A publication on economic development, “Site Selection” has named Alabama the 6th best state in terms of business climate. The ranking was a part of their Annual State Business Climate survey. Economic development in Alabama has shown a positive growth in recent times with new capital investment totaling $4.2 billion in 2016 and between 2011 and 2016; the capital investment was $28.5 billion.
Some of the top brands of the world have set up companies in Alabama and this includes Toyota, Mercedes-Benz, Aerojet Rocketdyne, Blue Origin, Sparks Energy, Leonardo, Lake Homes Realty, Autocar, Alabama Drydock and Shipbuilding Company, and many others.
Why Choose Alabama for Incorporation?
Why should you opt for Incorporation in Alabama? We are talking of a state that provides not only one of the best business climates but also incentives and benefits to small and medium sized businesses (SME’s). Let’s quickly take a look at some of them:
One of the reasons why company incorporation in Alabama makes good business sense is that businesses can enjoy low tax burden in the state. An Alabama Corporation will be subject to State Corporate Income Tax at a flat rate of 6.5% of the net income. If you have formed an S Corporation then you will be able to benefit from “pass through taxation”. This simply means that you as the owner will pay income tax on your income and not on the income of your business. As a result, the business can enjoy overall growth and is free from tax and other financial burdens.
Industrial Development Grant
If you set up a company in Alabama under which, a project initiated your business is undertaken or sponsored by one or several investment companies and where your predominant business activity or trade constitute warehousing, research, or industrial activities then your business will be eligible for Industrial Development Grant. The amount of grant you can receive will be dependent on the total amount of capital investment for example: if your capital investment is between $200,000 and $499,999 then you can get a grant of 3.5% or a minimum of $10,000.
There are a variety of industry incentives available to businesses post incorporation in Alabama. Some of the common incentives or credits include:
- If your business specializes in manufacturing then use of raw materials for manufacturing will be exempt from sales and use tax.
- The state sales and use tax is abated for several industries and most prominent of them include coal mining projects.
- Businesses are exempt from utility gross receipts tax especially on electro-thermal manufacturing processes, where natural gas is being used to convert raw materials to finished products, etc
- After you set up a company in Alabama, you can enjoy annual cash refund of almost 3% of the previous year’s gross payroll for a period of 10 years.
How do you incorporate in Alabama?
Company Incorporation in Alabama is one of the best business decisions one can make. There are several benefits that you will be able to enjoy but first things first; you need to register your business in the state. There are several requirements that are necessary for registering your C or S Corporation. We at incparadise.net have a team of specialists who can guide you towards setting up an Alabama C Corporation, S Corporation, or an LLC in the shortest possible period.
Here is a step by step procedure towards Incorporation in Alabama
- Type of Business: You can form different types of business entities under Domestic or Foreign entities and this includes Limited Liability Companies (LLC), Limited Partnerships (LP), Limited Liability Limited Partnerships (LLLP), Non-Profit Corporations, and Corporations. It is important to identify in advance the type of business you want to set up in Alabama.
- Business Entity Name: The business entity naming process is as important as company Incorporation in Alabama or registration of business process. You have to ensure the name of your Alabama Corporation contains the words “Corporation”, “Incorporated” or an abbreviation like “Inc.” or “Corp.” You have to not only identify a name but also ensure it is not in use. You can search the name database of Alabama Secretary of State.
You will then have to reserve the name and obtain a name reservation certificate. It is important to note that without the certificate, company incorporation in Alabama is not possible.
- Registered Agent: Every business entity needs to name a Registered Agent as mentioned in Title 10A – Alabama Business and Nonprofit Entities Code, Section 10A-1-5.31. There are different types of services, a registered agent provides including initiating incorporation in Alabama. As one of the top registered agents in Alabama, incparadise.net, can also receive any and all legal and business related paperwork on your behalf.
- Certificate of Incorporation: You will need to file a Certificate of Incorporation for a Domestic Corporation or Certificate of Formation for Foreign Corporation. We can always file on your behalf through the standard process online or through expedited process.
- Date Stamped Copies: As a part of the process of company incorporation in Alabama, we will ensure, you receive Certified Copy and Certificate of Status verifying the state of Alabama has filed as well as formed your corporation.
Costs and Fees associated with Alabama Incorporation
What would it cost to set up company in Alabama?
Check Fees here!