When setting up Terramatris, our crypto hedge fund, one of the earliest strategic decisions we faced was choosing the right jurisdiction for incorporation. After weighing options like the Cayman Islands, British Virgin Islands or Panama, we ultimately decided on Wyoming, USA. Here’s why.
Many hedge funds gravitate toward Caribbean jurisdictions because of their established offshore structures and global recognition. However, for Terramatris, Wyoming offered three key advantages:
- Speed and Ease of Incorporation – Setting up an LLC in Wyoming is straightforward and fast.
- Cost-Effectiveness – Incorporation and annual fees are lower compared to traditional offshore hubs.
- Strong Legal Framework – Wyoming has a robust corporate law system backed by U.S. credibility.
While Cayman or BVI entities remain popular for large-scale funds, Wyoming proved a better fit for our structure and current operational needs.
Taxation in Wyoming
Wyoming is widely regarded as one of the most tax-friendly states in the U.S. Key points:
- No state corporate income tax.
- Annual license tax: A minimal fee based on assets located within Wyoming (often negligible for non-U.S. operations).
- No franchise tax.
Because our founders are non-U.S. citizens and all activities are conducted outside the U.S., our LLC currently falls under 0% annual federal tax liability. Of course, this setup may not be suitable for everyone—especially U.S. residents or firms actively operating within the U.S.
Downsides of a U.S. LLC in the Crypto Industry
Although Wyoming offers significant advantages, there are limitations worth noting:
- Centralized exchanges’ restrictions: Many international crypto trading platforms (e.g., Deribit, Bybit) avoid onboarding U.S. companies or U.S. persons due to regulatory risks. Forming a Wyoming LLC won’t solve this hurdle.
- SEC considerations: As a hedge fund, we intentionally avoid U.S. investors to remain outside SEC registration requirements. Anyone considering Wyoming should understand the regulatory landscape carefully.
On the positive side, an LLC structure works well for:
- Trading through decentralized exchanges (DEXs).
- Consolidating personal crypto trading accounts under a legal entity.
- Preparing for future integration with compliant brokers (our next step is registration with Interactive Brokers to access crypto ETFs).
Our Incorporation Process
We used WyomingAgents.com for incorporation and registered agent services. The experience was seamless, and we highly recommend them.
In addition to the LLC itself, you’ll need an EIN (Employer Identification Number), which Wyoming Agents also helped us obtain. An EIN is essential for tax reporting and for opening financial accounts in the company’s name.
Of course, Wyoming is not the only state offering LLC structures, and many online firms provide incorporation packages. But for our needs, Wyoming stood out as the clear choice.
Key Takeaways
- Wyoming LLC is a low-cost, efficient structure for non-U.S. founders operating outside the U.S.
- Tax benefits are significant, though this model doesn’t fit everyone.
- Crypto exchange limitations remain, as many platforms exclude U.S. entities.
- For Terramatris, Wyoming strikes the right balance between legitimacy, flexibility, and cost-efficiency.
At Terramatris, we remain focused on building a professional, compliant crypto hedge fund structure. While we avoid U.S. investors to sidestep SEC complications, we are preparing to expand our operational capabilities through Interactive Brokers and regulated crypto ETF products.
Incorporating in Wyoming was a deliberate step in aligning our legal structure with our long-term vision. For other founders considering a similar path, the key is understanding not just the benefits, but also the trade-offs of each jurisdiction.