How to Start a Business in Richmond, Virginia
Guide to Starting a Business in Richmond
When you’re ready to start a business in Richmond, you can expect a fairly straightforward process in a business-friendly state. Assuming you’ve already checked out our page on starting a business in Virginia describing federal and state guidelines, your next step is satisfying both city and county guidelines.
Understanding the Independent City of Richmond
Richmond is a flourishing yet unique city, and is known as one of the 38 “independent cities” or “incorporated cities” in Virginia. An independent city means it is not, politically speaking, part of a county, and is instead considered a “county equivalent.” Cities like Richmond have the same authority as a county.
There are two classes of city in Virginia: first-class and second-class. Of these two classes, Richmond is considered a first-class city, meaning it has its own District Court and Circuit Court.
It’s important to note a few things about Virginia before we dive in:
- Some cities and counties share the same name, but are geographically unrelated. This applies to the City of Richmond, which is not geographically close to Richmond County. Be aware of this distinction when conducting business research!
- An “incorporated town” is different than an incorporated city (like Richmond), and can be easily mixed up. Incorporated towns are not independent from counties and are situated in a parent county or counties, and pay both town and county taxes.
Knowing how the City of Richmond is set up in terms of jurisdiction and how it operates is essential in understanding how to begin fulfilling your business requirements for Richmond. Whether you’re a seasoned Virginian or are still learning all the unique Virginia quirks, this guide will help you on the specifics about starting a business in Richmond, Virginia!
The Steps to Starting a Business in Richmond
In order to get your business equipped and ready for launch, you’ll need to handle the following tasks:
- Register Any Fictitious Names with the SCC
- File BOI Report if Applicable
- Sign up with the Virginia Tax Department
- Enroll Your Business with the VEC
- Get a Certificate of Zoning Compliance
- Apply for a Certificate of Occupancy
- Obtain Business Licenses or Permits
Register Any Fictitious Names
What is a fictitious name?
A fictitious name is a registered name that a company conducts business under that’s different from their legal business name. These names are also referred to as a DBA (Doing Business As), assumed, or trade name. Registering a fictitious name allows the public to know who owns a specific company, and can help keep consumers safe from suspicious or unethical businesses. Think of a fictitious name as a “nickname” for your business—a fictitious name is not a separate legal entity.
Fictitious names don’t have the same wording restrictions as legal business names do, so you don’t need to worry about ending your fictitious name with something like “LLC” or “Inc.” A fictitious name doesn’t need to be unique in the state either, so you may want to do research on your fictitious name to see how common it may already be.
Who uses fictitious names?
It’s most common for sole proprietorships and partnerships to use fictitious business names, so that they can go by a business name other than one that includes the owner’s full name. LLCs and corporations often use fictitious names for branches of the business that aren’t relevant to the legal business name (e.g. a branch that sells a different line of products). Fictitious names allow a level of flexibility for your company’s branding in a much simpler way than, say, starting an entirely new LLC.
Do I have to register all my fictitious names?
Virginia requires all fictitious names used by any business to be registered with the state first before conducting business under that name. That being said, your LLC or corporation doesn’t need to have a fictitious name—that part is up to you!
How do I register a fictitious name?
New as of January 1, 2020, the Clerk’s Office of the SCC is the office for fictitious name filings of businesses in Richmond. This document is referred to as the Fictitious Name Certificate, and you can make this filing for a $10 fee using the Clerk’s Information System (CIS) or by paper form. Your fictitious name will automatically be linked to your business entity on file.
For more information on fictitious names, head over to the Virginia SCC Fictitious Name page.
File BOI Report if Applicable
Just like starting any Virginia business, if you register your Richmond business with the state, your business will likely be subject to the Corporate Transparency Act (CTA) requirements.
In an effort to combat financial crimes, the CTA requires businesses to submit a Beneficial Ownership Information (BOI) report to the Financial Crimes Enforcement Network (FinCEN) within 30 days of the company formation if formed on or after January 1, 2024 (FinCEN has extended the deadline solely for businesses formed in 2024 to up to 90 days after formation). Companies registered before 2024 have until January 1, 2025 to file a report and do not have to provide company applicant information.
All details reported to FinCEN are kept secure and private, and include:
- Company Information
◦ Legal name AND any trade names or DBAs
◦ Current address
◦ Formation jurisdiction (VA for Virginia formed companies)
◦ Tax ID number
- Beneficial Owner (anyone with 25% or more ownership, or a major role in company management) and Company Applicants (Individual filing the company formation, and/or person who directed that the filing be made)
◦ Full legal name
◦ Date of birth
◦ Residential address
◦ Copy of an identifying document with a unique ID number (e.g. driver’s license)
These requirements do not apply to businesses operating as a sole proprietorship with or without a DBA in Richmond.
Tired of all these mandatory filings? Just add BOI Report Filing ($9) and our experienced local filing specialists can handle this for you, too.
Sign up with the Virginia Tax Department
Virtually all companies that will conduct business activity of any kind are required to enroll with Virginia Tax after the business is established.
First, you’ll need to have your federal Employer Identification Number (EIN). If you don’t already have one, they are free to obtain from the IRS. Our How to Start a Business in Virginia page goes into more detail about EINs and our services that can help you obtain your EIN.
Once you have your EIN, you can go forward in registering with Virginia Tax. Registering is fairly quick, and there are a few different levels of registration. The two most common levels you’ll most likely be registering at are the following:
- The Virginia Pay Sales & Use Tax – For businesses that sell goods and services, you’ll need to register to collect sales tax.
- The Virginia Withholding Tax – For businesses with employees, you’ll need to register for employer withholding tax.
