Virginia keeps things straightforward: a flat filing fee, a flat annual fee, and no franchise tax to plan around. Here's what it takes to start a business in Virginia in 2026.
1. Which business structure fits you?
Before you file anything, it helps to know what you're actually choosing between.
- Sole proprietorship. No filing required to start, and you and the business are legally the same entity. Simple, but you're personally liable for whatever the business owes.
- Partnership. Two or more people running a business together, with the same liability exposure as a sole proprietorship, just split across partners.
- LLC. The most common structure for small businesses in Virginia. It separates your personal assets from the business's debts and lawsuits.
- Corporation, either S-corp or C-corp. More paperwork and more formality, usually worth it once you're bringing on investors or multiple shareholders.
For a deeper comparison, see our guide on choosing a business structure.
LLCs and corporations register with the Virginia State Corporation Commission, the agency that handles business filings statewide. Sole proprietorships and general partnerships don't register there.
2. Register your business
Forming an LLC
You form an LLC in Virginia by filing Articles of Organization with the State Corporation Commission. The filing fee is $100, whether you file online or by mail, and online filings are typically approved the same day.
Every LLC needs a registered agent with a physical Virginia address, available during business hours. You can act as your own agent, or hire a commercial service.
Virginia doesn't require an operating agreement by law, but it's still worth writing one, particularly for multi-member LLCs, to spell out how decisions and profits get split.
Sole proprietorships and DBAs
Sole proprietorships don't file with the SCC. If you're operating under a fictitious name, you'll register it with the clerk's office in the circuit court for the county or city where your business is located, for a small fee.
3. Get an EIN
An Employer Identification Number is free straight from the IRS and takes about 15 minutes online. You'll need one to open a business bank account, hire anyone, or file most business tax forms, even if you're a single-member LLC with no employees.
4. Check licenses and permits
Virginia doesn't issue a single general business license either. What you need depends on your industry and city: professional licensing for regulated fields, a local business license in most cities and counties, and sales tax registration with the Department of Taxation if you sell taxable goods or services. Our guides on professional licensing by industry and zoning laws for home businesses cover more of this.
5. Understand Virginia taxes
Virginia's personal income tax is progressive, from 2% up to 5.75%, but the brackets haven't been adjusted for inflation in years, so the top rate now applies to most working Virginians and to nearly all pass-through LLC profit in practice.
Sales tax is 5.3% in most of the state, combining a 4.3% state rate with a mandatory 1% local add-on. Some regions, including Northern Virginia, Hampton Roads, and Central Virginia, charge additional regional taxes that push the combined rate up to around 7%.
6. Stay compliant
Virginia doesn't require a traditional annual report for LLCs. Instead, every LLC pays a $50 annual registration fee to the State Corporation Commission, due by the last day of the month your LLC was originally formed. Miss the deadline and you'll owe a $25 late penalty; go three months past due and the state automatically cancels your LLC.
Virginia business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $100 |
| Annual registration fee (every year) | $50 |
| Late registration penalty | $25 |
| Registered agent service (optional) | $100 to $250/year |
| EIN | Free (IRS) |
| State income tax | 2% to 5.75% (progressive) |
| State sales tax | 5.3% (4.3% state + 1% local), up to 7% in some regions |
Frequently asked questions
Does Virginia require a traditional annual report for LLCs?
No, instead every LLC pays a flat $50 annual registration fee to the State Corporation Commission.
How much does it cost to form an LLC in Virginia?
$100 for Articles of Organization, typically approved the same day whether filed online or by mail.
What's the top personal income tax rate in Virginia?
5.75%, and since the brackets haven't been adjusted for inflation in years, that top rate now applies to most working Virginians.
When is Virginia's annual registration fee due?
By the last day of the month your LLC was originally formed, with a $25 late penalty if missed.
How high is sales tax in Virginia?
5.3% in most of the state (4.3% state plus mandatory 1% local), with some regions like Northern Virginia charging up to around 7%.
Fees and rates above come from the Virginia State Corporation Commission and Department of Taxation as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Virginia-licensed attorney or CPA about your specific situation.