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Advantages of Incorporating a Business in Alaska
Why should you register a new company in Alaska? Alaska offers a variety of advantages to businesses that are planning to locate and operate from the state. Businesses can leverage a variety of economic factors including prime location, stable economy and low taxation.
Alaska is a state with a geography that creates constraints as well as opportunities for the economy of the state. Alaska has abundance of natural resources, strategically located, and more recently natural beauty has been one of the key factors driving their economy.
Advantages that Businesses can capitalize from
What benefits can a startup company in Alaska derive? The state offers a variety of loan programs, incentives, and tax credits to businesses that are willing to relocate here. Let’s take a quick look at some of the business beneficial programs.
Advantage#1: Tax Credits
When you register a new business in Alaska, you will be able to benefit from a variety of tax credits that the state offers. These tax credits are available depending on the type of industry, associations, and projects performed. Of course, businesses will need to qualify to benefit from this. Some of the commonly applicable tax credits include:
- Education: In accordance to Alaska Statutes 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, you can benefit from tax credits if you make contributions to Alaska Universities as well as accredited Non-Profit Alaska Colleges. The tax credit will be 50% of the first $100,000 followed by 100% on contribution between $100,000 and $300,000. The total credit allowed per year can be a maximum of $5 million.
- New Area Development: In accordance to Alaska Statutes 43.55.024(a), if your startup company in Alaska is located or is operating from outside south of 68 degrees north latitude and the Cook Inlet then your business will be eligible for tax credit per year and can be a maximum of $6 million.
Veteran Employment Tax Credit: If you register a new business in Alaska that employs veterans then you can benefit from a credit of $3,000 for disabled veterans or $2,000 for non-disabled veterans.
Some of the other tax credits, which are industry specific and you can benefit from include Qualified Oil and Gas Service Industry Expenditure Credit, Qualified Capital Expenditures, Gas Exploration and Development, Minerals Exploration Incentive, Film Production Credit, Frontier Basin Credits, and Exploration Incentive among others
Advantage#2: Loan Programs
The state of Alaska offers a variety of loan programs to those who register a new company in Alaska. Some of the most popular and successful loan programs include:
- Rural Development Initiative Fund: It is available to businesses situated in a community area with a population of 5,000 or less. The loan amount cannot exceed $150,000 for an individual or $300,000 for businesses run by two or more people. The loan term is a maximum of 25 years.
- Small Business Economic Development: This loan program has been created specifically to provide financial support to startup companies in Alaska or for expansion of such businesses. The loan amount cannot exceed $300,000.
- Microloan Loan Program for Women Entrepreneurs: This program provides financial support to women owned startup companies in Alaska. The loan amount cannot exceed $10,000.
Some of the other loan programs that businesses in Alaska can be eligible for include Microloan Loan Program, Alternative Energy Conservation Loan Fund, and Mariculture loan.
Are there any Disadvantages of Incorporating in Alaska?
If you register a new business in Alaska, are there any disadvantages? When it comes to tax or forming a business in Alaska, there are no disadvantages. The only problems that businesses might face in the state is its remoteness from some of the major markets across the nation and worldwide. Apart from this, the mountainous topography of the state creates a cold climate that ensures the state is covered in a snow blanket for a longer period of time.