Lawmakers Question If Wyoming Is Too Lax With Shell Corporations

Wyoming is considered to have some of the most private trust laws in the country, regulation that was put in place for the state to advertise itself as having a more business-friendly environment. Trust companies in Wyoming manage at least $31.5 billion in assets.

Leo Wolfson

August 25, 20238 min read

State Capitol 8 25 23
(Matt Idler for Cowboy State Daily)

DOUGLAS — The practice of concealed trust and business ownership continues to baffle Wyoming officials.

Colin Crossman, director of the Wyoming Secretary of State’s Business Division, told lawmakers on the Corporations, Elections and Political Subdivisions Committee on Thursday that tracking shell corporations is “very, very hard” for his staff.

In fiscal year 2023, which ended June 30, Crossman said his department saw a 27% increase in overall business filings with the state, the largest year-to-year growth in at least five years.

“That’s massive,” he said. “We are growing very, very fast.”

Some of that is because of Wyoming’s rules that allow for more anonymity in creating shell companies, an asset-shielding strategy often called the Cowboy Cocktail.

Wyoming is considered to have some of the most private trust laws in the country, regulation that was put in place for the state to advertise itself as having a more business-friendly environment. Trust companies in Wyoming manage at least $31.5 billion in assets, the state reported in 2021. 

Wyoming is one of only a few states that allow people to name a private company as the head of a financial trust, ensuring complete control of the assets and an additional layer of financial secrecy.

Secretary of State Chuck Gray said he supports looking into shell corporations and trust laws in Wyoming, an issue he vowed to address during his 2022 campaign.

Friendly Laws

During a legislative hearing in June, Crossman said limited liability corporations are often formed in Wyoming by small businesses “looking for protection,” but added that the vast majority “are not bringing specific business into Wyoming.”

Crossman mentioned Thursday how Wyoming was rated in a recent Forbes Magazine article as the No. 3 state to file a business in, behind Delaware (No. 2) and the state an applicant lives in as No. 1.

“We’re basically the No. 2 jurisdiction to form a small business,” Crossman said. 

Crossman said contributing to the state’s growth in business filings is that Nevada, one of Wyoming’s main competitors for business filings, has raised its rates significantly recently. 

Another impact, he said, has been the COVID-19 pandemic, which has led many people to start their own businesses at an unprecedented rate. 

A Dark Side

A dozen international clients accused and charged with serious financial crimes that Wyoming trusts were identified in the Pandora Papers, an exhaustive report of more than 11.9 million records obtained by the International Consortium of Investigative Journalists in 2021.

A Russian oligarch and an aide to a Dominican Republic dictator were just a few of those identified as using Wyoming as a place to stash their money in shell corporations. 

Wyoming provides two trust options for those with assets of $100 million or more. According to the ICCJ, one option is regulated, which helps investors avoid unexpected tax bills or inspection. The other trust is unregulated and allows families to place control of a trust in the name of a private, family company. 

Shell Game

State Sen. Cale Case, R-Lander, co-chair of the Corporations Committee, questioned Crossman if many of the new business filings are actually shell corporations, a corporation without active business operations or significant assets used as a placeholder to obscure transfer of money. 

“It’s good to be business friendly,” Case told the committee. “I think there’s a dark side to being too business friendly, and I’m trying to figure out where we are on that continuum.”

Case told Cowboy State Daily he is specifically curious whether recent world events such as Russia’s war with Ukraine has led to cash being funneled into Wyoming. Many financial institutions froze assets belonging to prominent Russian oligarchs and leaders in response to the war.

“Are we seeing an increase because of events in the world related to huge filings of a potentially big magnitude?” he questioned. 

During the 2022 legislative session, Case brought a bill that would have tightened the state’s trust laws, but it was defeated.

Although Crossman doesn’t believe that it is the biggest factor behind the growth, he acknowledged that shell corporations are contributing to the increase and are filed in Wyoming regularly, which he sees as part of a nationwide trend. Nevada, Alaska, South Dakota and Delaware have all been named by the European Union as “hubs of financial and corporate secrecy.”

“Determining how much of that we are seeing and how much our growth is that, is very, very hard,” Crossman said.

Crossman estimated that 70% to 80% of entities are filing the minimum $60 annual fee to renew an LLC in Wyoming, the rate for companies with $300,000 or less in assets. 

Because of the way the tax laws related to entities with $300,000 or less in assets are structured, Crossman said this makes it very difficult for his staff to determine whether an entity is operating from out of state, is a full-fledged shell corporation and what is simply unprofitable. But he also said his staff “potentially” has the ability to determine how many are claiming no assets, a common sign of a shell corporation.

Not So Bad?

Some have countered that Wyoming isn’t the tax haven others make it out to be. 

In 2022, Jackson attorney Chris Reimer testified before the Legislature that large, shady business fronts are the exception in Wyoming, not the norm. Reimer expressed fear that burdening all of the state’s companies with tax and oversight laws would drive beneficial and law-abiding businesses to other states.  

In addition, the federal Corporate Transparency Act was passed in 2020, which requires corporations and LLCs to disclose ownership information directly to the Financial Crimes Enforcement Network of the U.S. Treasury Department. 

Crossman said one effort of increased enforcement his staff is employing is making sure that commercial registered agents of a business are keeping lawful records. 

He said the Secretary of State’s office has also engaged in a new audit process for LLCs, which Gray said has resulted in a few identified “problems.”


Revenue from business filings in Wyoming is also up nearly 25%, from $33 million to $42 million.

“Bottom line, the growth is continuing and accelerating because of the favorable business climate that Wyoming has, and specifically for LLCs,” Crossman said. “Assuming Wyoming continues to have that favorable business climate, I don’t see that growth going away.”

Crossman expressed some concern about the accelerating nature of the growth, but said his office is working on developing a few measures to improve efficiency. Even a recession wouldn’t likely slow the state’s business growth by much.

“The growth continuing like it is, it is apparently an exponential curve and that does have me somewhat concerned with how that looks three, four, five years out,” he said.

He said this may lead the department to having to hire more staff or purchasing better technology to handle the growth.

“Since you found the state almost $9 million more, we could probably shake a little bit loose to help you out with your staffing issues I’d imagine,” Case told Crossman.

But Gray said his department isn’t asking for any more positions at this time and is looking at a new business filing program that would greatly reduce the need for more employees in the future. 

“I want us to be to the bone, I want us to get the job done,” he said. “But we’re also not going to be in any way wasteful.” 

A Few Other Measures

In 2019, the Wyoming Legislature established a chancery court, providing a forum for streamlined resolution of commercial, business and trust cases in the state. Specifically, the court focuses on resolving business and trust cases in a more expeditious manner.

Case said this court was formed as an effort to try and emulate some of the regulatory changes made in Delaware. 

Sen. Bill Landen, R-Casper, said the chancery court isn’t as active as some had hoped it would be when created, but it has handled some cases. 

During the 2023 legislative session, another bill passed into law allows digital assets to be registered with the Secretary of State’s office.

Gray said his department supports these efforts, but he also expressed doubt about the overall impact they will have.

“Like any field of dreams there’s that potential of hitting the jackpot there but I’d say the higher percentage chance is that it wouldn’t play out,” he said.

Leo Wolfson can be reached at

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Leo Wolfson

Politics and Government Reporter