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Business Information & Rankings

• Vermont ranked 1st on the Healthiest State Index (Morgan Quitno, 2006)
• Vermont ranked 1st on the Smartest State Index: 2005-2006 (Morgan Quitno 2005)
• Vermont ranked 3rd Most Livable State in the nation. (Morgan Quitno, 2005)
• Vermont ranked 6th among the fifty states in export growth in 2004.

Cost of living

Crime Rate

Vermont has the 4th lowest overall crime ranking in the U.S. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Taxed. Municipalities may exempt manufacturers, inventories and tax business machinery and equipment instead.

Corporate Income Tax
Structured with four brackets and a top rate of 9.75%, Vermont’s corporate tax structure is among one of the priciest in the nation.

Personal Income Tax
Vermont’s income tax system has five brackets with a top rate of 9.5% starting at $326,450.

Personal Property Tax
Property is assessed at the municipal local level in Vermont. Vermont does not charge intangible property taxes.

State Sales and Use Tax
Base Rate: 6.00%
Machinery Rate: none

Vermont provides an exemption for machinery and equipment for use or consumption directly and exclusively in manufacturing tangible personal property for sale or in manufacturing other machinery or equipment, parts or supplies for use in the manufacturing process.

Unemployment Insurance
Vermont charges new employers 1.0% for 2 to 2.5 years.

In the last 5 years, there has been more start-up companies established in Vermont as compared to large corporations. There are several industries that have been growing at a rapid rate and many businesses have been formed in such industries like Agriculture, Forestry, Fishing and Hunting, Wholesale Trade, Professional, Scientific, and Technical Services, Educational Services (Private), and Health Care and Social Assistance among others. A research study has concluded that 16 industries out of the top 25 most concentrated industries in the state include production/manufacturing related, like Logging, Tea Manufacturing, Breweries, Ice Cream and Frozen Dessert Manufacturing, Game Manufacturing, and Coffee Manufacturing. This is more so because of the variety of incentives offered by the state and local agencies.

Business Growth Incentive for New Businesses

Why should you register a new business in Vermont? The state has witnessed $12.3 billion in economic activity fuelled by small and medium sized enterprises (SME’s) that are also instrumental towards 27% of employment. There has been an increase in the number of high-tech firms in Vermont in 2017 with 3,012 firms registering in the state as compared to 2,011 firms in 2007. This also goes on to say, how beneficial the incentive programs have been for businesses. Let’s take a look at some of advantages that your business can benefit from in the state.

Advantage#1: The benefits of Incorporation or LLC formation

Corporation

• Capital and Incentive programs: If you register a new company in Vermont then you will be able to benefit from a variety of capital as well as incentive programs. Capital sources or programs range from angel investing to a wide variety of debt sources especially those offered by Vermont Economic Development Authority. Some of these incentive programs have been rated amongst the best in the nation and include:
  – Brownfields Revitalization Fund (BRF)
  – ThinkVermont Innovation Grant Program
  – International Grants
  – Investment Capital
  – Northern Border Regional Commission Grants
  – Vermont Employment Growth Incentive (VEGI)
  – Grants by Office of Economic Adjustment (OEA)
  – Windham County Economic Development Program
  – Vermont Training Program (VTP)
• Zero Income Tax: If you register a new business in Vermont as an S Corporation, you can benefit from the fact that there will be no income taxes levied and an S corporation income or loss will be passed through to the stockholders. It is also important to know that there are a few exceptions.

LLC

• Tax Incentives: A start-up company in Vermont which is also an LLC can take advantage of several incentive programs offered by the state, cities, and counties like Newport. If you established your business in Newport, VT then some of the programs you can benefit from include:
  – Newport City Tax Stabilization
  – The Downtown Designation Program
  – New Markets Tax Credit Program (NMTC)
  – The Work Opportunity Tax Credit (WOTC)
  – Research and Development Tax Credits
  – Vermont Employment Growth Incentive
• Flexible Profit Distribution: A start-up company in Vermont registered as an LLC has the benefit of being able to select different ways of distribution of profits unlike a partnership where the distribution is 50-50.
• Limited Liability: As an owner of a Vermont LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.

