North Carolina is known for its mountains and scenic coastlines, but it’s also an excellent state for starting a business—thanks to its business-friendly climate, grants for growing businesses, and an economy that welcomes fresh ideas. In 2024, North Carolina announced 16,956 new jobs. With a highly regarded local workforce and a variety of networking groups, North Carolina has something for nearly any type of business.

Below, we’ll explain how to start a business in North Carolina, including choosing a business name and managing day-to-day finances.

What’s in this article?

• Why start a business in North Carolina?
  
• What are the legal steps to start a business in North Carolina?
  
• What are the biggest industries in North Carolina?
  

Why start a business in North Carolina?

Here are a few reasons why entrepreneurs find North Carolina a good fit for their business:

Tax benefits and incentives

The state offers programs that encourage new ventures and expansions. For example, North Carolina’s 2.25% corporate tax rate is one of the lowest in the country, which can help keep your operating expenses manageable. County-level economic development offices also extend grants or specialized training in particular fields to encourage local hiring.

Strong workforce

Major universities, including Duke, North Carolina State University, and the University of North Carolina at Chapel Hill, attract diverse student populations and research funding. Those institutions produce graduates ready to enter fields such as software development, data analytics, and life sciences. Businesses can access a workforce with expertise in engineering, healthcare, and other advanced fields.

Mix of urban centers and smaller towns

Raleigh, Charlotte, and Durham are the state’s urban centers, and each has a lively tech scene and strong real estate market. Asheville and Wilmington provide a more relaxed setting without sacrificing access to important resources.

Biotech, manufacturing, and more

Life sciences and technology receive plenty of attention in the state, and manufacturing remains strong in textiles, automotive parts, and other products. There’s also an active tourism sector, especially near the beaches, mountains, and historical attractions. These clusters create a wide-ranging environment for new businesses, offering networking opportunities and potential collaborations.

What are the legal steps to start a business in North Carolina?

Forming a business involves filing with the government, obtaining a tax identification number, and registering to collect tax. Below are the steps you’ll take to make your venture official with the state.

Pick a business name

Your business’s name is your brand’s first impression, and it needs to meet state regulations. Check the North Carolina secretary of state’s business registration search to confirm the name you want isn’t being used.

LLCs must include “LLC” or “Limited Liability Company” in the name. Corporations are required to include “Incorporated,” “Corporation,” or an abbreviation. Don’t use the terms “bank” or “insurance” unless you’re in those industries because they require special approval.

If you aren’t ready to file, you can reserve your chosen name for a fee to lock it in for 120 days. You can apply to reserve the name online or by mail.

Choose the proper business structure

The legal structure you select determines your taxes, liability, and daily operations, so consider consulting an attorney or tax adviser if you’re unsure which to choose. North Carolina supports these options:

• Sole proprietorship: This simple structure requires zero or little paperwork, but it provides no personal liability protection. Sole proprietorships are best for very small operations.

• LLC: This structure shields you from personal liability and allows for more flexible management and taxation. LLCs are a common choice for small to mid-sized businesses.

• Corporation: This structure is ideal for businesses planning to scale or seek outside investment, but it requires meeting several conditions, such as assembling a board of directors and hosting annual shareholder meetings.

• Partnerships: General or limited partnerships are also available in the state and have varying levels of personal liability.

Register with the North Carolina secretary of state

Most businesses must register with the secretary of state’s office if they plan to do business in North Carolina. Filing details and fees vary based on how your business is structured. Here’s what’s required for each business structure:

• LLCs: To form an LLC, file Articles of Organization with the secretary of state online or by mail. You must include your business’s name, your registered agent’s details, and your principal office address.

• Corporations: File your Articles of Incorporation with the secretary of state. Include the number of authorized shares, incorporator names, and information for the registered agent.

• Sole proprietors and general partnerships: Though these structures don’t require a state filing, you’ll need to file a “Doing Business As” (DBA) name with your local county register of deeds if you’re operating under a name other than your own.

Secure an EIN from the IRS

An Employer Identification Number (EIN) acts as your business’s federal tax ID number. You’ll need it to open a bank account, hire employees, and file taxes. You can apply online using the IRS’s online application. The process is free and takes about 10 minutes. You can also apply by phone, fax, or mail, but processing will take longer.

Sole proprietors with no employees and no separate business bank account can use their Social Security number (SSN) instead, but an EIN adds a layer of privacy and professionalism.

Register for state taxes

Most businesses must register with the North Carolina Department of Revenue (NCDOR) for state taxes. If you plan to sell products, hire employees, or provide taxable services, you’ll probably need a state tax ID. Use NCDOR’s online registration, which lets you file and pay sales tax, withholding tax, and other business-related taxes.

North Carolina’s current sales tax rate is 4.75%, but local rates vary by county. If you’re selling products, you’ll need to collect and remit sales tax.

Get local licenses or permits

Business licenses and permits vary widely depending on your location and industry. Check with your county and municipality for specifics, which can include:

• Food and beverage: Restaurants and food trucks must pass health inspections and obtain food service permits through the local health department. Alcohol sales require separate permits from the NC Alcoholic Beverage Control Commission.

• Construction: Builders and contractors need to be licensed by the state and might also be required to have local trade permits to operate.

