If you’re wondering where and how to start a business as an immigrant in North Carolina continue reading this Remitly guide to learn about this state’s numerous small business advantages, including incentives, grants, financing opportunities, support services, and professional organizations.
What businesses are popular for immigrants in North Carolina?
Main-street businesses are among the most popular small business ideas for immigrants in North Carolina.
The term describes retail stores, drugstores, restaurants, grocers, service providers like salons and dry cleaners, and other brick-and-mortar businesses within the main shopping areas of communities.
Construction is another popular industry for immigrants in the state, with more than a third of all painters, wallpaper hangers, and carpenters identifying as foreign-born.
Starting a business in North Carolina step by step
There’s a lot to do when starting a business in North Carolina, but the process can be simple if you take things step by step. Here’s a rundown of what prospective business owners must do to get their new North Carolina business off the ground.
1. Start with a business idea
A successful business starts with a great business idea. Use our guide to the most common business entity types in the state outlined below as a starting point for your brainstorming session.
Think about your own work history and experience, and consider your community. What’s missing from the area that you can provide?
2. Select your business structure
You’ll need to choose a legal structure and create a business entity in North Carolina to avoid legal trouble.
One of the most common business entities for startups is the sole proprietorship, where the business owner is the only person who operates the business. Another popular option is a general partnership, where two or more people share ownership of a business entity.
Other types of business structures, such as a limited liability corporation or LLC, are also worth considering. To determine which type is best for your North Carolina business, seek the advice of an experienced attorney.
Not only can they help you decide, but they can also draw up the necessary paperwork, such as the operating agreement for an LLC.
3. Choose your business name and register it
Every business in North Carolina must register its legal name with the state. Once you know your desired business structure, you can follow the steps outlined below to register your business name.
4. Get a federal employer identification number
Once you have your business name, you’ll need to obtain a federal employer identification number (EIN). You’ll use this number to pay federal and state business taxes, just as you use your social security or taxpayer-identification number to file your personal tax returns.
In addition to being used when you file taxes, an EIN is also usually necessary to open a business bank account and to apply for loans and credit cards under your business name.
Getting an EIN is easy. You can apply for one online and receive it instantly. Click here to get started.
5. Obtain necessary state and local business licenses
After you have your business type established, your name registered, and your EIN, it’s time to apply for the business licenses and permits North Carolina requires for your line of business.
Below, you’ll find a few state agencies that are responsible for issuing the necessary licenses. You may also need licenses in your county and/or city to operate legally. Visit the state’s Department of Commerce website to learn more about licensing requirements and local and state fees.
6. Write a business plan
The next step to opening a business in North Carolina is to develop a business plan.
Business plans serve as a road map for every other step in the startup process. They identify your business’s target market, describe products and services, analyze the local market, and establish budgets and financial projections.
You’ll need a business plan to attract investors, apply for bank financing, obtain grants, and more.
Read our Immigrant Entrepreneurs’ Guide to Writing a Business Plan in the U.S. to learn more about writing a business plan.
7. Acquire funding
Some immigrants who open a business in North Carolina use their personal assets to get their startups off the ground, but this is only an option for some business owners.
If your personal finances aren’t enough to cover your expenses, there are many avenues for obtaining financial assistance.
Start by seeing if you qualify for any of the programs outlined in this guide. Then, read our other guides on Ways to Find Funding for Your Business in the U.S. and Small Business Loans for Immigrants in the U.S. to explore other options.
8. Find a location
As you’re getting your business finances in order, you’ll also need to find a location for your business. If your legal structure is a sole proprietorship, you may be able to operate a home-based business.
Otherwise, you’ll likely need a dedicated business location, such as office space or a retail storefront.
Business owners who won’t need to use an office every day can look into coworking spaces, which are offices shared with other people. DropDesk makes it easy to find coworking spaces in North Carolina and beyond.
9. Open a business bank account
Once you have a physical address for your business in North Carolina, you’re ready to open a business bank account.
Opening a business bank account is an important step, even if you’re operating a sole proprietorship. You’ll need to keep your personal and business finances separate.
You can use the funds in your bank account to cover expenses. Most banks offer online access, so you can check your balance, transfer money, and even pay bills on the go.
10. Get business insurance
The safety of your business depends on having liability protection in place. Just as health and car insurance help protect you from loss, business insurance reduces the risk of economic hardship for business entities.
