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Advantages of Incorporating a Business in New Hampshire
There was a time when one of the major industries in New Hampshire was shipbuilding and then in the late 19th century, cotton and woollen mills became one of the drivers of the economy. On the other hand the shipping industry grew by 79% from 1992 and thus the state became home to Tyco International, a Fortune 500 company. Today, a start-up company in New Hampshire can be established in several different industries including durable goods manufacturing, services, retail trade, and wholesale trade. Agriculture is also quite a large industry, wherein dairy farming and dairy products contribute to almost 31% of the state’s total agricultural receipts.
Business Growth Incentive for New Businesses
The big question is why should you register a new company in New Hampshire? Yes, the economy and the infrastructure are key factors but what about benefits? The good news is that there are a lot of advantages and benefits that your business can derive. Let’s look at some of the basic advantages that an LLC or business corporation can leverage:
Advantage#1: The benefits of Incorporation or LLC formation
Corporation
- Tax Credits: There are several programs implemented by state government agencies and are aimed at helping businesses save through tax credits. Some of the top programs include:
– New Market Tax Credits: If you register a new business in New Hampshire as a Corporation, your business entity can be eligible for the “New Market Tax Credits” program. The program has been initiated by the Capital Regional Development Council (CRDC) and is partnered with Coastal Enterprises.
– The New Hampshire Research and Development Tax Credit: Your business can benefit from this tax credit if it is involved in research and development. Tax credits are applicable to research and development costs and can be carried forward for up to 5 years. - Federal taxation: If you register a new company in New Hampshire as an S corporation then the corporation or firm will not pay any income tax. Instead, each shareholder or owners in the company will be liable to pay tax on their personal tax returns.
- Independent life: When you register a new business in New Hampshire as an S Corporation, it 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.
LLC
- Flexible Profit Distribution: A start-up company in New Hampshire LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
- Brownfields Revolving Loan Fund (RLF): If you register a new company in New Hampshire as an LLC, you can participate in this program. Every start-up company requires some amount of financial aid to help push their goals forward and this program can just be the right one for you. The “Brownfields Loans” as it is known is being funded by the US Environmental Protection Agency and managed by CRDC. You can benefit from a maximum loan amount of $600,000.
- Limited Liability: As an owner of a New Hampshire LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
Advantage#2: New Hampshire Business Incentives
Once you register a new company in New Hampshire, there are several business incentives and programs that your company can benefit from. Let’s take a look at some of the most popular programs:
- New Hampshire Opportunity Zones: There are 27 low-income census tracts that have been nominated as opportunity zones in the state. The biggest benefit of registering your start-up company in New Hampshire in such a zone is tax credits. You can benefit from tax credits or tax incentives for making investments in these areas. Check MAP.
- Regenerative Manufacturing Tax Exemption: If your business qualifies for this program because it is involved in regenerative manufacturing then it will be exempted from the Business Enterprise Tax (BET) and the Business Profits Tax (BPT) for a period of 10 years.
- Capital Regional Development Council Funds: A start-up company in New Hampshire can benefit from a variety of business loans managed by CRDC, if they qualify. These loans are targeted at new and growing New Hampshire businesses. The maximum loan amount is $200,000. Some of the other loan programs managed by CRDC include the Bradford Loan Fund and the Sullivan County Loan Fund.
Are there any Disadvantages of Incorporating in New Hampshire?
The state of New Hampshire provides small and medium sized businesses with good transportation infrastructure, skilled workforce, several types of grants and loans, tax incentives, and Economic Revitalization Zone tax credit programs among others. What disadvantages could possibly be there for a start-up company in New Hampshire? In reality there are none except those that come with the type of business you register. For instance, processing of incorporation can be time consuming and require more paperwork. Also an LLC has the disadvantage of having a limited life. These are small disadvantages as compared to the many benefits that the state offers.