Advantage#2: Vermont Business Incentives

Once you register a new company in Vermont, 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:

• Vermont Employment Growth Incentive (VEGI): This is a business incentive program that has been implemented by the Agency of Commerce and Community Development, State of Vermont. The primary objective of this program is to provide cash payments to businesses in a variety of industries that are authorized to earn this incentive based on specific performance requirements. The value of each of the cash payments to be made will be directly based on the revenue return generated through payroll creation, prospective qualifying jobs, and capital investment. Once a business has earned the incentive, it will be paid out over several years. Sample Application and Information
• Vermont Opportunity Zone program: The opportunity zone program has been created to target businesses that plan to relocate or expand their activities in such a zone. If you register a new business in Vermont OZ, your business will be able to benefit from several tax incentives. This includes all capital gains qualifying for a deferral. Map of Opportunity Zones

Are there any Disadvantages of Incorporating in Vermont?

As a start-up company in Vermont, you will be able to enjoy several benefits in the form of tax credits, grants, loans, Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) programs, ThinkVermont Innovation Grant Program, and Vermont Commercial Solar Incentives, and much more. So, the big question is – are there any disadvantages? In reality, there are no disadvantages as such except the ones that are specific to the type of business you register. For example, an LLC has a limited life and can get dissolved if a member dies. Similarly, incorporation can lead to higher overall taxes and this is where you can find relief in the form of the tax credit programs.

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Once a business is registered in Vermont, it is almost ready to become operational. The only aspect to consider at that point is whether your business requires a business license in Vermont or a permit or none. It is important to understand that a license is the key towards making any business operational in this state or any state.

In the “Green Mountain State”, every business doesn’t require a license or a permit and hence you will need to check with the state authorities and local agencies prior to starting operations. However, there are several types of business that may require either one or more permits or licenses. Some of the primary categories of business activities that require the issuance of a permit or a business license include:

• Building and construction
• Environment
• Health and safety

Now, let’s take a walk through the process of licensing in the state of Vermont.

Step-by-Step Guide to a Business License in Vermont

Here is a step-by-step approach towards acquiring a business license in the state of Vermont:

Step#1: The Industry or Business Activity

How would you know what type of business or professional license is required to operate in Vermont? The type of industry or the activities of a business entity helps in identifying the type of business license required.

The licenses or permits are issued by different state agencies. Let’s take a look at some examples to understand this better:

Retail Food Establishments

The business license in Vermont issued under this category includes Restaurants, Commercial caterer, Limited operation for off-premise consumption, Food Processor, Bakery, Seafood Vendor, Shellfish Reshipper, Lodging, Children’s Camp, and Temporary Food Stands including farmers market.

Any business entity falling in any of the above category is required to obtain a Food and Lodging License prior to beginning operations.

Issued by: Vermont Department of Health

Apply: You have to download and submit an Application for License to Operate a Food and Lodging Establishment with Vermont Department of Health, Food & Lodging Program Office via mail

Fees: The fee varies according to the type of facility or business activity and other aspects. For instance, the fee for:

• Restaurant with 1-25 seats is $105
• Fee for a Commercial Caterer – Push Cart is $260
• Food Processor with Gross receipts <$10,000 does not require a business license
• Lodging with Capacity of 51-200 is $390.00

Renewal of License: You can renew your license annually.

APPLICATION FOR LICENSE

Liquor Licensing

There are different types of Vermont company license issued for Liquor according to the type of business activity. They can be classified as:

• Wholesale Dealer License
• Hold an Event with Alcohol Permit
• Out of State Manufacturers License
• Vermont Manufacturers License
• First and Third Class Licenses for Restaurants and Bar
• Second Class License

Let’s look at an example to understand this – If you are planning to establish a restaurant serving liquor then apart from the food establishment license, you will also require a First Class License to serve beer and wine or a Third Class License to serve any other type of spirits.

License Issued by: Department of Liquor and Lottery, Division of Liquor Control

Fee: A business license in Vermont for liquor will be issued according to the classification mentioned above.

• A first class license fee for a Restaurant will be $115 to DLC – $115 to Town/City
• The fee for a third class license will either be a half yearly ($550 to DLC) or Annual ($1,095 to DLC)
• The second class license fee for Retail will be $70 to DLC – $70 to Town/City
• The License to Manufacture will be $285 to DLC

Application: The application will be different for different liquor business activities.

First Class Liquor License

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a state-wide license then you will have to check with the local city or county office. A Vermont company license can also be issued by local counties or cities in which the business is located. Let’s look at an example to understand how this works.

