Opening a Business in Virginia: LLC or Corporation

To open a business in Virginia, whether an LLC or Corporation, it is necessary to appoint a Registered Agent and submit the Articles of Incorporation to the Virginia State Corporation Commission.

With ExportUSA, we can open your company in Virginia quickly and without errors. We also handle requests for tax identification numbers [EIN] and the opening of corporate bank accounts. In addition, we can domicile the company at our office. This way, all official communications from federal agencies, the IRS, state agencies, etc., will arrive at ExportUSA, allowing us to act immediately.

The domiciliation address can also be used as a commercial address with all your American clients and suppliers. The domiciliation service also includes a phone number answered by ExportUSA staff during New York office hours.

Nexus in Virginia for State Corporate Income Tax Purposes

For income tax purposes, Virginia uses a multifactor apportionment calculation comparing revenue, labor cost, and value of assets in Virginia with the total sales, labor cost, and value of assets to determine if there is a nexus in Virginia for income tax purposes. According to Virginia tax law, if at least one of these factors is positive, the company has a nexus in Virginia and may need to file a tax return in Virginia.

The Articles of Incorporation for starting a company in Virginia must include at least the following information:

• Name of the company. The name must include LLC, Corporation, Incorporated, Company, or Limited or an abbreviation of one of these words. Tip: many companies opt for simplicity with Corp or Inc.
• Number of authorized shares. Also, list the type of shares the company intends to issue [de minimis the Common Share]. If multiple classes or series of shares are created, including the number of shares, their designation, and the preferences, rights, and limitations for each class is necessary. Note that the fees for filing the Articles of Incorporation and the Annual Report are based on the number of authorized shares.
• Name of Registered Agent. Can list a state resident or a company providing Registered Agent services.
• Address of the Registered Agent
• Address of the company's main office. This information is optional.
• Name/s of the Director/s. Your company can appoint the Directors in the Articles of Incorporation or immediately after.
• Name and address of the Incorporator in Virginia. The incorporator is the person who signs and files the Articles of Incorporation.
• Phone number and email address. This information is optional.
• Other provisions [if any] The form provided by the State Corporation Commission contains the minimum statutory requirements of Virginia for the information needed in the Articles of Incorporation. If you wish to include additional provisions [such as limiting the liability of directors] these must be prepared separately and submitted along with the Articles of Incorporation.

First Organizational Meeting and First Shareholders' Meeting

Regarding organizational meetings in Virginia, according to the Virginia Code § 13.1-623 (2019), the first organizational meeting can be held in the state of Virginia, but it can also be held elsewhere. If the Articles of Incorporation have appointed the Directors, then the Board of Directors can hold the first organizational meeting immediately. Otherwise, the incorporator will hold the organizational meeting, who will appoint the Directors and give them control of the company. It's not necessary for the first organizational meeting to occur in person as long as the meeting minutes are written and signed by the incorporator.

Filing the Annual Report with the State of Virginia

Every year, companies in Virginia must file an annual report by the end of the anniversary month in which the company was opened. It's an administrative report where the names of the Directors and the address of the company are confirmed. Suppose you forget to file the annual report. In that case, you have 4 months to submit your annual report and pay the registration fee (including the 10% penalty) to avoid administrative dissolution of the company.

State Corporate Taxation in Virginia

Corporate income tax in Virginia is levied at a flat rate of 6%. For companies with permanent establishments in Virginia, there is also an additional state tax, the Business, Professional, and Occupational License, which can reach a maximum of $0.58 for every $100 of gross revenue.

The sales tax rate in Virginia is 4.3%. There may be additional local taxes that mean, on average, the sales tax in Virginia ranges between 5% and 7%, depending on the city or county where the sale occurred.

A Brief Overview of Virginia's Economy

According to data from the first quarter of 2023, the projected end-of-year GDP for Virginia is $669.4 billion in goods and services, with a real growth rate of 1%. This places Virginia's economy as the 13th largest among the states in America.

The Manufacturing, Professional, Scientific and Technical Services, and Real Estate sectors contributed to Virginia's GDP in 2022, accounting for 42.8% of the state GDP.

In 2022, Virginia had a population of 8,677,307, with an annual growth rate of 0.5% over the last five years, ranking it 28th among all 50 U.S. states in terms of population growth rate.