Serving business owners since 2007
Incorporate in Hawaii
Is Hawaii small business friendly?
FREE business incorporation, including registered state agent
Just pay state fees, order in 5 minutes or less
Hawaii’s relaxing natural landscape and vibrant culture make it a tempting location for many aspiring small business owners.
Before forming a corporation in Hawaii, you should understand the local culture and current business demographics. Remaining culturally sensitive and forming close bonds with the community is essential to success.
Our data can provide more insight into Hawaii’s business demographics during your incorporation. A better understanding of this data will be helpful when strategically positioning yourself in the Hawaii market.
As of 2023, 99.2% of all companies run in Hawaii are small local businesses. These businesses vary in industry, though popular options include the tourism, agriculture, real estate, and renewable energy industries.
Women own a large portion of the businesses in Hawaii at 56,861 and co-own 5,929 firms. This number is close to the 72,628 male-owned companies, showing that women can successfully run businesses in Hawaii.
Veterans only own 9,201 businesses in Hawaii, while non-veterans own 126,294. Despite Hawaii not being a prevalent location for veteran-owned businesses, veterans’ skills, experiences, and discipline can give them a unique perspective in the market.
Hispanic people own 8,014 businesses in Hawaii, while non-Hispanic people own 127,099. While this number may seem small, the number of Hispanic-owned companies grows yearly.
Racial minorities own 86,590 and co-own 2,080 businesses in Hawaii. Hawaii is the only state where most small businesses are owned by minorities, with the following closest options being Texas and California.
See the full range of features, benefits, and pricing tailored to your needs.
Incorporate in Hawaii with MaxFilingsIs Hawaii a good place to start a business?
While Hawaii is a tempting location to create a new business, it is essential to note that some demographics may find it more challenging to incorporate and have success. Hawaii has one of the lowest veteran-owned markets in the United States. Hawaii also has a smaller population, limiting the potential customer base and the business’s ability to grow.
Despite these downsides, Hawaii offers new business owners many unique opportunities thanks to its high tourist market and various natural and cultural attractions. Businesses that want to thrive in Hawaii must also be environmentally friendly and understand the local culture to form strong community relations.
More credibility means more access to capital
Incorporating your business will make it appear more trustworthy than sole proprietorships and partnerships. A more professional appearance gives these businesses access to more customers, investors, and funding to help them expand the business.
Strong limited liability protection
Incorporated businesses are separate from their owners, providing additional protection from legal complications and debts. Because of this separation, business-related lawsuits cannot cause the owners’ assets to be seized.
Tax benefits
Business owners who incorporate their companies have additional tax benefits not provided to sole proprietorships or partnerships. Businesses that incorporate as LLCs can choose what entity they want to be taxed as. This extra flexibility allows them to save more money on their taxes.
Many business opportunities
Hawaii’s relaxing natural attractions and recreational activities draw in a large population of tourists. Hawaii also offers many programs and incentives to new business owners to help them start their companies:
- The Hawaii Small Business Innovation Research Program allows small businesses in Hawaii to win federal research and development awards. This program has three separate phases, each with varying grant opportunities.
- The Hawaii Enterprise Zones Partnership is a joint state-country initiative to encourage business growth, job security, and job creation in Hawaii. Some benefits of these initiatives include business benefits and reduced tax burdens for up to seven years.
- The Hawaii State Trade Expansion Program offers training regimens to small businesses interested in exporting their sales.
- Motion Picture, Digital Media & Film Production Income Tax Credit is a refundable credit that funds production for entertainment and commercial companies.
- The Renewable Energy Permitting Wizard is a program that aims to aid businesses that focus on creating renewable energy projects in understanding the requirements for taking on these types of projects.
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Business tax climate info stats
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|---|---|---|---|---|---|
| 42 | 11% | 4.40% | 4.00% | 0.50% | 4.50% |
| Overall rank | Individual income tax | Corporate income tax rate | State sales tax rate | Maximum local sales tax rate | Combined state & average local sales tax rate |
https://taxfoundation.org/location/hawaii/
Overview of business structures in Hawaii
Business structure |
Management |
Liabilities |
Taxes |
|---|---|---|---|
| Sole proprietorship | The sole owner manages everything | Personal liability for business and debts | Taxed at personal tax rate or self-employment taxes |
| Partnership | Two or more owners share management | Partners are liable for debts and liabilities (Excluding limited partners) | Partners taxes separately on their share of the business income |
| Hawaii LLC | Member-managed or manager-managed | Limited liabilities for members | Pass-through taxation (profits/losses reported on personal tax returns), or can elect to be taxed as a corporation |
| Hawaii S corp | Board of directors, officers, and shareholders play a role in management | Limited liability on investments | Pass-through taxation (no corporate tax, profits reported on personal tax returns) |
| Hawaii C corp | Board of directors, officers, and shareholders play a role in management | Limited liability on investments | Double taxation: the corporation pays corporate taxes, and shareholders pay taxes on dividends |
| Hawaii nonprofit | The board of directors and officers play a role in management | Limited liability for directors and officers | Tax-exempt status granted by the IRS; donations may be tax-deductible |
Explore more about Hawaii incorporation
Hawaii offers many benefits for new businesses, but it’s essential to consider both the advantages and challenges. Learn more about incorporation in Hawaii and determine if it’s right for you.
Hawaii C Corp Formation
Discover all the essentials for establishing a C corporation in Hawaii and explore how Hawaii’s business-friendly environment makes it a top choice for incorporation.
Hawaii S Corp Formation
Explore the process of establishing a Hawaii S corporation. This straightforward guide will outline the required steps and highlight the advantages of choosing an S corporation for your business.
Hawaii LLC
Formation
Explore how to form an LLC in Hawaii. This guide will help walk you through the incorporation process and show you this business structure’s unique opportunities and advantages.
Hawaii Nonprofit Formation
Are you interested in creating your nonprofit organization in Hawaii? Learn more about the advantages and unique opportunities for making a difference in the Aloha State.
Do I need to incorporate my business?
While it is usually ideal for businesses to incorporate, sometimes they will not benefit from it. Check out our guide on who should incorporate to determine if incorporation is right for you.
How do I set up a business in Hawaii?
To incorporate your business, you must understand specific state laws and take critical steps to complete the process correctly. Each business structure requires different steps, so knowing which entity you will incorporate is best.
We recommend consulting a professional with legal or tax questions before starting the process.
If you’re ready to start creating your business, MaxFilings offers affordable professional services to help walk you through the process.
MaxFilings can provide you with a high-quality and accessible incorporation experience. Our team will guide you through the process and help you file all the required paperwork.
Our basic incorporation package is free—you only pay state fees.
You’ll also get one free year of registered agent service at no additional cost.
MaxFilings business incorporation aims to provide the best incorporation experience without unwanted surprise charges.
Let us handle the paperwork while you focus on growing your business.
At MaxFilings, we are committed to supporting you every step of the way.