If you are planning to transact your business in the City of Burlington or South Burlington, VT then you will require a business license for specific types of services or activities. You will need to apply for a business license or permit with the Clerk’s Office or the Burlington Police Department depending on the type of business activity. Activities like Vendor/Sales, Entertainment or similar events will require a permit from the City Clerk Office although some events will require you to apply for a Police Event Permit Application as well. The process is the same for South Burlington as well.

SAMPLE ENTERTAINMENT LICENSE APPLICATION

Step#3: Issuance of a Business License

The process of issuance of a business license in Vermont may look complex but all you need to do is identify the following to complete the process:

1. The type of business or industry
2. The requirement – license or a permit?
3. Will it be issued by the state or the city or county?

Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city clerk office.

It is important to note that a business license or permit will have to be renewed annually unless specific dates have been mentioned, to keep the business operational.

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The Green Mountain State is home to 77,683 small businesses, 983 small business exporters, and an annual growth rate of 3.4%, which is similar to that of the nation. Small businesses in Vermont employed 158,098 people in 2017 and according to the Vermont Department of Taxes, the economic activity brought in revenue of $12.35 billion. According to a report by Bureau of Labor Statistics – QCEW NAICS, there has been a steady growth of mid-sized businesses in the state with 2,107 business registrations in 2018. If you are thinking of company formation in Vermont then this is the right time to leverage opportunities.

We are one of the top Vermont registered agents and can assist you with the successful registration of your business entity in the state.

Let’s take a look at how you can form a Vermont business LLC or Corporation.

Vermont LLC Registration and Formation

LLC company formation in Vermont is governed by 2015 Vermont Statutes, Title 11 – Corporations, Partnerships and Associations, Chapter 25 – Limited Liability Companies. The process for registration and formation of LLC is as follows:

Step#1: Maintain a registered agent

If you are planning to form a Limited Liability Company in Vermont then you will be required to continuously maintain a registered agent in the state pursuant to 11 V.S.A. § 4007. This law is applicable to domestic limited liability companies as well as foreign limited liability companies.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Vermont. We can assist you to form a Vermont business LLC.

Step#2: LLC Name Reservation

One of the foremost steps towards company formation in Vermont is identifying a name for your business entity. The process is as follows:

1. Identify a unique name for your business entity
2. According to 11 V.S.A. § 4005, the name should contain the phrase or words “limited liability company” or the abbreviations “L.L.C.”, or “LLC”.
3. The chosen name should be distinguishable and should not be deceptively similar to the name of any limited partnership, corporation, or limited liability company
4. Apply for reservation of name pursuant to the provisions of 11 V.S.A. § 4006 for a domestic LLC. A business entity will have to register a fictitious name.
5. Submit the form though mail or online with the Office of the Secretary of State of Vermont along with the applicable fee. An LLC can reserve its name for a period of 120 days.
6. If you form a Vermont business that is a foreign business entity then you will need to file for name registration.

Step#3: Articles of Organization and Certificate of Authority

If you are planning to form a Vermont business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are:

• If you want to register a domestic LLC then you will be required to file “Articles of Organization” governed by 11 V.S.A. § 4023.
• If your business entity is a foreign LLC then you will be required to file “Certificate of Authority” pursuant to 11 V.S.A. § 4112.
• The Articles of Organization and Certificate of Authority of domestic and foreign LLC can be filed with the office of the Vermont Secretary of State, Corporations Division, in person or online.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions regarding how to form a Vermont business, feel free to call us on 702-871-8678.

Vermont Corporation Registration and Formation

If you are planning to form a Corporation in Vermont then the procedure for registration and formation is as follows:

Step#1: Maintain a Registered Agent

If you are planning to form a business or professional corporation in Vermont then you will be required to continuously maintain a registered agent in the state pursuant to 11A V.S.A. § 5.01. This law is applicable to domestic as well as foreign corporations.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in Vermont. We can assist you to form a Vermont business as we are in compliance with all regulations in the State of Vermont.

Step#2: Corporate Name Reservation

In order to form a corporation in Vermont, one of the key steps is identifying a name for your business entity. What is the process? The process is as follows:

1. Identify a name for your business entity
2. According to 11A V.S.A. § 4.01, a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
3. The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or any other corporation
4. Apply for reservation of name pursuant to 11A V.S.A. § 4.02.
5. A foreign corporation would be required to register their name pursuant to 11A V.S.A. § 4.03
6. Submit the form through mail or online with the Office of the Secretary of State of Vermont along with the applicable fee. A business corporation can reserve its name for a period of 120 days.

