Privacy State LLC costs compared WY, NM, DE

Many LLCs are created in New Mexico, Delaware and Wyoming for privacy reasons by people who live outside those states. These states do not require that the “Members” or owners of the LLC are publicly disclosed and there are a wide variety of business, asset protection and personal security issues that motivate people to take advantage of the thin veil of privacy these jurisdictions can provide. (See our notes on secrecy below). 

All of these options require the use of registered agent, an independent commercial service that acts as your LLCs official point of contact for a variety of issues, including any service of legal process. Registered agents vary on annual cost depending on the sophistication of their office and the services they provide, ($50-$1000+) which can go up to the level of a virtual office if required complete with answering service and mail forwarding. Many include managing your annual compliance requirements with the state, which we always recommend, to avoid the common issue of an LLC being de-listed because you missed responding to a bill or a form.

One common question about the use of these privacy states is how the fees and taxes compare, which we break down here below. Note that these are just the registration costs and do not include the legal fees for an LLC obtained through a law firm that includes an operating agreement (required for any real business use) and any other accompanying advice and services required. Legal fees are separate and vary from market to market and based on the complexity of your organization and fact pattern.

New Mexico: Noted primarily for maximum owner anonymity with zero ongoing state annual report fees, making it popular for low-cost privacy. 

• Formation cost: About $50.
• Annual state fee: $0.
• State income/franchise tax: $0 for out-of-state operations.

Wyoming: Features pioneer asset protection laws where a charging order is the exclusive remedy for creditors for both single and multi-member LLCs, backed by low annual fees and strong owner privacy.

• Formation cost: About $100.
• Annual state fee: $60 to $65 (annual report fee).
• State income/franchise tax: $0.

Delaware: Highly favored for corporate predictability and its specialized Court of Chancery, though it requires a flat $400 annual franchise tax even for out-of-state operators.

• Formation cost: About $110.
• Annual state fee: $300 (Alternative Entity/Franchise Tax).
• State income/franchise tax: $0 on income earned outside Delaware, but the $300 flat fee applies regardless
• Expedited Filing (Optional): $50 to $1,000+ extra depending on how fast you need the state to process it (such as 24-hour or 1-hour turnaround)

NOTE: THERE IS NO SUCH THING AS “SECRET”

Any plan that relies on the hope that assets will not being discovered and/or being willing to lie about it (crypto bros take note) if asked, is the work of an amateur and malpractice if provided by an attorney. We explain to clients that the idea of “secrecy” is a myth and routinely fails as an asset protection plan for several reasons:

-              You must disclose your interest during discovery, depositions etc., they will eventually find it

-              If you do not disclose the assets when you asked about them, you are likely at risk committing perjury  

Asset Protection attorney Ike Devji has over two decades of experience devoted exclusively to asset protection planning.  He helps protect thousands of clients across the United States and is the recipient of the State Bar of Arizona President's Award for Asset Protection planning.