Hawaii is the only insular state in USA located in the Pacific Ocean and sums up a number of 132 islands, with Honolulu as the capital. The reach history and culture, the high costs of living and especially the tourism sector that represents the main engine of the state are only a few of the attributes of the Aloha State. More often known as an exotic destination found in the middle of the ocean, Hawaii also presents an appropriate business climate for entrepreneurs from overseas. Before deciding on the type of business in the insular state, we invite you to read the general guide to company incorporation in Hawaii, considering that the formalities are simple and can be supervised by our team of agents for company formation in USA.

Opening an LLC in Hawaii

The proper option for starting a business in USA is the limited liability company which is also the most popular entity preferred for incorporation in Hawaii. The Department of Commerce and Consumer Affairs is the institution that accepts and registers the companies in Hawaii, whether established by locals or by foreigners. The Articles of Organization are mandatory when creating an LLC in Hawaii and must cover all the details related to the owners (name, nationality, address), the name of the company, the purpose of the business, the board of directors, and the appointed agent who will represent the company on your behalf.

The operating agreement in Hawaii

Just like in most states of America, an operating agreement must be considered and filled, but not with any particular institution. Such covenant with high importance for a limited liabilitty company in Hawaii comprises details about the shareholders of the company and also information about how activities will be operated in Hawaii.

Setting up a bank account for your company

Each transaction in a company must be made through a business bank account which can be easily set up in Hawaii, using only the Articles of Organization and submitting the bank’s forms.

How is the tax regime in Hawaii?

The favorable tax regime in the insular state is quite appealing for international investors, and mostly for the convenient corporate income tax ranging from 4.4% to 6.4%. As an example in this sense, the taxable income not exceeding $25,000 is subject to a 4.4% corporate income tax. 6.4% is the rate imposed for taxable incomes of more than $100,000. Here are a few facts to consider about the taxes in Hawaii:

• 4% rate is the standard sales tax established in Hawaii for products and services for sale purposes in this state.
• Some cities enforce additional taxes in order to sustain transportation.
• Personal assets, like cars or boats, are free from taxation in Hawaii.
• Just like most American states, Hawaii does not impose an inheritance tax.

The registration for tax purposes is made in simple steps, once the company is incorporated in Hawaii. For a better understanding of the conditions involved in this matter, foreign investors can talk to our company formation specialists in USA at any time.

At-will condition for LLCs in Hawaii

Limited liability companies in Hawaii may be subject to a particular condition which is usually settled by the owners of the firm. Although it is not mandatory, the shareholders can agree on a date in which the company can be closed or dissolved.

Opening a company in USA may be subject to different policies and protocols, depending on the state of incorporation and the related legislation. Knowing the registration process of a company and receiving support are essential for each entrepreneur, particularly if it is not familiar with the business environment in America. In this situation, we suggest you to talk to our company formation representatives in USA for support and complete guidelines, no matter the chosen state for business.

Applying for the EIN

The Employer Identification Number or simply the EIN is crucial for all companies in USA, including Hawaii, the insular state. This represents the legal form through which the employer pays the social contributions and taxes for the staff of the company. The EIN can be easily obtained through the online forms offered by the IRS (Internal Revenue Service), but for avoiding difficulties, it is best to solicit help from one of our advisors.

Special permits and licenses for your company in Hawaii

The USA company formation comes with several terms and conditions an entrepreneur from abroad should take into consideration. Your business in Hawaii may operate under certain licenses and permits, a concern of the Department of Commerce and Consumer Affairs that oversees such an aspect. It is necessary to have a license to operate in fields like real estate, export and import of plants, quality assurance. The Department of Health, the Professional and Vocational Licensing Division, the Public Utilities Commission, and the Department of Transportation are important institutions which grant diverse licenses and permits.

Do I need insurance for my company in Hawaii?

It is highly recommended to pay attention to the ways in which your business in Hawaii can be protected. A general liability insurance is normally suggested for small and medium entrepreneurs who want to protect themselves from different business risks that might occur. Medical payments, property damages, bodily injury, personal liabilities are among the risks covered by a general liability insurance. Legal defence and judgment are comprised in such insurance which can be signed for your business in Hawaii. As for the risks which are not comprised and protected by a general liability insurance, we mention the intentional acts, damages to customers due to professional advice or the salary payments for fired employees. It is important to protect your company and present confidence in front of the clients with a general liability insurance. In terms of costs, a general liability insurance varies between $300 and $1,000 per year, depending on the business type, the activities and the risk exposure. If you would like to protect your business and you need guidance in this matter, feel free to talk to our consultants.