You can register with Virginia Tax using any of these three possible methods:
- Online – Registering online is the preferred method by the SCC, and has the added benefit of automatically enrolling your business in an online services account, where you can take care of future tasks like paying taxes and sending emails to the SCC.
- Mail – You can download and fill out the Business Registration Form (R-1) and mail it to the address below:
Virginia Department of Taxation Registration Unit
P.O. Box 1114
Richmond, VA 23218-1114
- Fax – Using the same registration form as listed above, you can fax the completed form and send it to (804) 367-2603
For questions or concerns on this process, you can give the Virginia Department of Taxation a call at (804) 367-8037.
Once registered, you will immediately receive your Virginia Tax account number or numbers, depending on how many tax types you fall under. You’ll also receive an official Sales Tax Certificate of Registration (if applicable to your business type), and helpful information on next steps.
If you’d like to learn all the ins and outs of the city, county, and state taxes, head over to the SCC’s official Virginia Tax page.
Enroll Your Business with the VEC
The VEC (Virginia Employment Commission) is the department within the Virginia Department of Taxation (VDOT) responsible for collecting unemployment tax from businesses. Basically, if you plan to hire employees, you should plan on first enrolling with the VEC.
You’ll need to enroll with the VEC after you’ve formed your business, and if any of the following are applicable to your business:
- You employ one or more people who work within 20 different weeks in a single calendar year
- You pay $1,500 or more on your total gross payroll in a calendar quarter
You’ll be able to enroll with the VEC at the same time you enroll with Virginia Tax when you take care of these tasks online, saving you a significant amount of time when you use the online method. If you’d still rather enroll with a paper form, you can download the necessary VEC FC-27 form, and send them by mail to the following address:
Virginia Employment Commission
P.O. Box 26441
Richmond, VA 23261-6441
Apply for a Certificate of Occupancy
A Certificate of Occupancy, or C.O., is a building permit that authorizes the occupancy and general use of a building or structure in a certain city under the Building Code. These certificates are most commonly seen after a new building has been constructed (and final inspections such as electrical have taken place), a new addition to a building has gone up, or certain changes or improvements to a building have been made.
In Richmond, you’re required to obtain a C.O. for your premises. If you plan to occupy an existing building, you can apply for a different type of C.O. called a H-CO permit instead, which will verify compliance with laws such as fire safety and parking laws. Having this building permit shows your building is safe and prepared for your business to operate inside.
You can contact the Commissioner of Buildings in the Richmond Zoning Administration for past C.O. records to see what C.O. approvals are already in place for your business location.
Are there additional occupancy permits I may need?
Businesses can require additional occupancy permits depending on their industry.
A few examples of these industries include the following:
You’ll need to request to have city inspectors come check out your place of business. They’ll be the ones to confirm your site’s compliance with the local laws.
C.O.’s are a complex requirement of Richmond, and we highly recommend seeking out professional advice for how C.O.’s apply to your business location. For more specific details and forms, check out the Richmond Bureau of Permits and Inspections website.
Get a Certificate of Zoning Compliance
Not to be confused with a Certificate of Occupancy, a Certificate of Zoning Compliance, or CZC, is a permit that shows compliance with the City Zoning Ordinance (CZO). This required compliance boils down to this: if your business will be using any building or land (besides a residential unit), you’ll need make sure your type of business is allowed to operate there. A CZC cannot be issued until there is an equivalent CO on file.
Obtaining a CZC for your business premises is a requirement in the City of Richmond. CZCs are not transferable from past owners or tenants, and also requires an inspection before one can be issued to you.
If you’re denied a CZC because your business is not allowed to operate in the location you chose, you still have a few options to remedy the issue before moving on to find a different business location.
- Apply for a Special Use Permit (SUP)
- Apply to change the zoning designation
Much like a C.O., getting a CZC can be complicated, and we suggest speaking to the Richmond Bureau of Permits and Inspections or another professional on the matter for all the necessary details.
Obtain Business Licenses or Permits
Now that you have your Certificate of Occupancy and your fictitious names registered, you are eligible to start applying for the proper business license or permit needed for your business industry.
There will mostly likely be some type of business license or permit you’ll need to operate legally in the City of Richmond. You’ll need to obtain that license prior to conducting any business, and within 30 days from the opening of your business.
The City of Richmond website provides a New Business License Application you can use to apply for a business license, understand what the categories of business are in Richmond, and what the Business License Tax (or BPOL—Business, Professional, and Occupational License) will cost, which is due alongside your business license application and every year after by March 1st.
You can figure out what your annual BPOL is going to cost based on your gross annual receipts for the year, using the scale below:
- Less than $5,000: No annual fee or payment due
- $5,000 – $99,000: $30 annual fee
- More than $100,000: Depends on the business type
- Retail: .20 per $100
- Wholesale: .22 per $100
- Restaurant: .36 per $100
- Personal Service: .36 per $100
- Professional Service: .58 per $100
- Contractor: .19 per $100
- Repair Service: .36 per $100
Unlike these other steps, it’s important to note that this business license application must be submitted through postal mail. Be sure to print this application out on white paper, or else your application will be rejected. You can send the application and appropriate BPOL to the following address:
Division of License, Assessment and Tax Audit
900 E. Broad St., Room 103
Richmond, VA 23219
Note: There isn’t a general or single business license that all businesses in the Commonwealth of Virginia are required to have, and the business licenses that are required by the City of Richmond are often subject to change without notice.
To go deeper into licenses and permit requirements for Richmond, visit the Virginia Department of Professional and Occupational Regulation.
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