Welcome to Washington, DC! This guide will walk you through the key steps for companies to set up shop in the District. From choosing your business type to obtaining licenses, hiring employees to filing taxes, we lead you through the process to legally establish and operate your DC venture. With the help of this starter roadmap and links to critical government resources, you’ll be compliant and open for business in no time. Let’s get you launched in DC!
If you are an international company looking to establish a business in Washington, DC, there are a number of steps you will need to follow to comply with federal and District laws.
Step 1: Choose a business entity type
The first step in incorporating in Washington, DC is to choose a business type. The most common types of business entity in Washington, DC are:
- Limited Liability Company (LLC): a hybrid entity that provides the protection from legal responsibility of a corporation with the tax benefits of a partnership.
- Corporation: a legal entity owned by shareholders.
- General Partnership: a business owned by two or more people who share profits and losses.
- Limited Partnership: a business with general partners, who manage the business, and limited partners, who do not.
Additionally, if you are registered outside of DC but conducting business in the District of Columbia, you are required to submit a Foreign Registration Statement to the Department of Licensing and Consumer Protection (DLCP).
Step 2: Appoint a registered agent
All businesses in Washington, DC must appoint a registered agent, who is responsible for receiving legal and tax documents on behalf of the company. The registered agent must have a physical address in Washington, DC.
Step 3: Form or register your entity
To form your entity, file articles with the Department of Licensing and Consumer Protection (DLCP). The articles should include the company’s name, purpose, the names and addresses of the beneficial owners and incorporators or organizers, and the registered agent’s name and address. Foreign entities wishing to conduct business in DC should file a Foreign Registration Statement with the DLCP.
Step 4: Consider registering a trade name
A trade name is not required to conduct business in the District. However, if a business operates under a name different from its registered full name, including any suffix, for marketing or branding purposes, it must register that name as a trade name or “doing business as.”
Step 5: Obtain necessary licenses and permits
Depending on the nature of your business, you may need licenses and permits to operate in the US and in Washington, DC. Among others, this requires an Occupancy Permit and a Basic Business License. The Department of Licensing and Consumer Protection (DLCP) publishes a list of licenses and permits required for various types of business.
Step 6: Comply with employment laws
If you plan to hire employees in Washington, DC, you will need to comply with federal and DC employment laws, including withholding employee taxes, potential healthcare requirements and other employee benefits, full-time employee (FTE) versus contractor (1099) designation and compliance, and visa requirements. This includes verifying that employees are authorized to work in the US, complying with wage and hour laws, and providing workers’ compensation insurance. For more on employment law in Washington, DC, see the DC Department of Employment Services (DOES).
The US federal government requires foreign workers to obtain appropriate visas prior to working in the US. A list of visa types, requirements, and application procedures is available from the US Department of Labor.
Step 7: Register for federal and District taxes
All businesses operating in Washington, DC are required to register for US and District taxes, including sales tax and use tax, withholding taxes and estimated tax payments through the year, and to file tax returns on a regular and timely basis. This includes obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for federal taxes and registering with the DC Office of Tax and Revenue (OTR) for local taxes.
Step 8: Obtain appropriate business insurance coverage
For-profit businesses are required to carry business insurance in DC. See the District of Columbia Department of Insurance, Securities and Banking (DISB) for details.
Step 9: Open a business bank account
You will need a business bank account to manage your company’s finances. This will involve providing documentation such as your Articles of Incorporation, EIN, and other legal documents.
Step 10: Financial record keeping and ongoing compliance
You must maintain accurate ledgers, business statements, human resource documentation, and other related documents and information. For instance, DC requires biennial reporting to the Department of Licensing and Consumer Protection (DLCP) using CorpOnline. Reporting and compliance information is available on each relevant agency’s website.
It is important to consult with legal and financial professionals to ensure that you comply with all the requirements and regulations for incorporating in Washington, DC.
Government resources
- Department of Licensing and Consumer Protection (DLCP) — dlcp.dc.gov
- Department of Employment Services (DOES) — does.dc.gov
- Office of Tax & Revenue (OTR) — otr.cfo.dc.gov
- Department of Insurance, Securities and Banking (DISB) — disb.dc.gov
- US Department of Labor (DOL) — dol.gov
- Internal Revenue Service (IRS) — irs.gov
Setting up in DC and want a hand? WDCEP connects national and international companies to the public and private sector partners who can help. Get in touch.