Did you know that Wyoming is one of the best states to start your business? This beautiful state offers much more than stunning national parks and scenery. Zero percent corporate or personal income tax, minimal compliance requirements, and low costs are just a few reasons the Cowboy state is a top choice for new entrepreneurs.
Below, we'll explain everything the state has to offer and give you the exact steps to starting a business in Wyoming.
Validate Your New Business
All sustainable and successful businesses start with a solid, fleshed-out idea. What is it you want to do? Invent something new? Start a franchise? Or is an online business on your mind?
Here are a few things that can help you validate that great idea:
Develop a target customer profile by conducting customer surveys and interviews. In these surveys, you should collect information on demographics (age, location, income, and gender) and customer pain point(s) and preferences. What is the issue they are facing? How significant is the problem? How are currently solving it? What would they be willing to pay for the product or service? Which form of content do they prefer? You can start by surveying people in your network and then expand to online groups on Facebook or LinkedIn.
Study competition and marketplaces like Amazon or eBay to understand the product and/or service features and pricing.
Perform Google Trends and Google Keyword searches to identify trends, volume, and relevance.
Test out your physical product by creating a prototype. Don't want to do it yourself? Search for professional prototype manufacturers via ThomasNet. If you're offering a service, list out what you'd specifically offer and how.
Validating your business idea might take some time, but it'll help you know if you're on the right track or if you need to switch gears. It will also save you from pouring all your savings into something that never really had any "meat" to it.
Find a Catchy Name
Now, it's time to craft a catchy business name for your business idea. Why? A creative, unique, and appropriate business name can drive business growth and create brand recognition.
Keep the following guidelines in mind as you brainstorm a perfect and memorable business name:
The name needs to be unique and easily distinguishable.
Wyoming requires legal entities to have the appropriate identifiers added to their name. For example, an LLC must have the words "Limited Liability Corporation" or an abbreviation of it like "LLC" included in its name.
No use of restricted or prohibited words. In Wyoming, you need approval if you wish to use any of the following words:
Approval from the Department of Education
Approval from Banking Division
A detailed overview of Wyoming's naming statutes can be on the Wyoming Secretary of State page.
The proposed business name needs to be available. If it's already in use, your formation paperwork can get rejected, potentially opening you up to copyright or infringement lawsuits. You can see if your selected business name is available via Incfile's business entity search. Use these name search guidelines to complete a thorough search.
Run a domain search to make sure there's a match between your business name and website name (online presence is a must). This makes things a whole lot easier when marketing your brand. Found an available name that's unique and meets state naming standards? Let's make it yours. There are three ways you can stake a claim to a business name:
File a DBA or "doing business as" certificate. This costs $100 and you can mail in the application to the Wyoming Secretary of State. A DBA will allow you to do business under a name that might not be your legal business name. Say your legal name is Gale Turner, but you're thinking of marketing your photography business as "Gale's Snapshots." A DBA will give you the legal authority to do so.
Apply for formation paperwork.
Plan Your Business
Wyoming doesn't require a formal business plan, but it's still a must-do on our list for any aspiring entrepreneur. You might think you have everything planned out in your head, but documenting your ideas in a written business plan will provide a world of benefits.
A business plan will:
Show you're serious about your business
Set guidelines on how you run things
Aid in making critical decisions about growth, money, and operations
Help you better understand your competition and customers
The most common business structures for small businesses are:
Sole Proprietorship: This is the most common and "default" business structure adopted by small businesses. In this structure, there is no difference between the person and the business. Sole proprietorships aren't legal entities, and one's personal assets are open to business costs and liabilities. Earnings from a sole proprietorship are reported on the individual's personal tax income.
General Partnership: Applicable when there are two or more partners running a business. It is taxed as a pass-through entity, and there is no distinction between the partners and the business.
Limited Liability Company (LLC): A legal business entity that creates a separation between the business and owner, thereby protecting personal assets. LLCs can opt to be taxed as pass-through entities or an S Corp.
Corporation (Corp): A legal business structure where shareholders are "owners" of a business. Owners' personal assets are protected from business liabilities and ligation. Corporations in Wyoming don't have to pay a corporate income tax but are subject to a 21% federal corporate tax.
The cost of licenses and permits varies by county, business type, and size.
Wyoming also requires a sales tax license for businesses engaged in selling goods or services. You can file for this online via Wyoming's Internet Filing System. More detailed information on sales taxes can be found on the Department of Revenue page.
