New Mexico has a reputation as the cheapest US state to keep an LLC alive — no annual report, no franchise tax, a one-time $50 filing fee — and that reputation is mostly deserved. But "cheapest to maintain" and "best for a non-US founder" are not the same question, and the gap between them is where most people forming from abroad get it wrong. This is an honest, numbers-first comparison of a New Mexico LLC against a Wyoming LLC for someone who lives outside the United States, has no US office, no US employees, and no US storefront — the typical Mercury-and-Stripe founder. Every fee, tax rate, and threshold below is checked against 2026 figures from the agencies that actually set them.
Why Wyoming wins for non-residents
For the founder who has no physical footprint in the US, the decision rarely comes down to the $10 difference in a filing fee. It comes down to three things that follow you for years: asset protection, banking acceptance, and the boring reliability of the ongoing compliance.
Asset protection. Wyoming's LLC statute makes the charging order the exclusive remedy a creditor can use against a member's interest — including for single-member LLCs (Wyo. Stat. § 17-29-503). In plain terms, a creditor who wins a judgment against you personally cannot seize the LLC or force a sale of its assets; they can only attach distributions if and when you choose to make them. New Mexico's LLC Act also provides a charging order, but it does not carry the same "sole remedy" language or the body of Wyoming-specific case law that attorneys lean on when they structure holding companies. For a founder holding intellectual property, a SaaS product, or an e-commerce brand inside the entity, that distinction is the entire point of the wrapper.
Banking. This is the quiet decider. US neobanks that actually onboard non-resident-owned LLCs — Mercury, Relay, and money-service providers like Wise and Payoneer — have processed Wyoming LLCs for years and treat them as a known quantity. New Mexico's privacy-by-default structure (covered below) is genuinely good for you, but it occasionally triggers extra "who actually owns this?" questions during compliance review, because the public record shows only an organizer and a registered agent. You will still get banked with a New Mexico LLC, but Wyoming is the path of least friction, and friction at the banking stage can cost you weeks.
Compliance you can predict. Wyoming's annual report is a flat $60 minimum (a "license tax" of the greater of $60 or $0.0002 per dollar of in-state assets, per the Wyoming Secretary of State). It is one filing, once a year, in your formation-anniversary month. There is no state income tax, no franchise tax, and no gross receipts tax on a company with no Wyoming activity. The cost is small, fixed, and impossible to be surprised by — which, when you are managing this from another continent, is worth more than saving $60.
None of this means New Mexico is a bad choice. It means Wyoming's edge is in the parts of the decision that compound over five years, not the sticker price in month one.
When New Mexico genuinely wins
Honesty requires conceding the cases where New Mexico is the better call — and there are real ones.
You want the lowest possible standing cost, full stop. New Mexico does not require an annual report from LLCs. None. It is one of the very few states with no annual or biennial report obligation for LLCs (New Mexico Secretary of State, Business Services). Combined with no LLC franchise tax and no minimum entity tax, the recurring state cost of a New Mexico LLC is literally $0 after formation. Wyoming's $60 is trivial, but "trivial" is not "zero," and if you plan to hold a dormant entity for years without activity, New Mexico's zero is the cleaner number.
You are a privacy purist. New Mexico does not require member or manager names on the Articles of Organization. The public record shows the organizer and the registered agent — not the owners. If a formation service signs as organizer and you use a commercial registered agent, your name appears nowhere in the state's public database. Wyoming also keeps members off the public record, so the two are close here, but New Mexico is often cited as the stronger "anonymous LLC" jurisdiction because even the organizer slot can be a third party with no member disclosure required at all.
You are holding a single passive asset and will never litigate. If the LLC exists only to hold a domain portfolio, a single rental nobody will sue over, or a dormant brand, the asset-protection and banking advantages of Wyoming matter less, and New Mexico's zero-maintenance model is a clean fit.
The honest caveat: New Mexico's "wins" are about cost and anonymity, not about protection or operational ease. If your LLC is an active, revenue-generating, bank-account-holding business, the year-one savings are rounding errors against the things Wyoming does better. Pick New Mexico when the entity is lean, passive, and private — not when it is the operating heart of your company.
Real 5-year total-cost projection
This is where the marketing math usually misleads people. The claim "New Mexico is the cheapest state" is true for the state-level entity fees — but it quietly ignores that an LLC's tax bill is driven by where the income is earned and who earns it, not by which state issued the certificate. For a non-resident with no US presence, the state of formation generates essentially the same tax outcome in either state, because neither Wyoming nor New Mexico can tax income that has no nexus to the state.
