Wyoming vs. New Mexico LLC: How to Choose the Right State

Wyoming and New Mexico are the two most commonly recommended states for privacy-focused LLC formation. They both keep member names off public filings. But they have meaningful differences — and the choice depends on what you're building.

The Quick Answer

Operating company (your actual business): Wyoming Holding company (owns other entities or assets): New Mexico Both together: The standard domestic privacy stack

If you only need one entity, Wyoming is the default. If you're building a multi-layer structure, New Mexico handles the holding layer at lower cost.

Side-by-Side Comparison

Feature	Wyoming	New Mexico
Member names on public filing	No	No
Annual report required	Yes ($52+)	No
Formation fee	$100	$50
Charging order protection	Strongest in US	Moderate
State income tax	None	None (for most structures)
Case law depth	Extensive (50+ years)	Less developed
Banking familiarity	High	Lower
Series LLC available	Yes	No
Best use	Operating companies	Holding companies

Wyoming: What It Does Best

Wyoming created the American LLC in 1977. Five decades of case law means predictable legal outcomes. When a Wyoming LLC's operating agreement says something, courts have seen similar language hundreds of times.

Charging order protection is Wyoming's signature strength. Under Wyoming law, if a creditor wins a judgment against an LLC member (you), the most they can do is get a "charging order" — the right to receive distributions if and when the LLC makes them. The creditor cannot:

Seize LLC assets
Force the LLC to make distributions
Vote on LLC matters or force a buyout
Take control of the LLC

This is the strongest charging order protection available in any US state. For an operating business that faces client disputes, contractor issues, or other litigation risk, Wyoming's protection is material.

Annual report: Wyoming requires an annual filing, due on the first day of the anniversary month. The fee is $52 minimum (scales based on assets in Wyoming). Missing this filing doesn't immediately dissolve the LLC, but creates delinquent status.

Banking: Wyoming LLCs are well-understood by banks. Business bankers have seen thousands of them. Opening an account is straightforward.

New Mexico: What It Does Best

New Mexico's advantage is pure efficiency for passive entities.

No annual report. This is the defining feature. A New Mexico LLC filed once and maintained (just a registered agent renewal) has no recurring state obligations. Over 10 years, this saves multiple filings and fees compared to Wyoming.

Lower formation cost. $50 vs. $100 in Wyoming — a minor difference, but for holding companies you may have several of, it adds up.

Privacy equivalent. New Mexico doesn't require member names on public filings, same as Wyoming. The privacy output at the state level is identical.

Where it falls short: New Mexico has weaker asset protection than Wyoming. The charging order statute is less developed, and case law is thinner. For an operating company taking on real business risk, this matters. For a passive holding entity that just owns other LLCs, it doesn't — the assets are one step removed anyway.

Banking: New Mexico LLCs are less familiar to many bank compliance officers. Opening accounts for a New Mexico LLC can require more explanation than Wyoming. For a holding company that rarely needs its own bank account, this is less of an issue.

When to Use Wyoming Only

You have one operating business and don't need a holding layer
Your budget is limited and one entity is enough
You want maximum asset protection in a single entity
You're doing real estate investment in Wyoming or surrounding states

When to Use New Mexico Only

You need a pure holding entity with zero ongoing state maintenance
You want to hold other LLCs or assets with no annual filing
You're comfortable with the lighter asset protection (acceptable for passive holders)
You're managing costs across multiple entities

When to Use Both

The NM + WY combination is the standard domestic privacy stack for most operators who need layers:

New Mexico LLC sits at the top — owns everything, your name one more step removed. Wyoming LLC sits below — runs the business, has strong protection, is the public-facing entity.

You
 └── NM Holding LLC (private, no annual report)
      └── WY Operating LLC (strong protection, runs business)
           └── Clients, contracts, bank accounts

This structure:

Keeps your name off two states' public records
Provides Wyoming's charging order protection at the operating level
Minimizes ongoing state maintenance (NM has none; WY has one annual report)
Creates two layers someone must pierce to connect you to the operating business

What About Delaware and Nevada?

Delaware and Nevada are sometimes recommended for privacy. For most people, they're the wrong choice:

Delaware: Strong corporate law, excellent for venture-backed companies, but requires a franchise tax and annual fee. No meaningful privacy advantage over Wyoming. Better for corporations than LLCs.

Nevada: Marketed aggressively for asset protection, but requires a registered agent in Nevada, has higher fees, and Wyoming has matching or better protection at lower cost. Nevada's privacy advantages don't exceed Wyoming's.

For most private LLC formation purposes, Wyoming and New Mexico are the correct answer. Delaware and Nevada add cost without adding meaningful benefit.

The Decision Framework

Answer these questions:

1. Is this an operating business (clients, contracts, revenue) or a passive holder?

Operating: Wyoming
Passive holder: New Mexico

2. How important is the strongest possible asset protection?

Critical (high-liability business): Wyoming
Moderate (holding layer): New Mexico is fine

3. Do you need regular bank accounts for this entity?

Yes, business banking: Wyoming (more familiar to banks)
No/minimal banking: New Mexico works fine

4. How many entities are you building?

One: Wyoming
Two (holding + operating): NM for holding, WY for operating
Multiple: NM for the top-level holding layer, WY for each operating entity

Summary

Wyoming: Operating companies, highest asset protection, well-known to banks, annual report required
New Mexico: Holding companies, no annual report, lower cost, adequate for passive entities
Both together: The standard two-layer privacy stack, best combination for most operators
Delaware/Nevada: Usually unnecessary complexity for LLCs; stick to WY and NM