How to Start a Business in Hawaii
Everything you need to form your Hawaii LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Forming an LLC in Hawaii costs $50 in filing fees. Hawaii charges no sales tax; instead, the General Excise Tax applies at 4.0 percent on gross business income plus a 0.5 percent county surcharge, for a total of 4.5 percent in all four counties.
This guide covers every step from choosing the right business structure to obtaining the licenses you need to operate legally in Hawaii.
Choosing Your Hawaii Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Hawaii small businesses.
| Entity Type | Liability Protection | Taxation | Hawaii Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $50 | $15 Annual Report (Domestic or Foreign... | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $50 | $15 Annual Report of Domestic and Foreign... | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Hawaii Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Hawaii Department of Commerce and Consumer Affairs, Business Registration Division (BREG) database. Reserve for $10 (120 days).
- 3
Appoint a registered agent
Must have a physical Hawaii street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization for Limited Liability Company (Form LLC-1) ($50) or Articles of Incorporation (Form DC-1) ($50) with the Hawaii Department of Commerce and Consumer Affairs, Business Registration Division (BREG).
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Hawaii Department of Taxation (DOTAX). State sales tax rate: None. Hawaii has no sales tax. It levies a General Excise Tax (GET) on the business rather than the customer: 4.0 percent state rate plus a 0.5 percent county surcharge for a 4.5 percent rate on retail goods and services, rents, construction contracting and commissions; 0.5 percent on wholesaling and producing; 0.15 percent on insurance commissions. All four counties (Honolulu, Hawaii, Kauai and Maui) have adopted the 0.5 percent surcharge through December 31, 2030. If GET is visibly passed on to customers the maximum pass on rate is 4.7120 percent..
- 7
Get required licenses and permits
Hawaii has no general purpose state business license, but the DCCA Business Action Center states that all persons doing business in Hawaii must obtain a General Excise Tax license...
- 8
Register for Hawaii taxes
Personal income tax: Graduated. For 2025 the single and married filing separate schedule runs from 1.40 percent on taxable income up to $9,600 to 11.00 percent...
How Much Does It Cost to Start a Business in Hawaii?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Hawaii Department of Commerce and Consumer Affairs, Business Registration Division (BREG)) Required | $50 | BREG does not publish a standard turnaround time for routine filings. |
| Corporation filing fee Required | $50 | If forming a corporation instead |
| Annual Report (Domestic or Foreign... Required | $15 | Due each year by the end of the calendar quarter that matches the quarter of registration. |
| Name reservation | $10 | 120 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | Hawaii has no general purpose state business license, but the DCCA Business Action Center states that all persons doing... |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $50 to $365 |
Start a Specific Business in Hawaii
Hawaii Business Guides
- How to Start an LLC in Hawaii
- How to Start a Corporation in Hawaii
- Sole Proprietorship in Hawaii: How to Start One
- Hawaii Business License: What You Need and How to Get It
- Hawaii Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Hawaii
- Hawaii Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Hawaii
- Hawaii Registered Agent: Requirements and How to Choose One
- Best LLC Services in Hawaii
- Hawaii Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Hawaii
Why Start a Business in Hawaii?
- Forming an LLC or a corporation costs $50.00 plus a $1.00 State Archives fee, one of the lowest formation fees in the country, and both use the same fee.
- The annual report costs $15.00 for both LLCs and profit corporations, and is due by the end of the calendar quarter that matches the quarter the business registered.
- Hawaii charges no sales tax; instead the General Excise Tax applies to gross business income at 4.0 percent plus a 0.5 percent county surcharge, or 4.5 percent, in all four counties.
- The General Excise Tax license is a one time $20 fee with no annual renewal, and it is the only broad state level license a Hawaii business must obtain.
- Hawaii's economy produced $115.6 billion of current dollar GDP in 2024, ranking 40th of the 50 states, with a resident population of 1,432,820 as of July 1, 2025.
- Corporate income tax is graduated at 4.4, 5.4 and 6.4 percent, while personal income tax runs from 1.40 percent to 11.00 percent, the highest top individual rate of any state except California.
Hawaii Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Hawaii?
- BREG does not publish a standard turnaround time for routine filings. Online filing through Hawaii Business Express is the most efficient method available.
- What does it cost to start an LLC in Hawaii in year one?
- The LLC filing fee is $50 plus a $1.00 State Archives fee, and the General Excise Tax license is $20 one time. No annual report is required in the year you register, so the first-year cost is $71.
- Can a non-resident form an LLC in Hawaii?
- Hawaii's LLC formation requirements do not include a residency requirement. You can file your Articles of Organization online through Hawaii Business Express if your business name meets Hawaii's naming standards.
- What is the cheapest way to start a business in Hawaii?
- The minimum cost to start is $50 for the LLC filing fee plus $1.00 State Archives fee plus $20 for the General Excise Tax license, totaling $71. No annual report fee is required in the year you register.
- Is an operating agreement required for an LLC in Hawaii?
- An operating agreement is not a required part of Hawaii's LLC formation. The Articles of Organization is the only formation document required to file with BREG.