One of the best habits to develop for any business, as recommended by the SBA (Small Business Administration), is keeping your books clean.
To do this, consider opening a dedicated business bank account. You can even invest in accounting software to help track your money flow.
You can opt to apply for an Employer Identification Number (EIN) with the IRS. This 9-digit number is essentially a Social Security number for your business. An EIN is required if your business is subjected to excise taxes and/or you foresee yourself hiring in the future. However, many small business owners apply for one while starting because it makes it easier to require loans and get a dedicated business banking account.
Thankfully, maintaining your business's good standing in Wyoming is simple.
Wyoming requires all LLCs and Corps to file an annual report, known as the Annual Report License Tax, which costs a minimum of $60 ($2 processing charge if filed online). The annual report is due on the first day of your anniversary month. So, if you form your business on February 20, 2023, your annual report would be due on February 1, 2024.
Your business is also obligated to pay all the applicable taxes, which could include federal income tax, sales tax, employment tax, and/or payroll tax.
You'll need to make sure all your licenses, permits, and insurance policies are up-to-date. To make things easier, set aside a fixed date or two on your calendar when you can ensure all the paperwork is in place to keep your business running lawfully.
If there is any change to your business address, you'll need to update the official records by completing an update form. Forms for other changes, like trade name renewal or Registered Agent information, are available on the Maintaining Your Business page.
Wyoming + Small Businesses: The Perfect Match
As a budding new business owner, you're likely to seek a thriving and supportive business environment. Here's what Wyoming offers and why becoming a part of this state's 72,000+ small business economy offers you the best chance of long-term entrepreneurial success.
The Tax Foundation’s 2023 State Business Tax Climate Index rates Wyoming as the #1 most tax-friendly state. Wyoming has one of the lowest tax burdens in the U.S.
Type of Tax
Does Wyoming Levy the Tax? (Yes/No)
Personal Income Tax
Corporate State Income Tax
Value Added Tax
Wyoming also has one of the lowest state sales tax rates of 4%.
This ensures that you, as a business owner, have the opportunity to take back a significant portion of your earnings.
Low Operating Costs
Wyoming charges a $100 filing fee for LLCs and Corps. These fees are on the lower side compared to states like Massachusetts and Nevada, which have business entity filing fees of $500 and $425, respectively.
According to MERIC, Wyoming not only has one of the lowest costs of living among all the Rocky Mountain states, but it's also one of the most affordable states in the U.S. The state's commercial electricity rates are 99 cents below the national average. Lower expenses can lead to higher profits.
Wyoming only requires LLCs, corps, nonprofits, and partnerships to file an annual report to keep their "active" status with the state. Unlike other states, LLCs or corps aren't required to submit their financial statements for annual audits.
Lastly, Wyoming doesn't have residency restrictions on who can serve as a director or how many directors are required for a corp, offering you more control and flexibility over your business.
Wyoming has 16 growing industries, ranging from mining and motion picture recording to computer and electronic manufacturing. Some of the other industries that are on the upward climb include:
Mining and supporting activities
Fabricated metal manufacturing
Professional and technical services
Waste management, remediation services
Securities and commodities investment
How Much Does It Cost to Start a Business in Wyoming?
At the very minimum, you can expect to shell out $100 to start a business in Wyoming. This is how much it costs to register a business in the state.
If you decide to reserve a business name before filing your formation paperwork, set aside another $60.
Other startup business costs to consider are licenses and permits, insurance, office expenses, technology costs (website and software), and marketing and promotion. These costs can vary per business type.
What Is Required to Start a Business in Wyoming?
To start a formal business in Wyoming, you need to file the appropriate paperwork and register with the Secretary of State. Sole proprietorships and general partnerships are not required to do so.
Here are the requirements for the following legal entities:
Formation paperwork typically requires you to provide the following details:
Name and address of the business
Purpose of the business
Registered Agent information
Name and contact information of owners/members
Shareholder details (if you plan to incorporate)
Start a Business in Wyoming with Incfile
If you're seeking a growing entrepreneurial culture with a low cost of doing business, Wyoming might just be your ticket, especially given the state's low tax burden.
Forming your business with Incfile's Silver Package means you'll only have to pay state fees, and you'll even be offered Registered Agent services for free for the first year. Let us help turn your Wyoming business dreams into a reality.
Swara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters.