Wyoming is fast becoming the new hotspot for business incorporations, overshadowing Delaware, historically the first choice for business filings. The past five years have seen business incorporations in Wyoming increase threefold. In 2023, Wyoming recorded a 42% growth equivalent to 378 new companies per 1,000 adults – a stark contrast to the U.S. average of 36 new companies per 1,000 adults, excluding Delaware.
OpenCorporates revealed that Wyoming's increasing growth has mainly been due to the formation of Limited Liability Companies (LLCs), guaranteeing asset protection and shielding its owners from legal actions or creditors. Two factors that significantly account for the surge of new LLCs in Wyoming are its lower costs and enhanced asset protection.
While incorporation filing fees for LLCs in both Wyoming and Delaware are comparable ($100 in Wyoming versus $110 in Delaware), the overall business costs tend to be more affordable in Wyoming. Gary Pryor, the Senior Business Consultant at Waters Business Consulting Group, singled out the high franchise fees in Delaware as a significant hindrance for small to medium-sized companies. In contrast, Wyoming offers an attractive tax environment with low annual fees and no corporate income tax.
Another edge Wyoming has over Delaware is the availability of two asset protection forms. These forms are the 'corporate veil,' which assigns business liabilities and debts to the business, not its owners, protecting the owner's assets from seizure. The other form safeguards business from potential personal creditors.
Despite California having the highest number of total business incorporations, Wyoming emerged as the leader in 2023, marking a 42% per capita increase in incorporations. This surge can be attributed to Wyoming's cost-effective and asset-protective business environment. Prospective business owners, however, are advised to fully research costs and requirements involved in incorporating a business regardless of their chosen state.