Germany
Wyoming
A German resident may own a Wyoming LLC. Nothing in Wyoming law or German law forbids it, and the state side is light: $100 to form, $60 a year, a registered agent.
The German side is where the plan is decided. Germany classifies the LLC itself, looks at where it is run, and expects you to report it. The US answer of 0% says nothing about any of that.
Private in Wyoming, declared in Germany
Wyoming's register shows no members and no managers for an LLC. That is the privacy the state is known for, and what it does and does not cover has its own page.
German law does not rely on the register. Section 138(2) of the Abgabenordnung puts the reporting duty on you, as a resident, and it covers the LLC whichever way Germany classifies it.
| What you hold | Reportable under section 138(2) AO |
|---|---|
| A business or permanent establishment abroad | Yes, on formation or acquisition (No. 1) |
| An interest in a foreign partnership | Yes, on acquisition, change or disposal (No. 2) |
| A stake in a foreign company | Yes, from 10% of capital, or above EUR 150,000 of total cost (No. 3) |
| Controlling influence over a non-EU, non-EFTA company | Yes, the first time you can exercise it (No. 4) |
- When: with your income tax return for the year, and no later than 14 months after that year ends.
- How: electronically, through the official interface, with the type of activity of the LLC.
- If you do not: a fine of up to EUR 25,000 under section 379(7) AO, where the conduct is intentional or reckless.
A sole owner of a Wyoming LLC meets at least one of these lines on the day the company is formed.
Step one, the Typenvergleich: Germany decides what the LLC is
The IRS treats a single-member LLC as a disregarded entity unless you elect otherwise. Germany does not follow that choice. It compares the LLC, as your operating agreement actually shapes it, with German company types.
The reference is a letter of the Federal Ministry of Finance dated 19 March 2004. It lists structural criteria, among them how management is organised, who is liable, whether interests transfer freely, how profit is allocated and how long the company lasts, and weighs them as a whole.
| Germany reads it as a corporation | Germany reads it as transparent | |
|---|---|---|
| Who earns the profit | The LLC | You, directly |
| When you are taxed | On the company's profit if it is German resident, then on distributions | Every year, distributed or not |
| Your rate | 25% flat on dividends, plus surcharge | Your personal rate, up to 45% |
| Match with the US view | Mismatch: the US sees you, Germany sees a company | Match |
The sources diverge on the usual outcome. Many guides state that a standard LLC is read as a corporation. German tax firms that handle these files describe the classification as case by case and a frequent subject of dispute with tax offices.
We could not read the ministry's letter on its own website on 5 October 2026, so this page does not pick one. Have your operating agreement classified before you rely on either column.
Step two: where the LLC is managed
Section 10 AO defines the place of management in one line: "Geschäftsleitung ist der Mittelpunkt der geschäftlichen Oberleitung", the centre of the top level direction of the business.
For a one-person company, that centre is wherever the one person takes the day to day decisions. A founder working from Leipzig manages the LLC from Leipzig. The Wyoming registered agent's address is a statutory address, not a place where anything is decided.
- If Germany reads the LLC as a corporation, section 1 of the Körperschaftsteuergesetz makes it fully liable in Germany once its management is there, on all of its income.
- The place of management is also a permanent establishment under section 12 AO, so trade tax follows.
- If Germany reads the LLC as transparent, the profit is simply yours, earned from Germany.
Either way the profit is taxed in Germany. Only the route differs.
- 11. How does Germany classify your LLC?Corporation or transparent, decided on the operating agreement, not on the US tax election
- 22. Transparent: the profit is yoursPersonal income tax up to 45%, plus trade tax if the activity is commercial and run from Germany
- 33. Corporation managed from GermanyGerman resident company: corporate tax, surcharge and trade tax, then tax on dividends
- 44. Corporation managed abroad in factThe AStG test applies: control, passive income and a tax burden below 15%
- 55. In every caseReport the holding under section 138 AO within 14 months of the year end
What a German-managed LLC pays
The figures below are statutory rates read on 5 October 2026. The trade tax line uses a municipal multiplier of 400% as an example, because each municipality sets its own.
| Layer | Rule | On EUR 100 of profit |
|---|---|---|
| Corporate income tax | 15%, section 23 KStG | 15.00 |
| Solidarity surcharge | 5.5% of that tax | 0.83 |
| Trade tax | 3.5% times the municipal multiplier | 14.00 |
| Company level total | 29.83 | |
| Dividend to you | 25% plus 5.5% surcharge on the EUR 70.17 left | 18.51 |
| Total once distributed | 48.34 |
Two of these numbers are scheduled to move.