Do I need accounting services for my business?

Yes, if you do not want to establish an accounting department in your company, you might want to consider the services of a professional accounting firm in Hawaii. It is extremely important to correctly keep the track of the financial operations in the firm, with the help of a specialized accounting company. Tax preparation, bookkeeping, payroll, expense tracking, budget plans and many more enter the area of expertise of an accounting firm. Moreover, an accurate account will let the business owners in Hawaii cut the inappropriate spending, attract investors or apply for bank loans for future investments in the company. With complete accounting services in Hawaii, the shareholders will minimize personal liability and avoid any potential financial risks that might occur. Our local accounting firm in USA is at your disposal, if you are interested in such services for your company in Hawaii.

Get a virtual office for your business in Hawaii

Even though investors are not obliged to relocate in the insular state for incorporation purposes and therefore there is no need for a traditional office, it is suggested to make your presence on the market with the help of virtual office services which are easy to obtain. Our USA company formation specialists can offer you a notable business address in Hawaii, specialized technology for call forwarding, voice mailbox, fax services, and mail forwarding, as part of the virtual office packages provided in the insular state. If a traditional office is not what an entrepreneur needs at the moment, he or she has the possibility of choosing virtual office services at request.

Growing the company in Hawaii

Hawaii offers plenty of business opportunities and there are numerous companies willing to establish their presence on important markets. In this direction, defining the brand with the help of the internet might be the proper solution. This means that the company needs to have a web presence, a Google profile and social media channels for a better level of awareness. The long-term success of a company will depend, in many cases, on the way in which the business is developed on the internet. Luckily, there are varied advertising methods, starting with Google ads and ending with outdoor publicity, mentioning that marketing will play a major role in your company. Presenting the products and the services in a friendly manner on the internet is of high importance at the time you try to define your brand as a new entrepreneur in Hawaii.

It is recommended to plan such strategies at the time the company is formed, in order to develop as much as possible, in a short time. Sectors like tourism, agriculture, retail, manufacturing or the service industry are only a few of the thriving fields in Hawaii and the ones in which international business persons can establish their presence. Hawaii is an appealing business destination from many points of view and opening a company in an easy manner without complexity in terms of documents is one of them.

An overview of the economy in Hawaii

The Aloha State has become famous due to the extremely developed tourism sector which is the engine running the overall economy. But Hawaii offers a distinct economy through sectors like agriculture, manufacturing, the service and accommodation industry, the export trading which developed with numerous countries worldwide. Due to the tropical climate which is beneficial in agriculture, Hawaii is placed in the first position in USA for sugar cane and pineapple production. Honolulu, the capital of Hawaii, Kapolei, Kailua, East Honolulu, Pearl City, Waipahu, Hilo or Royal Kunia are among significant cities in Hawaii and suitable for business purposes and related activities.

Hawaii is an American state where you can start and grow your business in a fast and reliable manner. It is the proper place for foreigners willing to explore the opportunities in the archipelago and to benefit from a favorable tax structure. We invite you to address your inquiries to our team of company formation agents in USA and find out information about how to start a business in USA and about the taxes companies need to pay.

What is the corporate income tax in Hawaii?

A series of marginal tax rates varying from 4.4% and 6.4% is applicable for corporations in Hawaii, as seen in the table below:

Taxable Income                                  Tax Rate
Up to $25,000                                         4.4%
Between $25,000 and $100,000            5.4%
More than $100,000                               6.4%

We mention that companies or business persons who do not have properties in Hawaii, but have sales activities in this state need to consider the alternative tax of 0.5% which is calculated on the gross sale. Also, you can read the general guide to company incorporation in Hawaii if you would like to know more about how you can register a company in this state.

What is the sales tax in Hawaii?

Hawaii imposes a general sales tax of 4% and the good news is that cities do not enforce their own sales tax. The exception of the sales tax structure is the Island of Oahu where an additional 0.5% rate is applicable to sustain the transportation system. The sales tax in Hawaii is imposed on all goods and services sold in this state. Let us remind you that if you are interested in USA company formation, including in Hawaii, our team of consultants are at your disposal.

Other tax facts about Hawaii

There is no property tax imposed on personal assets like boats or cars. As for the real estate properties in Hawaii, including lands owned by foreigners, these are burdened at the fair market value. It is good to know that in Hawaii there is no inheritance tax, just like in most American states. The Department of Taxation in Hawaii is at the disposal of domestic and foreign entrepreneurs who want to pay the taxes and need to submit specific forms.