The US state of Wyoming is known for having a business-formation climate suitable for those seeking to maintain privacy in business operations. The state's business and trust formation laws have been given the moniker the "cowboy cocktail" by wealth managers.

Wyoming does not require ownership information to be listed on Limited Liability Company (LLC) filings paperwork. Instead, out-of-state business owners are required to hire a registered agent within the state whose address would be listed on paperwork in their place. Unlike most states, Wyoming allows trusts, which are used to protect assets, to be controlled by a private company, including LLCs. Wyoming has quickly become one of the leading states for new LLC filings.

These laws have been the subject of criticism by journalists and local officials for their appeal to foreign adversaries, oligarchs, and those looking to commit fraud. Entities registered in Wyoming have been subject to investigations into illegal activities such as scams, hacking, and money laundering. Incidents of fraud and abuse have been the subject of investigations by the FBI, as well as by journalists at the Washington Post and the International Consortium of Investigative Journalists (ICIJ).

In 2023, the secretary of state's office reported having processed 590,000 business filings within that fiscal year. State and Federal legislatures have passed laws in order to make the formation of fraudulent companies more difficult. In 2021, the Corporate Transparency Act was passed by Congress in an effort to require small businesses to disclose beneficial ownership information.

In Wyoming, a bill that enables the state to more easily dissolve companies formed by foreign adversaries was signed into law on February 24, 2025. Additional bills have been introduced to limit shell companies and dissolve companies that give false information on state formation documents. None of the bills introduced to the state legislatures have included language that requires the disclosure of business-owner information as of March 2025. Supporters of Wyoming's current laws have argued that increased regulation could cause law-abiding businesses to look to form elsewhere, or that innocent business owners may be harassed based on partisanship.

Background

LLCs

Wyoming was the first U.S. state to enable the formation of Limited Liability Companies (LLCs) in 1977. The Internal Revenue Service (IRS) disputed the formation until 1988, when they agreed to allow LLCs to determine how they are taxed, either as a corporation or a partnership. The business formation category was eventually adopted by all US states. LLCs give the limited liability of owners similar to that of a corporation, as well as the lower tax obligations of a limited partnership. The US Treasury Department has stated that LLCs are uniquely vulnerable to being used as shell companies due to the protections offered to business owners.

In 2009, the state discovered 5,700 companies registered using post office boxes. The laws were changed soon after to require registered agents to have a physical presence in the state. In 2010, Wyoming enacted the Wyoming Limited Liability Company Act, which brought enhanced privacy protections for LLC members and managers. This new legislation replaced the Original LLC Act with provisions allowing increased flexibility in operating agreements and increased privacy regarding member and manager information.

Trusts

Wyoming's trust-formation laws have made the state a leading jurisdiction for establishing trusts, as they emphasize asset protection and a high degree of privacy, allowing for the shielding of assets. The state was ranked in the top 10 least-restrictive trust jurisdictions in the world, according to a study conducted in 2020 by Adam Hofri-Winogradow at the Hebrew University of Jerusalem.

Wyoming adopted the Uniform Trust Code (UTC) in 2003, which updated the state's trust laws and intended to offer clear guidance in the event of legal inquiries. The Economically Needed Diversity Options for Wyoming (ENDOW) Executive Council was created in 2017. The council released a 20-Year Economic Diversification Strategy in 2018 to highlight the importance of financial infrastructure development to support new developing industries.

In Wyoming, trustees have ways to adapt to beneficiaries' changing needs, such as decanting, where trustees can adjust trust terms without relying on the original trust document. Wyoming's decanting law is broad, giving trustees flexibility to distribute trust assets to benefit beneficiaries based on the trust's terms. This law is unique in allowing trustees with limited powers to make changes.

Wyoming was the first state to establish digital assets, like cryptocurrency and NFTs, as intangible property under Article 9 of the Uniform Commercial Code (UCC), putting them under the same protections as other assets.

In Wyoming, a trust can be controlled by an LLC rather than a named person, otherwise known as a private trust company. Wyoming also allows unregulated private trust companies, which are not subject to state supervision and oversight.

Wyoming is one of only a handful of states that allow silent trusts, where the existence of the trust is kept secret until a later date, such as when a beneficiary reaches a certain age. It is also one of few states that allows for self-settled asset protection trusts, which are often favored when the settlor or beneficiary wants to receive distributions and act as an investment advisor.

Similar to Florida and Texas, Wyoming has no individual or corporate state income tax. It also has no capital gains tax, no gift tax, and no estate tax, giving it one of the lowest overall tax burdens in the U.S. Wyoming's trusts are taxed the same as other business entities in the state. When a trust is set up as an LLC, profit distributes to LLC members and is taxed as any other LLC.

