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Doing business in

Virginia

Navigate Virginia’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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Business Overview

Virginia offers diverse business opportunities in defense, technology, financial services, and logistics. The state provides access to federal government markets, a highly educated workforce, and competitive business costs. Its strategic East Coast location and port facilities support international trade.

Key Facts & Figures

Category Details
Capital Richmond
Major Cities Virginia Beach, Norfolk, Chesapeake, Richmond, Newport News
State Sales Tax Rate 5.3% (includes 1% local tax)
Local Sales Tax Rate Up to 0.7% additional regional taxes
Corporate Income Tax Progressive from 6% to 8.5%
Physical Nexus Threshold Physical presence through employees, offices, or inventory
Economic Nexus Threshold $100,000 in annual sales or 200 transactions

Did you know?

Virginia hosts the largest concentration of technology companies and defense contractors in the United States.

Setup & Compliance

Virginia provides streamlined business registration with moderate regulatory requirements.

Setting Up a Virginia Business:

  1. Select Your Business Structure: Consider tax implications and liability protection needs.
  2. Register Your Business: File formation documents with the Virginia State Corporation Commission.
  3. Register for Tax Accounts: Register with the Department of Taxation for sales tax and withholding.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Virginia Employment Commission if hiring employees.

Key Compliance Requirements:

  • Annual Reports: Virginia entities must file annual reports with the State Corporation Commission.
  • Annual Registration Fee: Businesses pay annual registration fee based on entity type.
  • Sales Tax Collection: Collect and remit 5.3% state sales tax (includes 1% local) plus additional regional taxes.
  • Corporate Income Tax: Corporations pay 6% corporate income tax.
  • Business, Professional and Occupational License (BPOL): Many localities require BPOL tax based on gross receipts.

Hiring & Payroll

Virginia balances business interests with moderate worker protections.

Virginia Payroll Requirements:

  • Unemployment Insurance: Rates from 0.1% to 6.2% on first $8,000 of wages.
  • State Income Tax Withholding: Required with progressive rates.
  • Workers’ Compensation: Required for most employers.

Virginia Employment Laws:

  • Minimum Wage: $12.00 per hour (as of 2023).
  • No state-mandated paid sick or family leave.
  • New hire reporting within 20 days.
  • Final paycheck due on next regular payday.
  • Virginia is an at-will employment state with right-to-work laws.

State Incentives

Virginia provides strategic economic incentives to attract and support business growth.

Key Business Incentives:

  • Virginia Jobs Investment Program: Workforce training support.
  • Major Headquarters Workforce Grant: Incentives for large business investments.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • Virginia Small Business Development Center: Comprehensive business consulting.
  • Minority Business Loan Program.
  • Technology Commercialization Assistance Program.

Regulatory Considerations

Virginia maintains a comprehensive regulatory approach supporting diverse industries.

Key Business Regulations:

  • Data Privacy: Laws protecting consumer and business information.
  • Environmental Compliance: Regulations for government contractors and technology sectors.
  • Professional Licensing: Mandatory for various service professions.

Additional Regulatory Areas:

  • Government Contractor Compliance.
  • Technology and Defense Industry Regulations.

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