New data reveals that Wyoming has overtaken Delaware in corporate registrations per capita, solidifying its reputation as a prime destination for financial secrecy in the US, ICIJ reports.
A report from corporate data firm OpenCorporates, shared with the International Consortium of Investigative Journalists (ICIJ), shows a 30% surge in new incorporations in Wyoming in 2023, while Delaware’s growth slowed.
Wyoming’s rise as a corporate secrecy hub is attributed to its business-friendly laws, which permit anonymous limited liability companies (LLCs) and opaque trust structures known as the “Cowboy Cocktail.” This arrangement allows an LLC to act as the trustee of another LLC, creating layers of anonymity and making it difficult to trace ownership.
The dramatic increase in company registrations has raised concerns among Wyoming officials about potential misuse by bad actors. Chuck Gray, Wyoming’s Secretary of State, emphasized the need for legislative reform to prevent fraud and abuse, particularly by foreign entities. He noted that three draft bills aimed at tightening oversight could be addressed in the next legislative session.
“Critical legislative action is needed to add teeth to our enforcement procedures,” Gray stated.
For years, Wyoming has marketed itself as a destination for those seeking privacy. Unlike other states, it collects no information about the ownership of registered companies. A 2021 investigation by ICIJ, part of the Pandora Papers, uncovered numerous ultrawealthy individuals—including a Russian billionaire and an associate of a Dominican dictator—who established trusts in Wyoming to shield their assets.
Gary Kalman, director of the US office of Transparency International, criticized the state’s promotion of secrecy.
“Secrecy is a national problem,” he warned.
Kalman noted the risks posed by Wyoming’s lax regulations.
The Corporate Transparency Act, passed in 2021, mandates that most US companies disclose ownership information to the Treasury Department. However, access to this data is limited to law enforcement and certain financial institutions, which some argue may not be sufficient to address concerns about financial transparency.
Despite Wyoming’s unique prominence, Kalman stressed that anonymous company registration remains a national issue, highlighting the broader need for reform across the US.
Wyoming’s revenue from corporate filings climbed to $42 million in 2023.
