Wyoming vs Texas for LLC

Quick Answer

Wyoming is generally the better choice for most LLCs due to its lower formation fee ($100 vs $300), no franchise tax, and stronger privacy protections. Texas becomes more attractive for businesses generating over $2.47 million in revenue, where its franchise tax threshold provides an advantage over Wyoming’s annual fee structure.

Form your entity in state online — starts at $0 + state fee

Learn More →

Side-by-Side Comparison

Feature	Wyoming	Texas
Formation Fee	$100	$300
Annual Fee	$60 (Annual Report)	$0 (Franchise Tax Report only if revenue > $2.47M)
Processing Time	1-2 business days	5-7 business days (online), 2-3 days (expedited)
State Income Tax	None	None
Franchise Tax	None	Yes (above $2.47M revenue threshold)
Registered Agent Required	Yes	Yes
Operating Agreement Required	No	No
Publication Required	No	No
Privacy Protection	Strong (no member disclosure)	Standard
Asset Protection	Strong (Charging Order protection)	Standard

Data as of April 13, 2026

Formation Costs

Wyoming offers significantly lower upfront costs for LLC formation. The state filing fee is just $100, making it one of the most affordable states for business formation. Processing is also faster at 1-2 business days, allowing you to get your LLC up and running quickly.

Texas charges a $300 formation fee, three times higher than Wyoming’s fee. While Texas offers online filing with processing times of 5-7 business days, expedited processing (2-3 days) is available for an additional fee. The higher formation cost reflects Texas’s larger administrative infrastructure and more complex regulatory environment.

Both states require a registered agent, which adds to your formation costs if you hire a service. Neither state requires publication of your LLC formation in newspapers, unlike states such as New York or Arizona, which keeps your initial costs lower.

Ongoing Costs

The ongoing cost comparison heavily favors Wyoming for smaller businesses but shifts for larger enterprises. Wyoming requires an annual report with a $60 fee, creating predictable ongoing costs regardless of your business revenue or profitability.

Texas takes a different approach with its Franchise Tax Report. LLCs with revenue below $2.47 million pay no annual fees to the state. This threshold, known as the “no tax due threshold,” means most small to medium-sized businesses operate without ongoing state fees. However, once your revenue exceeds $2.47 million, Texas’s franchise tax can become substantial, calculated on either total revenue or gross receipts.

For businesses projecting consistent revenue below the Texas threshold, the state offers lower long-term costs. Businesses with fluctuating revenue or those expecting to exceed the threshold should factor Wyoming’s predictable $60 annual fee into their planning.

Tax Comparison

Both states offer favorable tax environments with no state income tax, making them attractive for business formation. However, their approaches to business taxation differ significantly.

Wyoming imposes no franchise tax, creating a straightforward tax environment. The state’s 4.0% base sales tax rate is lower than Texas’s 6.25% base rate, though local jurisdictions in both states can add additional sales tax.

Texas’s franchise tax system creates a more complex calculation. While LLCs below the $2.47 million revenue threshold pay nothing, those above face franchise tax calculations based on either total revenue or gross receipts, whichever results in a lower tax burden. This can create significant tax obligations for larger businesses but provides relief for smaller operations.

The tax comparison favors Wyoming for businesses of all sizes due to its simplicity and lack of franchise tax. Texas becomes competitive only for businesses consistently operating just below the franchise tax threshold.

Privacy Protections

Wyoming provides superior privacy protections for LLC members. The state does not require disclosure of member names or addresses in public filings, allowing business owners to maintain anonymity. This privacy protection extends to the ongoing annual reports, where member information remains confidential.

Texas follows standard disclosure requirements, meaning LLC member information may be part of the public record. While not as extensive as some states’ requirements, Texas provides less privacy protection than Wyoming’s comprehensive anonymity provisions.

For business owners prioritizing privacy—whether for personal security, competitive reasons, or general preference—Wyoming’s privacy protections represent a significant advantage over Texas’s standard disclosure requirements.

Legal Protections

Wyoming offers stronger legal protections, particularly regarding asset protection. The state’s LLC statute includes robust charging order protections, which limit creditors’ ability to reach LLC assets to satisfy personal debts of members. This protection makes Wyoming LLCs attractive for asset protection planning.

Texas provides standard LLC protections available in most states. While adequate for typical business operations, Texas’s legal framework doesn’t offer the enhanced asset protection features found in Wyoming’s more protective statutes.

Wyoming’s legal advantages extend beyond asset protection to include flexible operating agreement provisions and member-friendly default rules. These features make Wyoming particularly attractive for businesses with complex ownership structures or those prioritizing legal protections.

Which State Should You Choose?

Choose Wyoming if you prioritize:

Lower formation costs ($100 vs $300)
Privacy protection and member anonymity
Strong asset protection features
Predictable ongoing costs ($60 annually)
No franchise tax regardless of revenue

Choose Texas if:

Your business will consistently generate under $2.47 million in revenue
You prefer operating in a larger, more established business environment
You need extensive local banking and professional service relationships
You’re comfortable with higher formation costs for potential long-term savings

For most small to medium-sized businesses, Wyoming’s combination of low costs, privacy protections, and tax advantages makes it the superior choice. Texas becomes attractive primarily for businesses that can confidently project revenue below the franchise tax threshold and value operating within Texas’s larger economic ecosystem.

FAQ

Which state is cheaper for LLC formation?

Wyoming is significantly cheaper with a $100 formation fee compared to Texas’s $300 fee. Wyoming also processes filings faster at 1-2 business days versus Texas’s 5-7 business days for standard processing.

Do I have to live in Wyoming or Texas to form an LLC there?

No, you can form an LLC in either state regardless of where you live or operate your business. However, you’ll need a registered agent with an address in the state of formation and may need to register as a foreign LLC in your home state.

Which state has better tax advantages?

Both states have no income tax, but Wyoming has no franchise tax at any revenue level. Texas has no franchise tax below $2.47 million in revenue but imposes franchise tax above that threshold. Wyoming also has a lower base sales tax rate (4.0% vs 6.25%).

Can I maintain privacy with my LLC in both states?

Wyoming offers superior privacy protection by not requiring member names in public filings. Texas follows standard disclosure requirements, making member information potentially part of the public record.

What ongoing requirements do these states have?

Wyoming requires an annual report with a $60 fee. Texas requires a Franchise Tax Report but charges no fee unless your revenue exceeds $2.47 million. Both states require maintaining a registered agent.

Which state offers better asset protection?

Wyoming provides stronger asset protection through enhanced charging order protections that limit creditors’ ability to reach LLC assets for members’ personal debts. Texas offers standard LLC protections available in most states.

How do I decide between Wyoming and Texas?

Consider Wyoming for lower costs, privacy, and asset protection. Consider Texas if your revenue will consistently stay below $2.47 million and you prefer operating in a larger business environment. Most small businesses benefit more from Wyoming’s advantages.

This information is for educational purposes only and should not be considered legal or tax advice. Consult with an attorney or accountant for guidance specific to your situation. Data current as of April 13, 2026.