The table below isolates the state-level costs that actually differ, across five revenue scenarios. The critical, frequently-misrepresented point: New Mexico's headline taxes (5.9% income tax, 4.875%+ gross receipts tax) only apply to income sourced to New Mexico. A non-resident with customers outside New Mexico and no NM nexus owes neither. So the "New Mexico tax scales while Wyoming stays flat" fear is, for a genuine non-resident, mostly a myth — unless you actually sell into New Mexico or have NM-based operations, at which point the GRT and income tax bite hard. The table shows both the non-resident reality and the trap.
| Annual revenue → | $0 (dormant) | $50,000 | $100,000 | $250,000 |
|---|---|---|---|---|
| WY — state filing fee (one-time) | included in $397 | included | included | included |
| WY — annual report (license tax) | $60 | $60 | $60 | $60 (assets <$300K) |
| WY — state income tax | $0 | $0 | $0 | $0 |
| WY — franchise / gross receipts tax | $0 | $0 | $0 | $0 |
| WY 5-year state cost | ~$300 | ~$300 | ~$300 | ~$300 |
| NM — state filing fee (one-time) | $50 | $50 | $50 | $50 |
| NM — annual report | $0 (none) | $0 | $0 | $0 |
| NM — franchise tax | $0 | $0 | $0 | $0 |
| NM — income tax (no NM-sourced income) | $0 | $0 | $0 | $0 |
| NM — income tax (IF all income NM-sourced) | $0 | up to ~$2,360/yr | up to ~$4,720/yr | up to ~$13,750/yr |
| NM — gross receipts tax (IF selling into NM) | $0 | ~$3,500–$4,500/yr | ~$7,000–$9,000/yr | ~$17,500–$22,500/yr |
| NM 5-year state cost (true non-resident) | $50 | $50 | $50 | $50 |
| NM 5-year state cost (NM-sourced income trap) | $50 | $30,000+ | $60,000+ | $130,000+ |
Read the table carefully. For a real non-resident, New Mexico's pure state cost over five years is $50, versus roughly $300 for Wyoming — New Mexico genuinely is cheaper, by about $250 over five years. That is the honest headline. But the moment your activity has a New Mexico connection — an NM customer base, an NM contractor, NM-sourced services used in-state — New Mexico's income tax (graduated 1.5% to 5.9%, top rate on income over $210,000 per New Mexico Taxation & Revenue) and its gross receipts tax (state base 4.875% effective July 1, 2025–June 30, 2026, combined roughly 7%–9% with local add-ons, economic nexus at $100,000 of NM-sourced receipts) turn the "cheapest state" into a five-figure liability. Wyoming has no income tax, no franchise tax, and no gross receipts tax, so its column does not move regardless of where your customers are. Wyoming's value is not that it is cheaper — it is that it is flat and un-surprising. The $250 you save in New Mexico is real; the catastrophic downside if your sourcing assumptions are wrong is also real, and it only exists on the New Mexico side.
One correction to a number you may see elsewhere, including in older internal data: New Mexico's state filing fee is $50, not $347 — the higher figures floating around are formation-service bundle prices, not the state's charge. Wyoming's state fee in this comparison is included in WyomingLLC's flat $397 all-inclusive package (the state filing fee is built in; there is no separate state-fee surcharge). An ITIN, if you need one, is a separate $297 add-on in either case.
For non-residents specifically
State choice is the small decision. The federal layer is where non-residents actually win or lose, and it is identical in Wyoming and New Mexico — which is exactly why the state fee should not dominate your thinking.
Federal tax. A US LLC is, by default, a pass-through. A single-member LLC owned by a non-resident is a "disregarded entity." If you have no US office, no US employees, no dependent agent, and no US inventory — and your income is therefore not Effectively Connected Income to a US trade or business — you generally owe no US federal income tax on that income (IRS, "Effectively Connected Income (ECI)"). This is a federal determination; New Mexico vs Wyoming does not change it. If your home country has a tax treaty with the US (see the IRS list, "United States income tax treaties – A to Z"), the treaty can further limit US taxing rights. Whether you actually owe US tax is a function of what you do and where, not which state's certificate you hold.
Form 5472 — the one that bites. A foreign-owned single-member US LLC must file Form 5472 attached to a pro-forma Form 1120 every year, reporting "reportable transactions" with you, the foreign owner — including the capital you put in and the money you take out (IRS, Instructions for Form 5472, and Treas. Reg. §1.6038A-1). This is an information return, not a tax return; filing it does not mean you owe tax. But missing it, filing it late, or filing it incomplete carries a $25,000 penalty, with a further $25,000 for each 30-day period it stays unfiled after IRS notice. It cannot be e-filed; it is mailed or faxed to the dedicated IRS unit. This obligation is identical for a Wyoming LLC and a New Mexico LLC — and it is the single most expensive mistake a non-resident makes.
