Option 1: Form 8832 election
- Wyoming LLC remains a legal LLC under Wyoming law
- For federal tax, treated as C-Corp
- Files Form 1120 (full corporate return) annually
- Subject to 21% federal corporate tax
- Dividends to owner subject to 30% withholding (treaty may reduce)
- Locked in for 5 years
- Simpler than domestication but limited benefits for VC fundraising
Option 2: Domestication to Delaware C-Corp
- Full legal conversion from Wyoming LLC to Delaware C-Corp
- File Articles of Conversion in Wyoming AND Certificate of Incorporation in Delaware
- Often required for US VC rounds (VCs invest in Delaware C-Corps)
- Preserves EIN, formation history, banking relationships
- Costs $500 to $1,000+ in filing fees and attorney costs
- Tax implications: capital gains may apply to any appreciated assets
When to convert
- Raising US venture capital (VCs require Delaware C-Corp)
- Planning IPO or public-company conversion
- Multi-investor structure with preferred units that need true preferred stock treatment
- Specific tax planning around retained earnings
- For most non-residents not raising VC: keep the LLC structure