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Advantages of Incorporating a Business in Virginia
The Old Dominion is a great place for a start-up company in Virginia as businesses Virginia as businesses locating to this state will be able to benefit from low operating costs, business-friendly tax structure, a wide variety of incentives, and several other advantages. Some of the advantages are:
- It is a right-to-work state
- Strategic Location with access to Interstates & Highways
- Easy access to Major US Markets
- Highly educated and skilled workforce
- A variety of Workforce Development programs
- Advanced Fiber Broadband Network
- Easy access to several utilities including Natural Gas, 3 phase electrical service, Wastewater Plants etc
Advantages of setting up an LLC or Corporation
Forbes 2018 report makes it quite evident that “Virginia is the #4 Best State for Business” and is ranked #1 where “Regulatory Environment” is concerned. It is home to many major business services operations and there are many start-ups that register a new company in Virginia every day. The state also offers a competitive cost environment for business entities and it is also home to one of the largest concentrations of tech or IT workers in the nation. These are some of the business environment specific advantages that your business will be able to leverage. Let’s take a look at some specific advantages like that of an LLC or a Profit Corporation.
Advantage#1: Salient benefits of Corporation or LLC
Corporation
- Tax Credits: There are a variety of tax credits that you can benefit from especially if you register a new business in Virginia. Some of the top programs beneficial for businesses include:
– Major Business Facility Job Tax Credit: Businesses can benefit from income tax credit of approximately $1,000 for each new full-time job created. You can carry forward unused credits for a period of 10 years.
– Refundable Research and Development Expenses Tax Credit: You can avail of corporate income tax credit equal to almost 15% of the first $300,000 that is invested in qualified R&D in the state.
– International Trade Facility Tax Credit: This is an income tax credit that you can avail of on either capital or creation of jobs in an international trade facility (ITF)
– Green Job Creation Tax Credit: A business can avail of this corporate income tax credit on any new green jobs created. - Independent Life: One of the salient advantages of an S Corporation in Virginia is that it enjoys an independent life. The death or incapacitation of a stockholder will not disturb operations of the business.
LLC
- Small Business Grants: If you register a new company in Virginia as an LLC, you will be able to benefit from several small business grant programs the state offers. Some of the popular programs include:
– Virginia Economic Development Incentive Grant (VEDIG): It is a discretionary performance incentive with the objective of encouraging businesses to invest in Virginia and create new employment opportunities.
– Virginia Investment Partnership Act (VIP) / Major Eligible Employer Grant (MEE): This is another discretionary performance incentive with focus on continued capital investment, and increase in production using advanced technology.
– Commonwealth’s Opportunity Fund (COF): A financial incentive for businesses that has been established to support projects, which promote new jobs as well as investment.
Know more about Incentives - Limited Liability: If you register a new business in Virginia as a LLC then you will be able to enjoy limited liability protection. This means claimants can sue the LLC and not the owner or investors.
Advantage#2: Other Business Incentive Programs
There is a variety of business incentive programs including tax credits, exemptions, discretionary incentives, and financing programs available for small and medium enterprises or a start-up company in Virginia. Let’s look at some of the top programs in Virginia.
The Virginia Enterprise Zone (VEZ)
The objective of the Virginia Enterprise Zone is to enable businesses that are located here in stimulating economic development and earn incentives in return. Some of the incentives include:
- 90% rebates on fees for using permit, rezoning, etc.,
- Tax credits for creating employment.
- Cash grants equal to 50% of net increase on tools and machinery tax
- Commercial Façade Loan Program that makes available loans amounting from $5,000 to $50,000
- Corridor Streetscape Improvement Incentive
- Mixed-Use Development Incentive
- Tax Exemption for Rehabilitated Structures
Currently, you can register a new company in Virginia Enterprise Zone in Portsmouth only. Incentives in VEZ
Are there any Disadvantages of Incorporating in Virginia?
When you register a new business in Virginia, you can be rest assured that there is a wide variety of business incentives to leverage. The question is – are there any disadvantages? The disadvantages are limited to the type of business entity you form. For instance, an LLC requires more paperwork and is complex as compared to a partnership or sole-proprietorship. Similarly, disagreements or conflicts among the stockholders of a business corporation may immobilize overall decision making. The disadvantages will not affect business growth keeping in mind the incentives and infrastructure offered by the state.