What to Know About Opening a Business in Florida
Florida is, for many residents, the ideal place to live. The weather is warm year-round, the beaches and natural outdoor areas are beautiful, and it’s consistently ranked as a good place to start a business or launch entrepreneurial ambitions.
Florida has one of the highest rates of new business creation, and it is home to a significant self-employed population.
If you’re looking for a tax-friendly state, Florida is also ideal in many ways. The state has no personal, death, or capital gains taxes, which is one of the reasons it has attracted not just retirees, but also people looking for a low-cost location to begin or build a business.
The top corporate income tax rate is around 5.5% in the Sunshine State, and unemployment taxes are also among the lowest in the country.
When you’re just starting a business, you’re likely to start small, and in Florida, that’s ideal because more than 72% of the state’s businesses have 20 employees or less.
In 2010, the state had a GDP of $748 billion, which put it at number four of the largest economies in the country.
Other benefits of starting a business in Florida include:
- You have access to a talent, skilled, and diverse workforce. The labor force is the fourth largest in the U.S.
- The infrastructure of the state gives you access to domestic and international markets, as well as to seaports and waterways.
- There is a high quality of life that attracts not just new businesses, but also potential customers.
Some of the primary industries in Florida include:
- Aerospace and aviation
- Defense and homeland security
- Manufacturing
- Life sciences
- Finance and professional services
- Information technology
- Logistics and distribution
- Sustainable technology and energy development
Source: Starting a Business in Florida
The Best Cities to Open a Business in Florida
While many of the advantages of starting a business in Florida relate to statewide issues like taxes, some cities also rank higher than others in terms of business opportunities.
- Orlando-Kissimmee Metro: This is one of the primary tourist hubs in Florida, and along with tourist-centric businesses, this Florida metro area economy is based on technology and innovation.
- Cape Coral-Fort Myers: This area is known for its canals and waterways, and it’s also home to the Florida Gulf Coast University and the Cape Coral Institute of Technology.
- Tampa-St. Petersburg-Clearwater: This is one of the more urban areas of Florida, and along with a low cost of living, it’s also the perfect place to start a business in Florida.
- Naples-Marco Island: Naples is one of the country’s richest cities, and it has the second highest proportion of millionaires per capita in the U.S., which is why it’s optimal for launching and growing a small business.
- Miami-Ft. Lauderdale-Pompano Beach: Miami is perhaps one of the most well-known cities in Florida and the world, and it was host to the Small Business Expo in 2015. It’s home to large multi-national corporations, including the Vector Group and Bacardi, but is also great for small businesses to thrive.
These are of course just a few of the many metros and cities that are prime for opening a business in Florida.
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Ideas for the Best Business to Start in Florida
Before we move on to show you how to start a business in Florida, we first compiled a list of business opportunities that are great in the current economic climate:
- A financial advising firm: Since Florida is home to not only many companies but also a large retiree population, financial advising services are incredibly popular here.
- Tourism-centric businesses: Because Florida is a huge tourist destination, consider creating a service that appeals to these tourists, perhaps offering convenient transportation, concierge, or guide services.
- Restaurants and bars: Many of the popular areas in Florida are centered around a relaxed, laidback lifestyle, and new restaurants and bars can do well in that aspect.
Of course, while these are ideas, you aren’t limited to these categories. Your options for starting a business in Florida are whatever you want them to be.
The rest of this guide is dedicated to showing you how to open a business in Florida.
We’ll outline everything you need to do to operate lawfully in the state and conclude with an easy-to-follow checklist highlighting the most important aspects of how to start a business in Florida.
Choose Your Business Structure
How you will structure your company is one of the most important aspects of starting a business in Florida.
The structure of your business is going to have an impact on many of the financial and operational aspects you face as an owner.
Legal structure options include the following:
- Sole proprietorship: Is exactly what it sounds like: you run your business as yourself, by yourself.
- Partnership: A partnership requires you to file a Certificate of Limited Partnership with the Division of Corporations Florida. Partnerships can take a variety of forms including general partnerships, limited, foreign limited, limited liability, and a limited liability limited partnership.
- Corporation: In Florida, starting a corporation requires filing documents of incorporation or authorization with the Division of Corporations. To file Articles of Incorporation for a for-profit corporation, you’ll need the name of your business, the street address of the principal’s office, the total number of shares the corporation is authorized to have outstanding at any one time, a street address for a registered agent, and the signature of at least one incorporator.
- Limited Liability Company: Any business that plans to do business in Florida as a limited liability company is one that will take advantage of some aspects of a corporation yet holds the legal status of a partnership.
To generalize this part of the process, you’ll need four primary things to create an entity; which are a name, address, a listing of the people who will be managing your business, and the type of entity you’ll be operating.
The most popular type of entity is usually the Limited Liability Company, or the LLC.
Once you choose your type of business, you’ll file the Articles of Incorporation with the Florida Department of Corporations.
Fictitious Names
When you’re starting a business in Florida, you will have to adhere to the Fictitious Names Act (if applicable), which was enacted to ensure a public record of the identity of a fictitious-named owner. This is filed with the Florida Department of Corporations as well.
This is required for anyone who does business under any name other than their personal legal name or a registered corporate name.
You can check the Division of Corporation’s website to see if a fictitious name is already in use, and the goal of this part of opening a business in Florida is also to help prevent name infringement.
