Texas vs. Wyoming LLC — Two No-Tax States Compared
Wyoming and Texas are both popular for LLC formation due to zero state income tax, strong asset protection, and business-friendly laws. The comparison often comes down to: do you operate in Texas (form there) or want the absolute cheapest state (Wyoming's $100 formation, $60/year)? For all comparisons, see our comparisons hub.
Quick Comparison
| Factor | Texas LLC | Wyoming LLC |
|---|---|---|
| Formation fee | $300 | $100 (or $50 online) |
| Annual fee | $0 (under $2.47M revenue) | $60 minimum ($60-$500 based on assets) |
| State income tax | None | None |
| Foreign LLC registration in TX (if operating in TX) | Not needed | $750 |
| Series LLC | Yes | Yes |
| Charging order protection | Strong | Very strong (single-member protection explicit) |
| Privacy | Member names on public filing | No member names on filing |
| LLC statute | the Texas Business Organizations Code (modern) | WY LLC Act (also modern, LLC-friendly) |
| Court system | Large state courts | Small state courts (less precedent) |
Total Cost Comparison (Operating in Texas)
Texas formation (operating in Texas):
- Year 1: $300 + $99 (RA) = $399
- Annual: $0 + $99 (RA) = $99
Wyoming formation (but operating in Texas):
- Year 1: $100 (WY) + $750 (TX foreign) + $99 (TX RA) + $99 (WY RA) + $60 (WY annual) = $1,108
- Annual: $60 (WY) + $0 (TX) + $99 (TX RA) + $99 (WY RA) = $258
5-year cost difference: Texas saves approximately $1,345 for businesses operating in Texas.
When Wyoming Makes Sense
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Get Started1. No physical operations in Texas or any specific state For purely online businesses with no employees or property in any state, Wyoming's $100 formation fee and $60/year annual report make it one of the cheapest states to maintain an LLC.
2. Strongest possible single-member charging order protection Wyoming's LLC Act (WY Stat. 17-29-503) explicitly provides that a charging order is the EXCLUSIVE remedy for judgment creditors of a single-member LLC. Texas the Texas Business Organizations Code also makes the charging order the exclusive remedy, and subsection (g) explicitly states the section applies to both single-member and multi-member LLCs. Both states offer strong, explicit protection.
3. Maximum privacy Wyoming does not require member or manager names on formation documents. Combined with Wyoming's nominee service options and no information exchange agreements, it offers the highest privacy of any US state for LLC owners.
4. Holding company for passive investments If your LLC holds investments (stocks, bonds, real estate outside Texas) and does not actively operate in any state, Wyoming provides low-cost maintenance with excellent privacy and asset protection.
When Texas Is Better
1. You operate in Texas Same analysis as Delaware: if you have a Texas presence, forming in Wyoming and registering foreign in Texas costs $1,108 year one vs. $399 for Texas formation. The math never recovers.
2. You need in-state credibility A "Wyoming LLC" operating in Texas can look odd to local customers, vendors, or lenders. A Texas LLC signals that you are invested in the Texas market.
3. Series LLC in Texas Both states offer Series LLCs, but if your series will hold Texas real property, a Texas-formed Series LLC avoids cross-state recognition issues.
4. Larger economy and legal infrastructure Texas has extensive LLC case law from its large court system. Wyoming, with a much smaller population and fewer cases, has less judicial precedent for complex LLC disputes.
The Charging Order Question
One of Wyoming's strongest marketing points is its explicit single-member charging order protection. How does Texas compare?
Texas: the Texas Business Organizations Code states that a charging order is the exclusive remedy with respect to a member's interest, and subsection (g) explicitly extends this to both single-member and multi-member LLCs. The charging order lien may not be foreclosed on under subsection (c).
Wyoming: WY Stat. 17-29-503(c) explicitly states the charging order is the exclusive remedy for both single-member and multi-member LLCs. No foreclosure on the interest. This is the clearest statutory language in the country.
Practical impact: For most small business owners operating in Texas, the difference is minimal. The Texas statute is strong. Wyoming's additional clarity primarily benefits high-net-worth individuals specifically structuring asset protection vehicles.
FAQ
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Get StartedIf Wyoming is cheaper, why would anyone form in Texas?
Because if you operate in Texas, you must register as a foreign LLC ($750), maintain two registered agents, and file in both states. The total cost exceeds Texas-only formation within the first year. Wyoming is only cheaper if you have no physical presence in any state.
Can I form in Wyoming for privacy and operate in Texas?
You can, but when you register as a foreign LLC in Texas (Form 304), your LLC's name, registered agent, and management information appear on the Texas SOS public records. The privacy advantage of Wyoming's filing is largely negated once you register in Texas. Your Texas-facing information is public regardless.
Which state is better for real estate investors?
If properties are in Texas: form in Texas. Real property creates clear "transacting business" nexus, requiring Texas registration anyway. A Texas Series LLC ($300 one-time, unlimited series) is the most cost-effective structure for Texas-based real estate portfolios.
What about Wyoming's lower annual fee ($60 vs. $0)?
Texas actually wins here. Texas LLCs under the revenue threshold file the franchise tax report at no cost ($0). Wyoming charges $60 minimum per year. Texas's $0 ongoing cost (below $2.47M revenue) is cheaper than Wyoming's $60.