1099-K and the threshold myth. If you sell through US platforms, note the current federal 1099-K reporting threshold: more than $20,000 AND more than 200 transactions in a year. The widely-feared $600 rule was repealed by the One Big Beautiful Bill Act; it is not in effect. A 1099-K is a reporting form, not a tax bill, but knowing the real threshold prevents needless panic.
Privacy and asset protection, federally. Neither state lists members publicly, so your name stays off the state record in both. The federal Corporate Transparency Act / BOI reporting that once worried founders was narrowed by FinCEN's March 2025 interim final rule, which removed the reporting requirement for US-formed companies for most domestic entities — again, the same in both states. Where the two diverge is the strength of the charging-order protection if a creditor ever comes after you personally, and there Wyoming's sole-remedy statute and case law give it the edge.
Step-by-step: forming from abroad
The mechanics are nearly identical for both states; the order matters.
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Pick the state for the right reason. Decide on Wyoming (protection, banking, flat cost) or New Mexico (zero recurring cost, maximum anonymity, passive holding) based on the sections above — not on the $250 five-year difference alone.
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Appoint a registered agent in the state. You cannot use a foreign address. A commercial registered agent in Wyoming or New Mexico gives you a required in-state address and keeps your name off the public filing. With WyomingLLC's $397 package the Wyoming state filing fee and registered agent are included.
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File the formation document. Wyoming: Articles of Organization with the Wyoming Secretary of State. New Mexico: Articles of Organization with the New Mexico Secretary of State ($50). Have the formation service sign as organizer to preserve anonymity. Processing is typically a few business days.
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Adopt an operating agreement. This is an internal document, not filed with the state, and it is where ownership actually lives — especially important in New Mexico, where ownership is only documented here. Banks will ask for it.
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Get an EIN from the IRS. Without a US Social Security Number you cannot get the EIN online; you file Form SS-4 by fax or mail. Leave the SSN/ITIN line blank and write "Foreign" where prompted. This usually takes a few weeks by fax.
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Decide whether you need an ITIN. You generally do not need one just to run the LLC or to file Form 5472. You may need one for certain treaty claims or withholding situations. It is a separate process (and a separate $297 add-on if you have us handle it).
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Open the bank account. Mercury, Relay, Wise, or Payoneer. Have the EIN letter, Articles, and operating agreement ready. Expect identity verification on you personally as the beneficial owner.
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Calendar your federal filings. Form 5472 + pro-forma 1120 is due April 15 (extendable to October 15 with Form 7004). Put it on a recurring reminder the day the entity is formed.
Common mistakes
Treating the $250 saving as the whole decision. People form in New Mexico to save the price of one dinner over five years, then spend that and more on the banking friction or the lawyer who explains why a sole-remedy charging order would have helped. Optimize the big risks, not the small fee.
Assuming "no state income tax" means "no US tax." It means no state tax. Your federal position — ECI, Form 5472, possible withholding — is unchanged by the state and is where the real exposure sits. Many founders form the LLC, open the bank account, and never learn Form 5472 exists until the $25,000 letter arrives.
Believing New Mexico's headline taxes never apply. They apply the instant you have New Mexico-sourced income or cross the $100,000 gross-receipts nexus selling into the state. "Non-resident, no nexus" is a status you have to actually maintain, not a permanent shield.
Self-filing the EIN online with a fake or borrowed SSN. The online tool is closed to applicants without an SSN/ITIN. Use Form SS-4 by fax; shortcuts here get the EIN revoked.
Forgetting the registered agent renewal. In both states, a lapsed registered agent leads to administrative dissolution. New Mexico has no annual report to remind you — which is convenient until the silence makes you forget the entity needs an agent at all.
Sources: New Mexico Secretary of State (Business Services / Articles of Organization, $50 fee, no annual report); New Mexico Taxation & Revenue Department (Personal Income Tax Rates; Gross Receipts Tax rates and Corporate Income & Franchise Tax Overview); Wyoming Secretary of State (Annual Report license tax, $60 minimum / $0.0002 rule); IRS (Instructions for Form 5472 and Treas. Reg. §1.6038A-1; Effectively Connected Income (ECI); United States income tax treaties – A to Z); FinCEN (March 2025 interim final rule on BOI reporting). Figures verified for 2026.