You can register a name at sunbiz.org, and your registration must be renewed every five years. If ownership of the name changes, re-registering is required. You must also register fictitious names even if the two names are incredibly similar. Even the slightest discrepancy requires this step.
Regarding general business naming, before you decide on one, conduct a Florida business entity search to make sure the name is not already in use. This can be done very simply by visiting the website of the Florida Department of Corporations.
Opening a Bank Account
Once you have a name, and you’ve registered your entity, you can open a bank account.
The name of your bank account should match the exact name of your entity.
This is also the time you would likely obtain a federal Employer Identification Number (EIN) from the IRS, although you may not do this is your LLC only has one member. If this is the case, you will use your Social Security number for your transactions.
If you’re registering as a corporation, you’re required to use an EIN.
Obtaining a General Business License in Florida
When you open a business in Florida, you will need a general business license, which is also called a business tax receipt.
To obtain a business license in Florida, you will typically register with the tax collector’s office in the county you’ll be doing business. If you’re doing business in some cities, you may also need to complete a Florida business registration there that will allow you to obtain a business license for that location as well.
If you need to learn more about a business license in Florida, you can contact your county tax collector or the Florida Department of Revenue.
Some locations allow for Florida business registration online, and the cost of your business tax receipt is going to depend on the county, the type of business, regulatory issues, and zoning.
When you obtain your business license in Florida you’ll need:
- Your name
- The fictitious name of your business if applicable
- Corporate documents
- Your federal tax ID number
- A copy of your Social Security card
- Your industry code—as defined by the North American Industrial Classification System
- Proof of any professional or commercial certifications or licenses pertinent to your industry
Some of the other licenses or permits you might need as you start a business in Florida include:
- A zoning permit: This is required by most counties and cities in Florida, and you have to obtain it before you receive your business license in Florida.
- State and professional licenses: Nearly 200 individual professions or industry categories require you to get a state license from the Florida Department of Business and Professional Regulation. There are also many requiring registration, permitting, or licensing from the Florida Department of Agriculture and Customer Services.
- Florida Department of Health licenses: This is required for any healthcare business in the state.
Other possibly pertinent are beverage licenses, health permits and licenses, and retail establishment licenses.
If your business is even potentially a polluting source, you’ll be required to adhere to environment regulations, and you must apply for permits and licenses through the Florida Department of Environmental Protection.
The best way to determine which permits and licenses you need is to conduct a Florida business license search, which will show you everything that applies to your particular location and industry.
Taxes
When you’re deciding to open a business in Florida, you may be subject to paying different taxes, which depend on factors such as your location and your industry.
Some of these possible taxes include:
- Sales and use tax: This is required if your business will have taxable transactions. If so, you need to register with the Department of Revenue before you begin operating in the state of Florida.
- Reemployment tax: This was once known as the unemployment tax, but it’s not something every business has to pay. Visit the Department of Revenue’s reemployment tax page to determine if you’re required to do so.
- Corporate income tax: You’ll be required to file a Florida corporate income tax return if you’re doing business in the state.
- Other possible taxes: Fuel, insurance premiums, pollutants, communication services, severance, solid waste, and surcharge taxes may apply.
Your Requirements as an Employer
If you’re planning to start a business in Florida and you’re going to have employees, there are some things to consider here as well.
- Research IRS regulations on withholding employee taxes.
- Employees are required to sign a W-4 form, which the employer then submits to the IRS.
- Form I-9 is the employee eligibility verification form, which proves employees are eligible to work in the U.S.
- You’re required to provide information about new hires within 20 days of employment to the Florida New Hire Reporting Center.
- If your business has employees, you’re required to pay unemployment compensation tax.
- You must provide worker’s compensation insurance.
A Checklist for Starting a Business in Florida:
- Decide on a legal structure. Conduct a Florida business entity search by visiting the Florida Department of Corporations website. The most common choices in Florida are a corporation, LLC, or partnership.
- To form a corporation or LLC, you’ll need to file the Articles of Incorporation or Organization with the Florida Department of Corporations.
- You’ll need to have a name for your business, which shouldn’t already be taken. To check, conduct an entity search.
- If you’re doing business under a name different from your own, you must file a fictitious name registration with the Florida Department of State, Division of Corporations. If you’re operating as a corporation, you can skip this step unless you’re doing business under a name unique from your corporate name.
- Open a bank account in the name of your entity.
- Request an IRS Employer Identification Number, unless you’re operating a business consisting of only yourself.
- Contact your municipal and county government offices to obtain a business tax receipt, which is a business license in Florida.
- Conduct a Florida business license search to see if any other permits, licenses, or certifications are required in your industry.
- Obtain a sales tax number from the Florida Department of Revenue.
- Hire employees, following guidelines and tax regulations. Ensure employees are registered with the state of Florida.
- Make sure you’re aware of all taxes your business is required to pay at a local, state, and federal level.
It’s our goal that this guide serves as a foundation as to how to start a business in Florida, from the initial creation of a structure and name to the hiring of employees and the payment of taxes.
If you’re planning to start a business in Florida, this guide can serve as your resource throughout the process, whether you’re registering with the Florida Department of Corporations or you’re working at the local level to obtain a business license in Florida.
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