Registered Agents

A registered agent acts as a contact entity on behalf of the companies it represents and is legally required when forming an LLC or corporation. A registered agent with a physical address within the state must be included on formation documents for out-of-state businesses so that the business owners can be contacted in the event of a lawsuit.

A registered agent becomes a commercial registered agent once it represents more than 10 businesses within the state. As of 2020, there were an estimated 450 commercial registered agents operating within the state of Wyoming. Commercial registered agents are required to keep the names and addresses of LLC managers, members, or directors. The registered agent gets listed on formation documents, allowing the identity of the LLCs owner to be kept private.

These agents also often provide general corporate services, such as filing incorporation documents and annual reports. Most often, registered agents have no further information or knowledge into the companies' operations.

Cowboy Cocktail The combination of Wyoming's low tax burdens, and the layering of LLCs and trusts to obscure the identities of business owners and trustees, is referred to as the "Cowboy Cocktail". Compared to other states with similar protections like Alaska and Texas, Wyoming's business registration rate is growing at a much faster rate than its population. According to Allison Tait, a law professor at University of Richmond, "Wyoming is advertising itself as the new onshore-offshore." As of 2021, Wyoming's trust companies managed approximately $31.5 billion in assets, according to ICIJ.

In 2015, Wyoming had approximately 128,000 businesses active in the state. In 2023, the Secretary of State's office reported having processed 590,000 business filings within that fiscal year alone. Wyoming had 378 new businesses incorporated per 1,000 adults compared to the national average of 36 per 1,000 adults. That same year, Wyoming became the top state for new business registrations, surpassing Delaware.

According to Business Insider, Wyoming's business growth indicates that the business sector is beginning to migrate to the West, seeking out more affordable options for their business ventures. The state of Montana has seen similar growth to Wyoming in recent years, and both joined Delaware as having the most new businesses start up per-capita during the first half of 2024. Combining their own research and Census Bureau data, Business Insider reported that, as of June 2024, Wyoming saw 289 new businesses per 100,000 people since the beginning of the year, compared to Delaware which had 153, and Montana, 106.

For fiscal year 2023, Wyoming received approximately $42 million in revenue from filing fees, an increase of approximately 25% from the year prior, according to SVI News and local media outlet the Cowboy State Daily. The majority of businesses being created were LLCs, the subsequent majority of which have under $300,000 in assets within the state.

Reported misuses and inquiries

2010s In 2011, Reuters reported on a property in Cheyenne that it dubbed "a little Cayman Island on the Great Plains." The property, located at 2710 Thomas Avenue, was Wyoming Corporate Services, a business-formation firm used to register alleged shell companies. Included in the businesses formed using the address was a shell company shielding real-estate assets belonging to an imprisoned former prime minister of Ukraine.

In 2016, Igor Makarov, a Russian billionaire, formed a trust in Wyoming which in turn held three companies that were registered in the British Virgin Islands. One owned a private jet according to reporting by ICIJ. Following the 2022 invasion of Ukraine, Marakov was sanctioned by several countries, excluding the United States. The existence of the trust was revealed in a leak of financial records known as the Pandora Papers.

2020 During the COVID-19 shutdowns of 2020, a Wyoming-registered firm called the Alo Group received $531,562 in payroll support through the Paycheck Protection Program (PPP) for 36 US-based employees the firmed claimed to have. No public profile for the company was found. The company had registered through Registered Agents Inc, based out of Sheridan, Wyoming. After relief funds were distributed, Alo Group changed their registered address to one in China then later dissolved after failing to file state paperwork.

2022 In March 2022, The Washington Post and ICIJ launched an investigation into activities related to registered agents and businesses registered in Wyoming. They found a single registered agent operating out of their home had serviced approximately 350 companies, including some with ties to individuals such as a Ukrainian businessman alleged to have stolen billions from a bank in Ukraine, a former lawyer convicted of "pimping" through a massage parlor in California, and someone who served time in New York for investment fraud.

In May 2022, St. Luke's Health System in Idaho filed a defamation lawsuit against Ammon Bundy and one of his associates, alleging they spread misinformation online for personal gain. Ammon Bundy is mostly known for his involvement in the 2016 occupation of the Malheur National Wildlife Refuge in Oregon. St. Luke's attorney claimed that Bundy set up shell corporations in Wyoming and transferred assets into them to potentially avoid paying damages. Someone associated with Bundy's gubernatorial campaign established Wyoming LLCs, including White Barn Enterprises LLC, Farmhouse Holdings LLC, and Potters Construction FHB LLC, on July 20, 2022. St. Luke's raised concerns about asset transfers to these Wyoming LLCs, citing potential fraudulent conveyances.

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