What type of business insurance you’ll need will depend on your line of business. Some types to consider include:
- General liability insurance: Covers costs related to property damage, bodily injury, and personal injury
- Professional liability insurance: Protects businesses from losses due to personal injury, negligence, copyright infringement, and other legal issues
- Product liability insurance: Helps to pay for expenses if a faulty product injures a person or damages property
- Commercial property insurance: Provides coverage if commercial real estate that a business owns becomes damaged due to a natural disaster
- Commercial vehicle insurance: Works like personal car insurance but is for vehicles used for work purposes
If you have employees, you’ll also need:
- Worker’s compensation insurance: Covers medical expenses and lost income if an employee becomes ill or injured due to their work duties
- Disability insurance: Helps to provide income to employees who are unable to work due to an accident or illness
- Unemployment insurance: Offers financial support for employees who file for unemployment benefits after being laid off from work
11. Hire employees and set up payroll
Unless you’re a sole proprietor, you’ll need to hire employees. If you’re in a competitive labor market where many businesses are hiring, it may take some time to attract, interview, and hire candidates, so start as early as possible.
Once you’ve hired your team, you’ll need to set up a payroll system to deduct income tax withholding and premiums for any benefits that you choose to offer. Many new business owners hire a payroll service to set up and manage the process.
12. Create a business website
Even if you won’t be selling anything online, having a website for your business in North Carolina is vital to your success. Many people now use the Internet to discover service providers, stores, and restaurants, and if you don’t have an online presence, these prospective customers are less likely to find you.
You can create a website yourself using WordPress, Wix, Squarespace, Canva, and other online tools. Alternatively, you can hire a web designer to do the work for you.
How to get new business incentives and financing in North Carolina
Entrepreneurs in North Carolina can find ways to fund a small business through programs available from the state, local government, financial institutions, and nonprofit organizations. Some grants, programs, incentives, and credits that small business owners may qualify for are described below.
Angel investors
North Carolina is home to many angel investor networks, which include organizations of wealthy individuals and organizations that invest in startups.
Some, like the Carolina Angel Network and the Duke Angel Network, are open to immigrants and individuals with ties to a certain college or university. Others, like the Piedmont Angel Network and Wilmington Investor Network, focus on specific geographic regions.
Golden LEAF Economic Catalyst Program
Companies and nonprofit organizations serving communities in North Carolina that rely on the tobacco industry’s activities to fund the local economy can receive funding to pass along to new business ventures through the Golden LEAF Economic Catalyst Program.
Entrepreneurs who have new businesses that will employ many area residents may be able to obtain grants by partnering with recipients of program funds. In addition, anyone looking to expand their business and hire more employees in one of these areas may also find grant opportunities.
Main Street Solutions Fund
The North Carolina Department of Commerce offers business grants for immigrants who wish to open small businesses in the downtown areas of certain cities within the state. The size of the grant depends on the location and the number of jobs the business will create.
Through the Main Street and Rural Planning Center, recipients can access other resources, such as business advice and technical support.
One NC Small Business Program
Administered by the North Carolina Biotechnology Center, the One NC Small Business Program supports startups in science, technology, engineering, and math fields. The program awards grants to entrepreneurs who have also won grants from either the Small Business Innovation Research or the Small Business Technology Transfer federal programs.
Qualified businesses receive matching funds from the North Carolina Biotechnology Center, doubling the startup capital available through grant awards.
One North Carolina Fund
Through this program, the governor can quickly award grants to projects that will create many jobs in North Carolina. The amount given depends on job creation forecasts, the location of the business, financial projections, and how much the business owner or owners are already investing.
Raleigh Building Up-Fit Grant
Immigrant entrepreneurs and business owners in the city of Raleigh may qualify for grants through the Building Up-Fit Grant program to update and improve the interiors of commercial buildings. The city pays for 50% of the construction costs for eligible businesses.
Workforce Grants
The Department of Commerce provides grants to small businesses to cover the cost of advanced technical training for employees. Business owners can use the funds to develop and implement a custom or on-the-job training program.
Carolina Small Business Development Loan
Open to individuals throughout the state, the Carolina Small Business Development Loan offers financing opportunities for startups and established small businesses in most industries. The program provides lines of credit and loans for small businesses with flexible terms totaling up to $250,000.
Self-Help Credit Union
If you’ve had trouble securing a business loan in the past, apply for financing through the Self-Help Credit Union. The community development lender’s mission is to expand participation in the financial system. As a result, it has relaxed lending standards compared to traditional banks.
