as strict privacy laws, no state corporate and individual income tax and low business maintenance fees. Many eCommerce business owners who are concerned about their privacy in their home state also favor a Wyoming Holding Company.

It is important to carefully consider these factors and research the specific requirements and regulations in different states before making a decision on where to form a business entity.

Forming a Company For A Physical Store

When starting a business for a physical store-front, it is often suggested to consider states with low or no business taxes, or states with business-friendly laws such as Delaware or Wyoming.

However, it may be beneficial for small businesses, particularly brick and mortar companies, to form their business in their home state, where they will likely be conducting most of their operations. Forming your business in another state may not be a good choice if you are starting a small local business.

That being said, if you are concerned about the lack of privacy laws in your home state a Wyoming Holding Company may be a good option to consider.

Also worth considering:

No matter what type of business you are planning to start below are some of the things worth considering:

• If your business is physically located in the state where you live and you conduct most of your business there, filing in your own state may be the best option because you may not have enough business in another state to make it worthwhile to set up there.

• If you register your company in another state, but meet the definition of doing business in your home state (or any other state), you have to take the additional step of registering it as a Foreign Business Entity (also known as Foreign Qualification). 

• Most people are unaware of this one simple fact: Taxes Are Paid Where Money is Made.

Companies form in one state but are legally required to register in any additional state they do business in (a process called “Foreign Qualification”). Now, every state varies a bit on what is considered “doing business,” but if you have a physical presence (like an office or warehouse) or employees in a state, you’re usually considered to be doing business there.

Pros & Cons of each state

Here is a quick look at the Pros & Cons of each State:

Alabama	Cheap labor	The ONLY state where forming a business is a two-step process
Alaska	No personal income tax	Makes you disclose ownership of companies as public information
Arizona	LLCs don’t have annual reports	New LLCs have to publish in newspapers
Arkansas	Low income tax rates	High franchise tax report
California	Lots of potential customers	$800 minimum franchise tax payment
Colorado	Online filings, processed instantly	Annoying annual report system
Connecticut	None	Everything is expensive and redundant
Delaware	Famous for being home of many big holding corporations	High taxes for businesses actually operating in Delaware
District of Columbia	Lots of potential clients needing services	Dealing with the DLCP and business licensing departments
Florida	No personal income tax	Just don’t miss your annual report filing, it’ll cost you …
Georgia	Inexpensive fees	Pointless newspaper publication requirements
Hawaii	Laid back attitude, easy-going lifestyle	High gross receipts tax
Idaho	No fee for annual reports	Finding highly skilled and motivated employees
Illinois	None	High taxes, high fees, stifling regulations
Indiana	Reasonable fees, reasonable taxes	None
Iowa	Biennial reports, low costs	Unfortunately, there’s just not a lot of business in Iowa
Kansas	The SOS is fast and helpful	Costs are fairly high compared to the rest of America
Kentucky	Cheap place to initially start a business	Redundancy, filing at the state level and then the county level.
Louisiana	Friendly, helpful people	Redundant, complicated procedures
Maine	Reasonable fees	Weird/confusing lingo about clerks and commercial registered agents
Maryland	Less regulatory than DC	It takes two months to process filings
Massachusetts	They’re actually good with their expedited filings	No privacy for owners, high start-up costs ($500 to form a business and $500 to file the annual statement) and high corporate tax rates
Michigan	Taxes are pretty low and office space is super cheap now	Not good for auto-makers
Minnesota	Does not charge domestic businesses an annual report fee	Slow to process your filings
Mississippi	Not a highly regulated state	Horrible filing fees for out of state, foreign business entities
Missouri	An inexpensive and reasonable place to do business	The initial report after your initial filing is purely redundant
Montana	Inexpensive, quick filings	None
Nebraska	Low start-up costs	They require original inked signatures, so 1980’s…
Nevada	Great asset protection rules	It’s become very expensive and over-regulated
New Hampshire	No sales tax	Original signatures required, slow to process filings
New Jersey	None	Minimum $500 tax, plus prepay 1/2 for the next year
New Mexico	Great laws for LLCs	Their foreign corporation annual reports are awful
New York	None	It’s the second worst state to do business in
North Carolina	None	They deny some filings for weird reasons
North Dakota	Lots of opportunity these days	Their infrastructure has yet to catch up
Ohio	No annual reports	The Department of Revenue is confusing
Oklahoma	A reasonable and cheap place to do business	Some confusing regulations, filings and procedures…
Oregon	No sales tax	High income taxes
Pennsylvania	No annual reports	Lots of high fees and paperwork
Rhode Island	None	High fees, high taxes, minimum tax payments
South Carolina	Low taxes, no annual reports	They’re kind of slow, and require original signatures
South Dakota	No personal income tax	Very aggressive Department of Revenue
Tennessee	None	High filing fees and taxes
Texas	Great for small businesses	The SOS charges $1 for name searches
Utah	5% income tax, $70 to start your business	They send EVERYTHING to your registered agent
Vermont	Low cost registrations and annual fees	Original signatures required, confusing forms
Virginia	It’s a little better than DC	High taxes and fees for big corporations
Washington	No personal income tax	Over-regulated
West Virginia	Easy and reasonable state to do business in	None
Wisconsin	None	High fees, weird procedures and the foreign corp. annual report is not good
Wyoming	Low taxes, fees, strict privacy and great asset protection laws	None