- Corporate income tax falls to 14% for 2028, then one point a year to 10% from 2032.
- The minimum multiplier rises to 280% from the 2027 collection period, under a law of 29 June 2026. That puts a floor of 9.8% under trade tax everywhere.
- In the transparent case, an individual has a EUR 24,500 trade tax allowance and can credit four times the trade tax base amount against income tax.
The Außensteuergesetz, if management really is abroad
Germany's controlled foreign company rules sit in sections 7 to 13 of the Außensteuergesetz. Section 7 applies them to a foreign company with neither its management nor its seat in Germany.
So this regime is not the first risk for a founder who runs the LLC from home. It becomes the question once management is moved abroad in fact, for example to a manager who lives and decides in the United States.
| Test | What the statute says | A sole owner's Wyoming LLC |
|---|---|---|
| Control | More than half of votes, capital or profit, counting related persons | Met |
| Low taxation | A tax burden below 15% on the income concerned | Met when the LLC pays no US income tax |
| Passive income | Anything outside the active catalogue of section 8(1) | Depends on the activity |
The 15% line is recent. It applies to financial years of the foreign company ending after 31 December 2023. Some published guidance still gives 25%, which was the earlier figure.
Three provisions matter most to a small services or trading company.
- Services turn passive when you perform them. Under section 8(1) No. 5, service income is not active where the company uses a German-taxable shareholder, or a person close to them, to deliver the service.
- Trading has a similar rule. Under No. 4, trade is not active where the shareholder supplies the goods or takes them, unless the company runs its own commercial operation without the shareholder's involvement.
- The substance defence is closed to US companies. Section 8(2) lets a company prove real economic activity, and section 8(3) limits that to companies in the EU or the EEA.
Where all three tests are met, the profit is added to your income for the year in which the LLC's financial year ends, whether or not it was distributed.
- Rate: your personal income tax rate. Section 10(2) switches off the 25% flat rate and the partial income relief.
- Small amounts: passive income is ignored if it is no more than one third of the company's total income and no more than EUR 100,000. That version applies to financial years starting after 31 December 2025.
- Filing: a separate electronic return under section 18(3), on top of the section 138 report.
- Investment income: section 13 applies a stricter rule from a 10% holding where the income comes from cash, securities or similar assets.
The treaty does not rescue the structure
Germany and the United States have an income tax convention, signed in 1989 and amended by a protocol in 2006. It allocates taxing rights. It does not turn off the three tests above.
- Transparent entities: income earned through a fiscally transparent entity counts as a resident's income only to the extent that state taxes it as such.
- German CFC rules are reserved: the protocol states that nothing in the convention prevents Germany from applying parts 4, 5 and 7 of the Außensteuergesetz.
- Dual resident companies: the two tax authorities try to agree on one residence. If they cannot, the company gets no treaty benefits.
- Dividends: source tax is capped at 15%, or 5% for a company holding at least 10% of the voting stock.
Leaving Germany: the exit charge
The structure can work for someone who has genuinely left Germany. The departure itself is taxed first if Germany reads the LLC as a corporation.
- Who: an individual with at least 1% of a corporation, who was fully liable to German tax for at least seven of the last twelve years.
- What: ending German residence is treated as a sale of the shares at market value, under section 6 AStG.
- Payment: on application, in seven equal annual instalments without interest, as a rule against security.
- Return: the charge falls away if you come back within seven years and the conditions of section 6(3) are met.
Sequence the move before value builds up inside the company, not after.
The Wyoming and US side, in brief
None of the German analysis removes the American filings. They are covered in the guides of this series and summarised here only.
| Topic | In one line | Guide |
|---|---|---|
| Formation | $100 state fee, filed online, with a Wyoming registered agent | Forming the LLC from abroad |
| Yearly cost | $60 minimum annual report, plus agent and tax filing | Wyoming LLC cost |
| Federal filing | Form 5472 with a pro forma Form 1120, $25,000 penalty | Taxes for non-residents |
| Banking | Germany is on none of the country lists we read | Bank account for non-residents |
When it fits, and when it does not
| Your situation | Outcome on the German side |
|---|---|
| Freelancer in Germany, invoicing through the LLC | Taxed in Germany, as your own income or as a German resident company |
| Online seller running everything from Germany | Same result, plus trade tax through the place of management |
| Passive holding or investment LLC, managed abroad | AStG attribution at your personal rate |
| Real US team, office and decision makers | Legitimate, and the US then taxes the US business profit |
| You have left Germany for good | Workable, once the exit charge has been dealt with |
The bottom line
A Wyoming LLC gives a German resident a US company, US payment rails and a short state file. It does not give a tax result. That result comes from three German tests, and each one ends in German tax while you live and decide in Germany.
