Wyoming vs New Mexico:
Which state is best for your LLC? 2025

Introduction: why the state you choose matters

When you open an LLC in the United States as a non-resident, one of the first and most important steps is to choose the state of formation. Contrary to what many believe, it is not necessary to choose the state where you live or where your business operates — in fact, if you do not have a physical presence in the USA, you can choose any state.

This decision directly affects three key aspects: annual maintenance costs, the level of privacy you have as an owner, and the legal protections you enjoy. The two most popular states among Latin American and foreign entrepreneurs are Wyoming and New Mexico.

Comparative table: Wyoming vs New Mexico

Wyoming: advantages and disadvantages

Wyoming pioneered the creation of the LLC structure in the United States (1977) and since then has built one of the most business-friendly legislations in the country.

Advantages of Wyoming

• World-class asset protection: Wyoming has so-called "charging order protection," which makes it nearly impossible for a creditor to take control of your LLC or its assets in the event of a personal lawsuit.
• No state income tax: neither for individuals nor for companies.
• Robust Privacy: Member names are not in the public domain in the state registry.
• Reconocimiento internacional: Wyoming es ampliamente reconocido y genera confianza en inversores, bancos y socios internacionales.
• No state inheritance tax: beneficial if you plan to pass the business on to future generations.

Disadvantages of Wyoming

• Mandatory annual fee: $60 USD minimum per year, plus registered agent fee.
• Annual report required: you must submit an Annual Report, although it is simple.
• Higher total cost: can be $150–$250 USD/year more than New Mexico in maintenance.

New Mexico: advantages and disadvantages

New Mexico is relatively less known than Wyoming or Delaware, but for foreign entrepreneurs forming their first LLC, it offers a combination that is hard to beat: maximum privacy and minimum costs.

Advantages of New Mexico

• Sin fee anual estatal: una vez pagada la tasa de formación (~$50), no hay fees anuales obligatorios que pagar al estado.
• No Annual Report: There is no annual report to file with the state, which simplifies maintenance.
• Maximum Privacy: New Mexico is one of the few states where the names of LLC members do not even appear in the public record of the Secretary of State.
• Low training costs: The state fee is approximately $50 USD, the lowest among the recommended states.
• Rapid training: usually ready in 1 to 3 business days.

Disadvantages of New Mexico

• Less recognition: Some banks or investors may ask questions about why you chose New Mexico.
• Somewhat less asset protection: although strong, it does not have the same level of charging order protection as Wyoming.
• Less presence in the startup ecosystem: it is not the standard state for startups seeking investment.

What about Nevada, Delaware and Florida? Brief analysis

Delaware

Delaware is the preferred state for startups seeking to raise venture capital (Venture Capital). Most accelerators and investment funds in Silicon Valley require that the company be incorporated in Delaware. However, for a Latin American entrepreneur who is not looking for institutional investment, Delaware has high costs (minimum Franchise Tax of $300/year) and greater bureaucracy.

Snowfall

Nevada was once the favorite for privacy and asset protection, but in recent years its costs have increased considerably: the annual fee can exceed $350 USD, and the administrative complexity is greater. Today, Wyoming surpasses it in most aspects relevant to nonresidents.

Florida

Florida is a reasonable option if you have a physical presence in the state or clients in the Miami region. It has a formation tax of ~$125 USD and an annual report of $138.75 USD. However, for non-residents without ties to Florida, New Mexico or Wyoming offer better conditions.

Our recommendation: which state to choose in 2025?

For the vast majority of Latin American and European entrepreneurs who form their first LLC without a physical presence in the USA, our recommendation is:

If you have questions about which one to choose for your specific case, the Start Companies team can advise you. We review your business model and give you a personalized recommendation at no additional cost.