WYOMING HOLDING COMPANY TO THE RESCUE
(A.K.A. Anonymity Planning Or How to Avoid Exposing Your Company to Potential Creditors)

Wyoming Holding Company and Setting Up Structures

A holding company provides benefits which are impossible to provide via a single business entity. Holding companies are created the same way other companies are, and may be either LLCs or Corporations. Instead of engaging in operations, they merely own and control other companies and assets.

Forming a Wyoming Holding Company(s) can offer many benefits including providing anonymity where possible, isolating liabilities and minimizing taxes when feasible. The Wyoming Holding Company can engage in operations via multiple business entities (subsidiaries or sister companies) when needed. Assets may also be loaned or leased to third parties.

This advanced business model, also known as Setting Up Structures, requires some effort to setup but the resulting benefits more than pay for themselves.

In more simple terms, Setting Up Structures means using an entity that’s been setup in Wyoming to hold all of your other business interests where you are engaging in passive activities.

Anonymity Planning

While it is generally more advantageous to form your LLC or Corporation in your home state, there may be situations in which the lack of privacy and anonymity offered by your home state presents a concern. If the public disclosure of information regarding business owners, members, shareholders, and directors is a concern, it may be necessary to consider alternative options that offer greater privacy protections. Wyoming Holding Company can be real and beneficial business tool part of the Anonymity Planning thanks to the strict privacy laws of Wyoming.

Anonymity Planning is a business strategy that allows you to protect the privacy of your business affairs with all the other benefits of Holding Companies. Setting Up Structures by creating Holding Companies is a major part of Anonymity Planning.

Anonymity Planning involves the strategic creation of business structures, such as forming an LLC (The Wyoming Holding Company) in Wyoming and then establishing another LLC or corporation (The Operating Company) in your home state. The Wyoming Holding Company that you first formed will become the shareholder or member of your other LLC or Corporation in your home state.

Who Uses Holding Companies and Anonymity Planning?

• Real Estate Investors: Owning and renting real estate is inherently risky. Separating property management from the real estate can prevent catastrophic losses from slip and fall and other frivolous lawsuits. Follow our link to learn more about real estate holding companies.
• E-Commerce: Opening subsidiaries for different product lines not only isolates risk, but makes it easier to sell product lines individually.
• Families: One holding company makes it easier to manage disparate interests in other companies and assets. It also allows for the filing of a consolidated return.
• Estate Planning: Rather than the effort of an estate plan, some choose to pass assets on via an LLC. While we always recommend an estate plan, generally using a trust, we know some clients do view this as a more affordable option.
• Other Risky Industries: Any industry with risky but valuable assets. Those assets should be owned by one company and operated by another. See our examples below for more details.

While LLCs and Corporations may both be used for a Wyoming Holding Company, for most U.S. owner(s) we recommend Wyoming Anonymous LLC for a Holding Company.

Forming a Wyoming Holding Company as a Wyoming LLC or a Wyoming Corporation is no different than forming the same type Wyoming business entity and you can hire us to form the business entity for you.

Anonymity Planning by Setting Up Structures requires careful planning and execution by a Professional Business Attorney. This advanced business model is tailored to meet the specific needs and circumstances of your business. While implementing Anonymity Planning may involve additional costs, such as the formation of multiple companies in different states and the involvement of a Professional Business Attorney, it is worth considering if maintaining anonymity is a priority for your business.

You may hire us to form a Wyoming Holding Company for you but we strongly advise against trying to implement Anonymity Planning by setting up structures without the involvement of a Professional on your own, as one small mistake may render the business model useless and can be costly as a result.

For more information on Anonymity Planning, please feel free to contact us or click the button below to find out more.