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

Corporation

• 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.

LLC

• 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.

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If you have incorporated a business in Hawaii or planning to form a small business in the state then it’s time to apply for a business license. In order to operate your business in Hawaii, business licenses, permits, and other professional licenses have to be obtained. Absence of license or permit to operate a specific business can lead to heavy penalties and in some cases, closure of the business.

It is important to note that a business license in Hawaii pertaining to a specific industry is issued or regulated by agencies related to that industry. For example, food services require license or permits, which are regulated by the State of Hawaii, Department of Health, Sanitation Branch. Similarly, a license to open a firearm store and sell firearms in the county of Hawaii is being regulated by the Department of Finance, Vehicle Registration & Licensing Division.

How to Get a Business License in Hawaii

Where and how do you apply for a Hawaii company license? Are permits required for my business entity? Does the business entity require a single license or multiple permits or licenses? Who is the issuing authority for these licenses or permits? The only way to answer these questions is by understanding the process of business licensing.

There are two steps towards acquiring a business license in the state of Hawaii and they are:

The Industry and Business Operation

This is the first step towards acquiring a business license that is appropriate for your business. You need to identify the industry relevant to your business. Once you have identified the industry, you need to be clear about what your business entity is offering in terms of service or products. Let’s look at an example to understand this well.

Industry Type: Food Business

• Food establishment category refers to “permanent” establishments like restaurants, catering entities, bars, convenience stores, or other types of food establishments.
• There are “Special Event Food Establishments” as well. These are not permanent in nature and manifest in the form of food sale events like fundraiser events, carnivals, farmers market, and food shows among others.
• Lastly, there are “vendors” that can be a part of food establishments or special event food establishments. Food vendors include lunch wagons and food trucks.

Business License or Permits

• Business license in Hawaii is required if you are planning to set up a bar or serve liquor in a food establishment.
• If you are planning to start a restaurant or become a caterer, you will require a business permit.
• If you are planning to establish lunch wagons or food trucks then you will be required to obtain a vendor business license as well as a permit to operate as a vendor.

Who issues the License?

Who is responsible for the issuance of Hawaii company license? What is the annual fee? Do I need to renew it? These are some of the important questions to consider as licenses pertaining to different industries are issued by different government authorities. It is also important to consider the fact that for some businesses, only permits are required and in some cases, both business license and permits are required. Let’s look at the Food Business example to clearly understand this.

Food Establishments in Hawaii

If you set up a food establishment then it will be regulated by the State of Hawaii, Department of Health, Sanitation Branch. A food establishment will not require a business license in Hawaii; instead you will require a permit. The permit application is different for different counties and has to be filed with the sanitation branch of the county you are starting your business in for example:

• FOOD ESTABLISHMENT – MAUI
  If you are planning to set up a permanent food establishment in Maui then the application has to be submitted at Sanitation Branch, 54 High Street, Room 300, Wailuku, HI 96793.
  The business license or permit fee for a small restaurant would be $200 and that of a large restaurant would be $400.
  The permit has to be renewed each year.
• FOOD ESTABLISHMENT – KONA
  If you set up a permanent food establishment in Kona then the application has to be submitted at Sanitation Branch, 79-1020 Haukapila Street, Room 115, Kealakekua, HI 96750.
  The Permit fee for a small restaurant would be $200 and that of a large restaurant would be $400.
  The permit has to be renewed each year.

Now, if you were to serve liquor on the premises then you will have to file an application for business license in Hawaii to serve liquor. The liquor license has to be renewed each year on May 31 and the annual fee will depend on the type of outlet, for example: The business license fee for a restaurant that serves wine and beer is $960 and the fee for a restaurant serving all types of alcohol is $1,320.

Once, you have identified the type of business, all you have to do is download the correct business license application and file it online.

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The Department of Business, Economic Development & Tourism in Hawaii predicts higher economic growth in 2018 and 2019. This growth outlook is based on several factors like the performance of the tourism industry in Hawaii, the availability of skilled labor in the state, and tax revenues among others. The Blue Chip Economic Consensus Forecasts report reveals that the real GDP will witness an increase of 2.8 percent in 2018. So, if you are planning to form a Hawaii business then this is probably the best time to do it!

We are one of the top Hawaii registered agents and are familiar with all processes pertaining to the Hawaii State and can provide information and assistance for successful set up of your business!