Slow Money NC
Slow Money NC is a nonprofit that seeks to grow sustainable food businesses throughout North Carolina. Through its peer-to-peer lending program, startups and existing business owners can obtain loans to fund sustainable restaurants, specialty food companies, and other businesses related to the organization’s mission.
Manufacturing Tax Exemptions
Business owners in the manufacturing industry may qualify for sales and use tax exemptions when purchasing machinery, equipment, and raw materials.
In addition, the program may provide tax exemptions for utilities at manufacturing facilities, such as electricity, natural gas, and fuel used to power operations. The tax exemptions can lower startup costs and improve cash flow for existing businesses.
How to get business licenses, certificates, and permits in North Carolina
To legally operate a business in North Carolina, entrepreneurs will need to obtain the necessary registration, licenses, certificates, and permits from the state. Requirements vary based on location and industry; however, most businesses need some of the following credentials.
Business name registration
Sole proprietors, limited liability companies, limited partnerships, and corporations need to register their business names with the North Carolina Secretary of State. The necessary business forms for registration and instructions for completing and submitting them are available on the Secretary of State’s website.
When you register your business name, you’ll also need to pay a filing fee. Check out this table for specific details.
North Carolina doesn’t issue a general business license. Instead, state laws require businesses and professionals working in certain industries to obtain specific state-issued licenses. There are more than 900 of these licensing programs in the state.
The NC Department of Commerce website has a search portal to quickly find the requirements for various industries. Alternatively, you can contact a representative at the EDPNC Small Business Advisors at (800) 228-8443 for assistance in determining the requirements for your specific business.
Tax registration
Most businesses need to register for taxes with the North Carolina Department of Revenue before opening. The department’s website lists which registrations are required.
Some taxes that require registration include:
- Sales and use tax: Companies that sell, rent, or lease taxable personal property must register to accept sales and use tax from customers.
- Privilege license tax: If your business requires a state-issued license to operate in North Carolina, you’ll usually need to register and pay the privilege license tax to conduct business there.
- State and local tax: Most North Carolina companies must pay income, property, and other applicable taxes. Rates and requirements vary by location. The local tax assessor can help you determine which taxes you’re responsible for paying.
- Employment taxes: Nearly all businesses in North Carolina must register with the Department of Revenue to pay state withholding taxes, unemployment insurance taxes, and workers’ compensation taxes.
Local permits and licenses
Counties and city governments may require additional permits. The cities of Charlotte and Raleigh offer online search tools to help you quickly determine which permits are needed.
Entrepreneurs in other areas should contact the county or city government offices for more information on the business permits and licenses needed in those areas.
Other types of business support in North Carolina
Business finances
Entrepreneurs can join North Carolina professional organizations and take advantage of state government and nonprofit programs that provide various networking support for small business owners. Some of those opportunities are described below.
Business Link North Carolina
The Economic Development Partnership of North Carolina provides this service to encourage entrepreneurship in the state. Through the program, you can receive free one-on-one assistance in developing a business plan, applying for grants and financing, and obtaining registrations, licenses, certificates, and permits.
Chambers of commerce are organizations of business owners within a particular region. The groups lobby lawmakers to protect the business community’s interests and offer programs and events such as educational seminars and networking meetups.
The NC Chamber is the statewide chamber of commerce in North Carolina, and there are also regional groups across the state.
Trade associations
Trade associations are nonprofit groups that represent the interests of business owners. Some also offer educational, training, mentoring, and networking opportunities.
There are more than 1,200 of these organizations in North Carolina. They include groups related to a specific industry, like the Carolinas Electrical Contractors Association, as well as associations for individuals of a certain ethnic background, like the North Carolina Hispanic Chamber of Commerce.
North Carolina Lawyers for Entrepreneurs Assistance Project
Also known as NC LEAP, this program offers low- and no-cost legal services to entrepreneurs in areas such as business establishment, education, and patenting.
North Carolina Small Business Center Network
With locations across North Carolina, this network, sponsored by the North Carolina Community College System, offers business counseling, training opportunities, and other resources for small business owners.
Take the first step toward opening a business in North Carolina
In North Carolina, roughly 12% of all self-employed residents are immigrants, as reported by the American Immigration Council. And at least one in eight businesses in the Raleigh-Cary and Charlotte-Gastonia-Concord metro areas are owned by foreign-born individuals.
Now that you know how to open a business in North Carolina, you’re ready to begin your journey. Come up with a business idea and go through the process to get on your way to launching your immigrant-owned startup and being your own boss.
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