When starting a business, one of the first questions is: Where should I form my LLC? For many, Texas seems like an obvious choice due to its size and no state income tax. But when it comes to privacy, cost, asset protection, and long-term ease of use, Wyoming outshines Texas in nearly every category, especially for online sellers, real estate investors, and freelancers.
Whether you’re running an e-commerce store, managing rental properties, or providing freelance services, this article explains why forming your LLC in Wyoming may be the smartest move, no matter where you live.
Why State Choice Matters for LLC Formation
Your LLC doesn’t have to be formed in the state where you live or work and in many cases, it shouldn’t be. Choosing the right state can protect your identity, reduce taxes, and simplify compliance. That’s why thousands of entrepreneurs from all 50 states choose Wyoming for their LLC formation.
Let’s see how Wyoming and Texas compare in six key areas that matter most.
1. Privacy and Anonymity
Wyoming LLC:
- You can form an anonymous LLC, the names of the owners (members) are not publicly disclosed.
- Ideal for real estate investors who want to keep their property ownership private and online sellers who wish to separate their personal identity from their brand.
Texas LLC:
- Requires public disclosure of managers or members.
- Not suitable for those who want privacy, everything is part of public record.
Winner: Wyoming. Best for privacy-minded entrepreneurs and investors.
2. Asset Protection
Wyoming LLC:
- Offers charging order protection even for single-member LLCs, protecting your personal assets from business lawsuits.
- Popular with real estate investors using LLCs to hold properties and limit personal liability.
- Excellent for freelancers looking to shield personal savings from business risks.
Texas LLC:
Asset protection laws are decent but don’t apply as strongly to single-member LLCs.
Winner: Wyoming. Superior protection for solo business owners and asset holders.
3. Taxes and Annual Requirements
Wyoming LLC:
- No state income tax
- No franchise tax
- Annual report fee: only $60
- Minimal paperwork and low ongoing costs, ideal for online sellers and freelancers who want to keep overhead low.
Texas LLC:
- No state income tax
- Franchise tax applies (even if nothing is owed, paperwork must be filed)
- Higher administrative burden
Winner: Wyoming. Lower cost and easier compliance for all business types.
4. Formation Cost and Speed
Wyoming LLC:
- State filing fee: $100
- Filing completed online in 24 hours
- Affordable Registered Agent services available
Texas LLC:
- State filing fee: $300
- Processing can take longer
- More expensive upfront
Winner: Wyoming. Easier and faster to get started, especially if you’re launching a side hustle or testing a new product.
5. Ideal for Online Sellers
If you run an e-commerce store (Shopify, Amazon FBA, Etsy, etc.), your business is likely location-independent. You need:
- Legal protection
- Easy banking
- Minimal state interference
Wyoming offers exactly that. With no sales tax collection obligations outside the state and strong privacy laws, it’s a favorite among digital entrepreneurs.
Texas, on the other hand, involves more paperwork and lacks the privacy protections that online sellers often want.
Best choice for online sellers: Wyoming LLC
6. Ideal for Real Estate Investors
Many investors form LLCs to hold rental properties and shield themselves from lawsuits. Privacy is also key. Tenants, competitors, or trial lawyers shouldn’t easily find out what you own.
Wyoming’s anonymous LLC structure helps keep your portfolio private and protected. It also allows you to form series LLCs for separating assets, without all the extra hassle found in other states.
Best choice for real estate investors: Wyoming LLC
7. Ideal for Freelancers and Solopreneurs
Freelancers often operate solo and may worry about mixing personal finances with business activities. A Wyoming LLC:
- Protects your personal assets
- Lets you open business bank accounts
- Keeps your name off public records
- Costs less to maintain
Whether you’re a writer, designer, developer, coach, or consultant, Wyoming gives you big-company protection on a small budget.
Best choice for freelancers: Wyoming LLC
What If I Don’t Live in Wyoming?
No problem. You can live anywhere in the U.S. and still form a Wyoming LLC. As long as your business doesn’t have a physical office or employees in your home state, you may not need to register there.
If you do operate locally, you can form a Wyoming holding company and then register a local LLC that reports to it. This is a popular structure for real estate investors and online sellers with remote teams.
Final Verdict: Wyoming LLC vs Texas LLC, Wyoming Wins!
While Texas has a lot going for it, Wyoming is the clear winner when it comes to:
- Privacy
- Asset protection
- Simplicity
- Cost
- Flexibility for remote and location-independent businesses
If you’re serious about protecting your business and personal life, forming a Wyoming LLC is the smart move, no matter what state you call home. As your Wyoming Registered Agent, Legal Formation will file your Wyoming LLC for free, just pay the state fee.
Registered Agents that offer LLC Formation
If you aren’t interested in Legal Formation LLC handling your Wyoming Limited Liability Company formation, here is a list of other Registered Agents that can file a Wyoming or a Texas LLC. Disclosure: The links below are affiliate links, meaning we may earn a commission if you choose to make a purchase, at no extra cost to you.
FAQs About Wyoming LLC vs Texas LLC Formation
1. Can I form a Wyoming LLC if I live in New York or California?
Yes. Many people do. Just be aware of your state’s rules for doing business locally. You may still need to register if you operate physically in your home state.
2. What if I have multiple income streams, like freelancing and selling online?
A Wyoming LLC is perfect for this. You can manage multiple income streams under one LLC or set up a holding company with separate operating LLCs.
3. Can I open a business bank account with a Wyoming LLC?
Yes. All major banks accept Wyoming LLCs as long as you provide proper documentation and an EIN from the IRS.
Wyoming LLC $125
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