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

Hawaii LLC Registration and Formation

LLC company formation in Hawaii is governed by Chapter 428 Uniform Limited Liability Company Act. The procedure for registration and formation of LLC is as follows:

Step#1: Maintain a registered agent

According to HI Rev Stat § 428-107 (2010 through Reg Sess), an LLC will be required to maintain a registered agent if you are planning to form a Hawaii business. A registered agent is required for both domestic business entities as well as foreign entities authorized to transact business in the state of Hawaii. 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 Hawaii.

We are in compliance with all regulations in the State of Hawaii.

Step#2: LLC Name Reservation

One of the key requirements of company formation in Hawaii is reservation or registration of a business entity name. A domestic or foreign LLC is required to identify a name, which can be reserved pursuant to HI Rev Stat § 428-105 (2010 through Reg Sess) by submitting an application to the Department Of Commerce And Consumer Affairs, Business Registration Division. An LLC can reserve its name for a period of 120 days.

Step#3: Articles of Organization and Certificate of Authority

If you are planning to form a Hawaii business LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. You will be required to file Articles of Organization pursuant to HI Rev Stat § 428-203 for a domestic LLC. If your business entity is a foreign LLC then you will be required to file an “Application for Certificate of Authority” pursuant to HI Rev Stat § 428-1002. The application or documentation for registration of LLC can be filed with Department Of Commerce And Consumer Affairs, Business Registration 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 Hawaii business, feel free to call us at 702-871-8678.

Hawaii Corporation Registration and Formation

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

Step#1: Maintain a Registered Agent

According to HI Rev Stat § 414-61 (2010 through Reg Sess), you will be required to maintain a registered agent if you are planning to form a Hawaii business. A registered agent is required for both domestic business entities as well as foreign corporations authorized to transact business in the state of Hawaii. 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 Hawaii.

We are in compliance with all regulations in the State of Hawaii.

Step#2: Corporate Name Reservation

Whether you form a domestic profit corporation or a foreign corporation, you need to identify a name and reserve it pursuant to §414-51 and §414-52. A key component of company formation in Hawaii, reservation of name will provide the business entity with exclusive rights towards using the domestic or foreign corporate name for business purposes.

Step#3: Articles of Incorporation and Certificate of Authority

If you are planning to form a Corporation in Hawaii then the type of registration form you will require is dependent on whether your business is based in Hawaii or if it is a foreign entity. You will need to file Articles of Incorporation for a domestic Corporation pursuant to HI Rev Stat § 414-32. If it is a foreign business entity then you will have to file an Application for Certificate of Authority pursuant to HI Rev Stat § 414-433. The application or documentation for registration of LLC can be filed with Department Of Commerce And Consumer Affairs, Business Registration 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 Hawaii Incorporation or LLC formation, you can simply visit the Hawaii Business formation page.

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When you think of Hawaii, the first thing that comes to mind is being in one of the most exotic locales in the world. The question is – can you set up a company in Hawaii and sustain stable growth? Yes, you can. Since, this is a tourist destination, the tourism industry in 2017 set a new record with visitors spending $16.78 billion, which is a straight jump of 6.2 percent since 2016. The good news is that several new businesses opened up and effect supporting 204,000 jobs. If this is not the place to start a business then where is?

Set up Company in ‘El Paradiso!’

Why Choose Hawaii for Incorporation?

Tourism has definitely opened the industry and also created space for other industries directly or indirectly related to it like travel or transportation, food services, accommodation, real estate etc. A 9.7 percent gain in visitors spending in Hawaii in 2017 can be seen in several areas including lodging or accommodation, food and beverage, shopping, and entertainment and recreation, and this is considered as one of the reasons for the rise in number of company incorporations in Hawaii. Here’s a Year over year (YOY) data for small businesses in Hawaii:

• 2017 – Number of Small Businesses: 128,863 – Employment Created: 271,340 – Growth, Annual Rate: 1.3%
• 2016 – Number of Small Businesses: 126,600 – Employment Created: 267,796 – Growth, Annual Rate: 0.3%
• 2015 – Number of Small Businesses: 122,566 – Employment Created: 263,364 – Growth, Annual Rate: 3.8%

Now let’s take a look at some of the salient benefits that are responsible for fueling growth of small businesses:

Hawaii Enterprise Zone Program

The Enterprise Zones Partnership Program (EZ) established by Hawaii State Legislature is being promoted by Department of Business, Economic Development and Tourism (DBEDT). If you set up a company in Hawaii that falls in a specific enterprise zone like Kauai County or Honolulu County then the business entity will enjoy tax benefits and other incentives. Businesses can also claim state income tax credits for a period of 7 consecutive years. To become an enterprise zone business, enroll here.

