Starting a corporation in Hawaii means creating a new legal entity that can exist on its own, grow beyond you, and operate with the kind of structure investors, lenders, and partners take seriously. Setting up shop in Hawaii is smart for businesses that operate in the Asia-Pacific region, given Hawaii’s strategic location. To incorporate in the Aloha State, you need to decide what type of corporation to form, how to stay compliant, and how to keep your business running after you’ve filed.

Below, we’ll cover how to incorporate in Hawaii, including what it costs, what it requires, and what steps you’ll need to take.

What’s in this article?

• What does it mean to incorporate a business in Hawaii?
  
• What’s the difference between an S corporation and a C corporation?
  
• What are the advantages of forming a corporation in Hawaii?
  
• What are the steps to incorporate your business in Hawaii?
  
• What are the legal requirements to incorporate in Hawaii?
  
• How much does it cost to incorporate in Hawaii?
  
• How Stripe Atlas can help
  

What does it mean to incorporate a business in Hawaii?

Incorporating in Hawaii turns your business into its own legal entity that can own property, sign contracts, be sued, and pay taxes in its own name. That separation limits personal liability, creates a formal governance structure (made up of shareholders, directors, and officers), and gives the business continuity beyond any one founder, so your entity continues to exist even if ownership changes.

Hawaii requires every domestic profit corporation to file articles of incorporation with the Department of Commerce and Consumer Affairs, Business Registration Division (BREG). You can incorporate as an S corporation (S corp) or a C corporation (C corp).

What’s the difference between an S corporation and a C corporation?

In Hawaii, the formation process and corporate formalities are the same. The differences between C corps and S corps lie in tax treatment and ownership rules.

• C corp: The default C corp pays income tax on profits, and shareholders pay tax again on dividends. C corps can have unlimited shareholders, multiple share classes, and institutional or foreign investors. Hawaii administers corporate income tax through the Department of Taxation.

• S corp: If you elect S corp status, profits and losses pass through to shareholders’ personal tax returns. Hawaii recognizes the federal S election and requires no separate state election. S corps must meet federal eligibility rules: fewer than 100 shareholders, one class of stock, and all shareholders must be US citizens or residents.

What are the advantages of forming a corporation in Hawaii?

Forming a new business in Hawaii can be a wise move, one that can make you eligible for a variety of tax incentives.

Incorporating in Hawaii offers these benefits:

• A gateway in the Asia-Pacific region: Being incorporated in Hawaii gives you a US presence in a strategic location between the continental US and Asia, which can help if you plan to import or export, serve Asia-Pacific markets, or pursue cross-border partnerships.

• Access to the Enterprise Zones Partnership Program: If your business operates in eligible zones and meets hiring and gross receipts thresholds, you might qualify for up to 100% exemption from the Hawaii General Excise Tax (GET) for up to 7 years, plus state income tax credits of 80% in the first year, dropping gradually.

• Targeted tax credits and incentives: Beyond the Enterprise Zones, Hawaii offers research and development (R&D) tax credits for qualified high-technology businesses and film and digital media production credits.

• Local brand clarity: Incorporating in Hawaii can give you stronger credibility among Hawaii-based customers, with local government contracts, and in tourism-driven markets. Product or service businesses anchored on the islands might look to establish island-specific supply chains.

What are the steps to incorporate your business in Hawaii?

To incorporate in Hawaii, follow these steps:

1. Choose and check your corporate name: Pick a unique name that includes a corporate identifier (“Corporation,” “Incorporated,” or “Limited” or an abbreviation such as “Corp.,” “Inc.,” or “Ltd.”). You can search availability online via Hawaii Business Express (HBE).

2. Appoint a Hawaii registered agent: List a registered agent with a physical street address in Hawaii (no PO Boxes). The agent is an individual or entity authorized to do business in Hawaii who consents to accept legal papers on behalf of the corporation during business hours.

3. Prepare your articles of incorporation: On Form DC-1, you provide the corporate name, principal office mailing address, number of authorized shares (and class information if you use multiple classes), registered agent name and address, and incorporator(s).

4. File with BREG and pay fees: You can submit by mail, email, fax, or in person, but filing online through HBE typically has the fastest turnaround time, usually 3 to 5 working days. Upon acceptance, the state date-stamps your articles with your official incorporation date.

5. Hold your organizational meeting: Adopt bylaws, appoint directors (if not named in the articles) and officers, authorize share issuances, approve your fiscal year, and adopt banking resolutions. Keep minutes of the organizational meeting, and set up your stock ledger.

6. Issue shares and document ownership: Prepare stock certificates if you use paper or record electronic issuances. You must continually maintain your shareholder register.

7. Register for Hawaii taxes: Register with the Hawaii Department of Taxation for a GET license and any other applicable accounts, such as withholding.

8. Elect S corp status if you qualify: If pass-through taxation fits your goals, file IRS Form 2553 to become an S corp. The federal election governs in Hawaii, so you don’t have to separately elect state tax status.

9. Open your business bank account: Use your articles and board resolution to open bank accounts and keep finances separate from your own.

10. Remember your Hawaii annual report: File your annual report in your anniversary quarter every year. Late filings accrue a $10 penalty per year delinquent.

What are the legal requirements to incorporate in Hawaii?

After incorporation, you must stay compliant to preserve good standing and maintain your liability shield.

Here’s what that entails:

• Maintain a registered agent in Hawaii: The agent must be physically present in the state to receive service of process. If your agent changes or moves, file the appropriate change form with BREG to update the public record.

• Create and keep internal records: Hawaii doesn’t require you to file bylaws or minutes, but you must adopt bylaws, hold board and shareholder meetings as required, keep minutes, and maintain a shareholder register and accounting records. These records demonstrate corporate separateness.

• File the annual report on time: File annually during the quarter of your registration anniversary. Extended failure to file can lead to administrative dissolution.

• Keep your articles current: If you change your name, share structure, or other important provisions, file an amendment with BREG using the appropriate form.

• Meet tax filing obligations: C corps file Hawaii corporate income tax; S corps file Form N-35 and pass income through to owners.

How much does it cost to incorporate in Hawaii?

Incorporation in Hawaii can be relatively affordable, but you might incur additional costs for expedited processing or professional services.

Here’s the typical cost for a domestic profit corporation:

• Articles of incorporation: Filing Form DC-1 incurs a $50 state fee plus a $1 archives fee. Optional expedited review costs $25. Certified copies of your articles are $10 plus 25¢/page if you need them.

• Annual report: The fee for filing the annual report online is $12.50. A $10 late charge applies for every year you’re delinquent.

• Registered agent service: Hiring a commercial agent typically costs $100–$300 per year.

• GET license: Filing for a GET license with the Department of Taxation costs $20.

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