• Home-based businesses: Some cities, such as Raleigh, require zoning permits for certain home-based operations.

• General licensing resources: Business license offices can offer guidance for a variety of industries.

Open a business bank account

Even if you’re running a small operation, it’s wise to open a business bank account to keep your personal and business finances separate. When you apply to open an account, most banks will ask for:

• Your EIN (or SSN for sole proprietors without an EIN)

• Filed Articles of Organization/Articles of Incorporation or DBA certificate

• A government-issued ID

Search for a bank with low fees and special features for small businesses, such as free deposits or accounting integrations.

Consider business insurance

Protect your business from potential lawsuits and unexpected losses with business insurance. Though not all coverage is mandatory, you should evaluate these options:

• General liability insurance: This covers property damage, bodily injury, and legal fees.

• Workers’ compensation insurance: This is required if you have three or more employees.

• Professional liability insurance: This protects service-based businesses from negligence claims.

• Business property insurance: This is ideal for retail, office, or industrial locations.

Meet annual requirements

Your responsibilities don’t end with registering your business. North Carolina has ongoing compliance rules that businesses must satisfy, depending on your business structure. These include paying annual filing fees and filing annual reports to keep registration active with the secretary of state. You can file online or by mail, and the due date is April 15 each year. Certain permits, such as health or zoning licenses, must also be renewed every year or two.

What are the biggest industries in North Carolina?

North Carolina has strategically invested in certain industries, which has created fertile ground for specific sectors to grow. Here are some of the biggest industries in North Carolina:

Biotechnology and life sciences

North Carolina is a biotech hub anchored by Research Triangle Park (RTP), the largest research park in the US. Located near Raleigh, Durham, and Chapel Hill, RTP houses more than 300 businesses, from startups to global giants such as Biogen and Syngenta. RTP’s proximity to top universities fuels innovation with a steady stream of talent and groundbreaking research.

If you’re starting a pharmaceutical, agricultural biotech, or medical device business, North Carolina has tax incentives and a well-established network to help you scale. The state also leads in gene therapy and vaccine development.

Manufacturing

North Carolina has changed the face of manufacturing, with a leaner sector that focuses on advanced technologies. Though the state’s roots in textile manufacturing are still alive, factories now are more likely to produce aerospace components, electric vehicle (EV) parts, or robotics.

North Carolina is connected to the East Coast’s central transportation hubs. Charlotte, for example, sits at the crossroads of major interstates and rail lines and has an international airport. This logistics advantage powers the manufacturing industry, particularly in these specialized fields:

• Automotive: The automotive sector comprises businesses such as Thomas Built Buses (a subsidiary of Daimler) and Toyota’s EV battery plant in Randolph County.

• Aerospace: Spirit AeroSystems and Honeywell Aerospace anchor the aviation industry in the state.

• Furniture: High Point hosts the High Point Market twice a year, which attracts customers and designers from around the globe.

Technology

North Carolina’s tech sector isn’t confined to Raleigh and Durham; Charlotte and Asheville are home to startups in fintech, environmental tech, and clean energy:

• Fintech in Charlotte: As the second-largest banking hub in the US, Charlotte is a fintech magnet. Startups draw on the city’s financial infrastructure to improve digital banking, payment systems, and blockchain solutions. LendingTree, AvidXchange, and other businesses call Charlotte home.

• Tech startups in Asheville: This scenic mountain town attracts green technology businesses focused on sustainable energy, water purification systems, and environmental monitoring tools. Asheville offers a supportive entrepreneurial community and access to environmentally conscious investors.

Tourism and hospitality

North Carolina’s geography, which includes a mix of mountains, rolling farmland, and more than 300 miles of coastline, supports a year-round tourism economy. Tourists are most drawn to:

• Outer Banks and coastal towns: The Outer Banks attract millions of visitors each year for their beaches, lighthouses, and history (think the Wright brothers and Roanoke Island). Tourism-related businesses, including tour operators, boutique hotels, and more, can be highly successful there.

• Asheville and the Blue Ridge Mountains: Asheville is a haven for breweries, farm-to-table restaurants, and art galleries. It draws visitors with events such as the LEAF Global Arts Festival and its proximity to the Great Smoky Mountains National Park. The Blue Ridge Parkway is another driver for scenic tourism.

• Film-driven tourism: Wilmington, sometimes called “Hollywood East,” is a hub for film productions. Fans of Dawson’s Creek, One Tree Hill, or even Iron Man 3 often visit filming locations, which creates opportunities for tour guides and themed businesses.

Agribusiness

North Carolina’s agriculture sector is a multibillion-dollar industry that goes far beyond traditional farming. Ag-tech innovations have positioned the state as a leader in precision agriculture, indoor farming, and food technology.

North Carolina produces goods including sweet potatoes (it’s the nation’s leading producer), pork, and poultry. Businesses such as AgBiome, based in RTP, are at the forefront of developing biological crop protection solutions. Other niches to explore include:

• Craft beverages: Breweries, wineries, and distilleries benefit from local farms that grow hops, grapes, and botanicals. Asheville alone is home to dozens of breweries.

• Specialty foods: Entrepreneurs who make gourmet products—such as hot sauces, artisan cheeses, or heritage grains—have found success in local farmers’ markets and through ecommerce.