Business Grants and Incentives

One of the advantages of incorporation in Hawaii is that you can benefit from or claim a variety of business grants and incentives. One of the most popular program is:

• Hawaii Small Business Innovation Research Program (SBIR): This is a Federal program that can be categorized into three phases. If you set up a company in Hawaii, and are new to SBIR, and if you require funds for business expansion then this is the program that will help you. You can apply for funds through HTDC’s Hawaii SBIR Phase 0 Grant program.

How do you incorporate in Hawaii?

What is the process of incorporation in Hawaii? 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 understanding of the entire process:

Business Type

The first step towards incorporation in Hawaii 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 however be different for each type of entity. Know more

Business Entity Name

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

• Naming Requirements: A corporate name pursuant to HI Rev Stat § 414-51 (2010 through Reg Sess) should contain the words “corporation”, “incorporated” or abbreviation like “corp.”, and “inc.” The names should be distinguishable from existing names.
• Business name search: You need to search for a business name that is not in use currently. You can conduct a name search here.
• Name Reservation: Once you have identified a business entity name, it is advisable to reserve the name by filing an application with Department of Commerce and Consumer Affairs pursuant to HI Rev Stat § 414-52 (2010 through Reg Sess). Name reservations are valid for 120 days.
  Application of Reservation of Name

Choose a Registered Agent

A domestic business entity as well as foreign entity authorized to transact business in the state of Hawaii will have to maintain a registered agent pursuant to HI Rev Stat § 414-61 (2010 through Reg Sess). We are one of the respected registered agents in Hawaii and will be responsible for initiating incorporation in Hawaii through the processing of your “Articles of Incorporation” for domestic corporations and “Certificate of Authority” for foreign corporations.

Articles of Incorporation and Certificate of Authority

You will be required to submit an “Articles of Incorporation” if your business is a domestic corporation and a “Certificate of Authority” if it is a foreign business entity. In order to streamline the process of incorporation in Hawaii, we can file documents on your behalf through the online process or through an expedited process.

Date Stamped Copies

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

What would it cost to set up a company in Hawaii?

Costs and Fees associated with Hawaii Incorporation – Check Fees here!

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Business Information & Rankings

• Hawaii ranked as the Most Expensive State to Do Business (Cost-of-Doing Business Index, Milken Institute, 2005)
• Hawaii ranked 50th on Climate for Small Business and Entrepreneurs (Small Business Survival Index, 2004)
• Hawaii ranked last on the State Business Tax Climate Index (The Tax Foundation, 2004)
• A poll of 458 Chief Executives ranked Hawaii as the 5th -least-attractive state for business.

Note: It is expensive to live and do business in Hawaii. A limit on the amount of developable land available and Hawaii?s distance from the Mainland translates to higher costs associated with having to import most items. Because of these reasons, Hawaii does not rank well on most business indexes.

Cost of Living Index

Crime Rate

Hawaii has the 46th lowest crime ranking in the U.S. (U.S. Dept. of Justice, FBI, Uniform Crime Reports, 2004)

Fees & Taxes

Business Inventory Tax
Business inventory is exempt.

Corporate Income Tax

Qualified taxpayers with Hawaii sales of $100,000 or less may pay an alternative tax of 0.5% of Hawaii gross annual sales.

Personal Income Tax
Hawaii’s personal income tax system consists of nine brackets with a top rate of 8.25% starting at an income level of $40,000. This top rate ranks the state 5th highest among states levying personal income taxes.

Personal Property Tax
Exempt. Intangible personal property is exempt from taxation. Personal property such as cars or boats are not subject to property tax.

Real property, land and improvements are taxed with assessments at 100% “fair market value.” Tax rates are per $1,000 net assessed value.

State Sales and Use Tax
Base Rate: 4%
Machinery Rate: 0.5%

Unemployment Insurance
Hawaii’s new employers’ rate is 2.4% for 3 years.

Once your company is set up, you will need:

1. Tax ID (EIN) – free over the Internet or phone.
2. Yearly Requirements and Fees for Massachusetts companies – Statement of Information is an initial statement of officers or member/managers that must be filed with the Massachusetts Secretary of State within 90 days after filing original articles, and every year thereafter in the applicable filing period. For LLCs there is an addition Franchise Tax that is $800 per year. The first payment must be made within 3 months of your LLC.
3. Company Minutes & Stock Certificates – are included in incorporation. You will have access to documents generated on your client account.

Massachusetts additional services

• Registered Agent
• Annual Report
• EIN (Tax ID)
• More Additional Services