Rhode Island or the Ocean State, as it is known, has important exits to the Atlantic Ocean which make the trading sector a prolific one, considering the business relations across the Ocean. We have prepared a general guide to company incorporation in Rhode Island and we invite you to find out details about how you can set up a business in this state. Our company incorporation agents in USA can offer in-depth information about the registration process with the authorities and the requirements in this sense.

How to start an LLC in Rhode Island

The suitable business form in Rhode Island can be the limited liability company which can be incorporated at the Business Division of the Secretary of the State of Rhode Island. The main documents of such entity are the Articles of Association which contain information like:

• the name and the nationality of the owners of the new company;
• the name of the company after a verification in this sense;
• the type of the activities of the new business in Rhode Island;
• the name of the appointed registered agent of the company;
• the business address of the limited liability company in this state;
• the board of managers and the effective date when the business enters the market.

If you would like to appoint a registered agent for your LLC in Rhode Island, you can talk to our team of advisors who can help you in this sense. Moreover, it is good to know that another company may act as a registered agent for a business in Rhode Island.

Create an operating agreement for your LLC

If you want to start a company in USA, it is recommended to sign an operating agreement, an internal document which offers information about the liabilities of the owners, their voting rights, the capital contributions in the firm, working relations between members and details about how the dissolution is made.

How can I obtain the EIN for my company?

The EIN (Employer Identification Number) is issued by the Internal Revenue Service (IRS) and represents the federal tax ID which demonstrates that the company is a taxpayer. In this matter, a business bank account and the company’s documents are necessary when applying for EIN in Rhode Island.

Taxes in Rhode Island

The sales tax in Rhode Island is set at 7%, and the income tax ranges between 3.75% and 5.99% as follows:

TAX RATE INCOME

• 3,75% up to USD 60,550
• 4,75% between USD 60,551 – 137,650
• 5.99% over USD 137,651

The property tax is imposed on personal assets in Rhode Island and collected by the municipality where the company is established.

Licenses and permits for your business in Rhode Island

The Chamber of Commerce and the Small Business Administration are two important authorities which issue the necessary licenses for business owners in Rhode Island, in compliance with the governments’ rules and regulations. Instead of wondering what type of license you need before opening a company in USA, it is best to address your inquiries to our team of advisors.

Do I need the services of an accounting firm in Rhode Island?

Yes, it is mandatory to ask for complete accounting services in Rhode Island for your new company. Payroll, bookkeeping, the annual financial statements, tax advice and tax minimization methods are a few of the important accounting matters suggested for any type of business in USA.

Legal conditions for hiring staff in Rhode Island

If an investor decides to hire local or foreign workforce, a verification in this matter is necessary, to see if the future employees can work in the USA. The next step is to register the employees with the authorities in charge and to pay the social contributions and the taxes in this sense.

Economy facts about Rhode Island

The economy in Rhode Island has a solid engine and that is textile industry, shortly followed by the fishing sector which is also extremely developed, considering the location of this state. Providence is the capital of Rhode Island and a significant business center which hosts numerous large companies from abroad. Newport, Bristol, Warwick, Westerly and Cranston are important cities in Rhode Island where foreign investors can easily set up their operations.

Companies in Rhode Island are not subject to the franchise tax which was eliminated in 2015. However, investors in Rhode Island should consider the business corporation tax which is at a flat rate of 7%. Our company formation specialists in USA are at the disposal of foreign and local business persons who are interested in establishing their activities through different types of entities for which specific taxes are imposed.

What is the business corporation tax rate in Rhode Island?

7% flat rate represents the business corporation tax in 2018 for C corporations established in Rhode Island. As for S corporations, these are subject to a minimum corporate tax of $400. As an example in this sense, if an S corporation had a net income of $200,000 in 2018, the business corporate tax is $400. However, these kinds of companies are considered pass-through entities, just like the limited liability companies, where the business income tax is paid by each shareholder on his/her share of the company’s profits.

How is the personal income tax levied in Rhode Island?

The personal incomes in Rhode Island are levied with a tax ranging from 3.75% to 5.99%. Please note that our team of consultants is at your disposal with broad information about the taxes you need to pay for your company in Rhode Island. The same team can help investors start a business in USA in any chosen state for business. The table below explains the personal tax rates in Rhode Island:

Taxable Income Tax Rate
For the first $60,550: 3.75%
Between $60,551 and $137,650: 4.75%
For more than $137,651: 5.99%

Taxes for partnerships in Rhode Island

The profits of general partnerships in Rhode Island are distributed to each partner who must pay the taxes imposed on the calculated amount of profit. The tax rate will vary depending on a partner’s overall taxable income registered in a year.

What is the sales tax rate in Rhode Island?

The general sales tax in Rhode Island is set at 7% rate for goods and services for sale purposes in this state. Please bear in mind that the use tax is collected in Rhode Island if personal properties are acquired outside the state, but destined for consumption in Rhode Island.

The property tax in Rhode Island

1.65% represents the property tax rate imposed on the price of the acquired property in Rhode Island. Even though it is the highest tax rate imposed on properties in this state, foreign investors are extremely attracted to the real estate market whether for personal matters or for business purposes. Feel free to ask us any questions about the taxes you must pay if you have a company in USA, including Rhode Island. You can also solicit information about how you can open a business in USA.

Tax deductions for citizens in Rhode Island

It is good to know that recorded deductions are not accepted in Rhode Island, however, the typical deduction in this state is set at $8,300 for single filers and married persons filing separately. No more than $16,600 is applicable for joint filers and qualifying widowers. As for heads of households in Rhode Island, they can deduct $12,450. Taxpayers in Rhode Island are entitled to claim credits for child and dependent care overheads which are equal to 25% of the particular federal credits.

Other tax facts for Rhode Island

Entrepreneurs who decide on opening more than just one company in USA should consider that they will be subject to nexus. This means that, besides the taxes paid for having a company in Rhode Island, entrepreneurs will have to pay the taxes in other states too, if they have registered companies there. Even if your company is registered with a business office in a specific state, but generates profits in Rhode Island, you should consider the tax obligations in this state. Alcohol tax, cigarette tax and gas tax are also important to consider at the time you decide for doing business in Rhode Island.

We remind that you can read the general guide to company incorporation in Rhode Island and find out a series of details about how you can set up a company in this state, with comprehensive assistance and guidance provided by our team of consultants. It is also extremely important to solicit information about the taxes imposed for all kind of companies with establishments in Rhode Island.