Step#3: Articles of Incorporation and Certificate of Authority

If you are planning to form a corporation in Vermont, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:

• If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to 11A V.S.A. § 2.02.
• If your business entity is a foreign corporation then you will be required to file a “Certificate of Authority” to transact business in the state pursuant to 11A V.S.A. § 15.03.
• The application or documentation for registration of a corporation can be filed with the Office of the Vermont Secretary of State, Corporations Division, in person or online.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the incorporation.

If you have any questions regarding Vermont incorporation or LLC formation, you can simply visit the Vermont Business formation page.

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Incorporation in Vermont has been on the rise since 2017 and so have employment, GDP and GDP per capita growth. The “Green Mountain State” has undergone a Federal Tax “Reform”, the highlights being Lower marginal rates and Pass-through deduction while the Genuine Progress Indicator (GPI) climbed to $19.773 billion in 2018, which is an increase of 7% as compared to 2017. The Real Gross Domestic Product (GDP) of Vermont in 2017 was $27.96 billion. A report by Business Dynamic Series U.S. Census (2018) revealed that the 5 year business survival rate for new businesses is 48%, which is the same as Delaware and higher than North Dakota and Nebraska.

3,012 high-tech related firms established in Vermont. This is the right time to register your business in Vermont!

Why Choose Vermont for Incorporation?

Today, Vermont is one of the few states that attract small businesses more than large corporations. You can set up company in Vermont just like the 10,523 “new business formations” that took place in 2017 according to a report by Division of Corporations and Business Services in the secretary of state’s office.

Now let’s take a look at one of the most popular programs responsible for fuelling growth of small businesses:

• Vermont Employment Growth Incentive (VEGI): VEGI is an economic incentive with the objective of achieving business recruitment, growth and expansion. The program has been implemented by the Agency of Commerce and Community Development, State of Vermont and will be available post company incorporation in Vermont. As a part of the program, businesses can receive cash payments if they meet specific performance requirements. The value of each of the cash payments will be determined by the revenue return being generated by the State through payroll creation, qualifying jobs, and capital investments. Know More

How do you incorporate in Vermont?

What is the process of incorporation in Vermont? What type of documentation is required? These are some of the common questions that you will be confronted with if you are planning to start a new business in the state. The following steps will enable you understand the entire process:

Business Type

The first step towards incorporation in Vermont is choosing the type of business you want to form. You can choose to form an LLC or a Corporation. The type of business entity you want to form can be either a domestic or a foreign entity. The forms and fee will be different for each type of entity.

Business Entity Name

One of the most important steps towards incorporation in Vermont is naming your business entity. You have to start by identifying, searching, reserving, or registering the business entity name. There are 3 steps towards business name formation and they are:

1. Naming Requirements: A corporation under 11A V.S.A. § 4.01 and an LLC under 11 V.S.A. § 4005 should contain words like “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.” or similar abbreviation.
2. Business name search: You need to search for a business name that is not in use currently. You can conduct a name search here.
3. Name Reservation: Once you have identified a business entity name, and if the name is available then you can reserve the name for a period of 120 days. The name reservation request should be pursuant to the guidelines of 11A V.S.A. § 4.02 (business corporations) and 11 V.S.A. § 4006 (Limited Liability Company).
4. A foreign business entity will have to register their business name pursuant to 11A V.S.A. § 4.03.

Choose a Registered Agent

Whether you form a corporation or an LLC business entity, in order to transact business in the state of Vermont, you will have to maintain a registered agent pursuant to 11 V.S.A. § 4007, for LLC and 11A V.S.A. § 5.01 for business corporations.

We are one of the respected registered agents in Vermont and will be responsible towards initiating incorporation in Vermont through processing of your “Articles of Organization”, and “Articles of Incorporation” for domestic entities and “Certificate of Authority” for foreign business entities.

Articles of Incorporation and Certificate of Authority

You will be required to submit “Articles of Incorporation” if your business is a domestic corporation pursuant to 11A V.S.A. § 2.02, and a “Certificate of Authority” governed by 11A V.S.A. § 15.03, if it is a foreign business entity. In order to streamline the process of incorporation in Vermont, we can file documents on your behalf through the online process or through expedited process.

Date Stamped Copies

As a part of the process of company incorporation in Vermont, we will ensure, you receive date-stamped and filed copies that verifies the state has filed as well as formed your corporation.

Costs and Fees associated with Vermont Incorporation

What would it cost to set up a company in Vermont? Check Fees here!

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