The sound order is German advice first, formation second. A Steuerberater who has read your operating agreement can tell you which column you are in before the company exists.
Once that is settled, the American side is the simple part. CorpSec handles the filing, the registered agent and the EIN: see the Wyoming company formation service.
Frequently asked questions
Can a German resident legally own a Wyoming LLC?
Yes. Wyoming sets no nationality or residence condition, and German law does not prohibit the holding. German law does require you to report it and to tax its profit under German rules.
Is a Wyoming LLC tax free for a German resident?
No. The 0% figure describes US federal tax on a company with no US business. In Germany the profit is taxed as your own income, as the income of a German resident company, or under the Außensteuergesetz.
How does Germany classify a US LLC?
Germany compares the LLC's actual structure with German company types, under a Federal Ministry of Finance letter of 19 March 2004. The result depends on your operating agreement, not on the US tax election, and should be checked before you form.
Do I have to tell the Finanzamt about my LLC?
Yes. Section 138(2) AO requires residents to report foreign businesses, partnership interests and company stakes of 10% or more. The report goes in with your tax return, at the latest 14 months after the year ends.
What is the low tax threshold under the Außensteuergesetz in 2026?
It is a tax burden below 15%, under section 8(5) AStG. It was 25% before, and the lower figure applies to financial years of the foreign company ending after 31 December 2023.
Can I avoid the CFC rules by showing real substance in the United States?
Not through the statutory substance test. Section 8(3) AStG limits that defence to companies with their seat or management in the EU or the EEA. A US company has to rely on earning active income instead.
Does the tax treaty with the United States solve this?
No. The convention allocates taxing rights and caps source tax on dividends, but its 2006 protocol expressly keeps Germany's right to apply the Außensteuergesetz, and a dual resident company can lose treaty benefits altogether.
What happens if I move out of Germany with the LLC?
If Germany reads the LLC as a corporation and you hold at least 1%, leaving is treated as a sale of your shares at market value. The tax can be paid in seven annual instalments on application.
Sources
- Aussensteuergesetz, sections 7 to 13 and 21: control above one half, the passive income catalogue, low taxation defined as a burden below 15 percent, the EU and EEA limit on the substance test, and the one third and 100,000 euro exemption
- Abgabenordnung, section 138: the duty of a German resident to report a foreign business, partnership interest or company stake of 10 percent or more, within 14 months of the end of the tax period
- Abgabenordnung, section 10: the place of management is the centre of the top level business direction, the test that makes a foreign company German tax resident
- Koerperschaftsteuergesetz, section 23: corporate income tax of 15 percent for assessment periods up to 2027, falling by one point a year to 10 percent from 2032
- United States and Germany income tax convention, 2006 protocol: the rule on fiscally transparent entities, the reservation of Germany's Aussensteuergesetz, and dividend rates of 5 and 15 percent
Official, read on 5 October 2026 on gesetze-im-internet.de: sections 10, 12, 138 and 379 of the Abgabenordnung, sections 1 and 23 of the Koerperschaftsteuergesetz, sections 6 to 13, 18 and 21 of the Aussensteuergesetz, sections 2, 7, 11, 16 and 36 of the Gewerbesteuergesetz, sections 17, 32a, 32d and 35 of the Einkommensteuergesetz and section 4 of the Solidaritaetszuschlaggesetz. The 1989 convention and its 2006 protocol were read on irs.gov. Not read in the primary source: the Federal Ministry of Finance letter of 19 March 2004 on classifying a US LLC, because the ministry's website could not be reached that day. Its date and role are taken from German tax law firms, and its criteria are described here in general terms only. Worked tax burdens use a municipal multiplier of 400 percent as an illustration, since every municipality sets its own. Wyoming and US federal figures are those of the other guides in this series. To reconfirm before acting: how your own operating agreement is classified, where your place of management lies, and whether your income is passive. Those are questions of fact for a German Steuerberater. This is not legal or tax advice.