Advantages of Incorporating a Business in Hawaii
Hawaii is not just a tourism hotspot but also one of the best destinations for starting a new business. It is interesting to note that there are 128,863 small businesses in Hawaii that have created 3,718 net new jobs leading to the economic growth of the state by 1.3% as compared to 2016. There has been an increase in startup companies in Hawaii and some of the fastest-growing small businesses include Acoustical Drywall Systems, Inc., ActivityRez LLC, Bonterra Renewable Energy & Solar Services, Maui Rental Group LLC, YK Drilling, and Hamakua Macadamia Nut Co., among others.
Business Growth Incentive for New Businesses
As one of the top registered agents in the state, we can help you to register a new business in Hawaii as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Hawaii is the right destination for establishing a business:
Advantage#1: The benefits of Incorporation or LLC formation
- Changes in Ownership: One of the advantages of setting up a Corporation in Hawaii is that changes in ownership are made possible through sale, purchase, and gifting of stock. This can take place without disturbing the ability of the corporation to conduct its business.
- Independent life: When you register a new business in Hawaii as a Corporation, your business will enjoy an independent life. This means that the incapacitation or death of a stockholder will not have a negative impact on the business operations.
- Pass through taxation: If you register a new company in Hawaii as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
- Limited Liability: As an owner of a Hawaii LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
- Flow through Taxation: An LLC can benefit from the process of flow through taxation that will ensure there are no double taxations.
- Flexible Profit Distribution: A startup company Hawaii LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
- No Minutes of meetings: An LLC startup company in Hawaii will not be required to maintain any minutes of the meetings or resolutions.
Advantage#2: Hawaii Enterprise Zone Program
The Hawaii Enterprise Zones Partnership Program (EZ) is one of the most beneficial programs tailored to a startup company in Hawaii. The program has been established by the Department of Business, Economic Development and Tourism (DBEDT) and is considered to be a state-county joint effort. Its primary focus is on increasing business activity, creation of jobs, and job preservation. The greatest benefit that businesses can enjoy through this program is an exemption from general excise taxes on the gross proceeds for a period of 7 years. Businesses can also take advantage of the non-refundable income tax credit that is equal to 80 percent of the tax liability in the first year.
Download information related to Designated Enterprise Zones and Eligible Business Activities
Once you register a new company in Hawaii, there are several other programs that you can benefit from and this includes foreign trade zone programs, HUBZone program or historically underutilized business zone program, workforce training funds for employers, and High Technology Business Investment Tax Credit among others.
Set up your business in Hawaii – Enjoy Strong Growth!
Are there any Disadvantages of Incorporating in Hawaii?
The state of Hawaii provides a long list of benefits and advantages to businesses but are there any disadvantages if you register a new business in Hawaii? The disadvantages are very few and will not impact your business in any way. One of the disadvantages is that you have to pay a higher fee and the time taken to process incorporation is also longer compared to other forms of organization. The fact is that these are small disadvantages compared to the several benefits that can steer your business towards substantial growth.