Starting a Business in Washington State

Washington state continues to be a hub for innovation, ideas, and entrepreneurs. Small businesses are the backbone of Washington’s economy, making up over 95% of Washington’s businesses and employing over 1.5 million Washingtonians.

Washington is one of the best states for entrepreneurs to launch and grow their businesses with a wide array of resources as you start your business or expand your footprint. Consistently ranked among the top ten states in workforce, quality of life, access to capital, and education metrics.

To start a business in Washington state, there are a few steps to follow:

1. Research and make a business plan prior to incorporation. This includes researching all the relevant state and local licensing registration requirements. For a customized list of regulations for your business, click here. You will also want to decide what business structure you will have: sole proprietor, limited liability company, etc. For a comparison chart of different business structures, see Figure 1.1
2. If you decide to register your business as a Limited Liability Company (LLC), Profit Corporation, Nonprofit Corporation, or a Limited Partnership, you will need to register your business with the Secretary of State. You will receive a Unified Business Identifier that will be used throughout all relevant agencies.
3. File your Business License Application with the Department of Revenue here. To be recognized as a business in Washington state, you must file your Business License Application with the Department of Revenue. Applications typically process in 10 days, but if you are also applying for a liquor license it could take up to 90 days.
4. If you plan on hiring employees, you will need to report your new employees to the Department of Social and Health Services here, and create a required safety plan.
5. If your business will be reselling products, you will need to apply for a reseller permit. This typically takes 10 days to process.
6. If you are a construction contractor, you will need to read all relevant requirements and register as a contractor with the Department of Labor & Industries.
7. If your business will be serving or processing food, reach out to the local health department for all relevant requirements.

Starting a Business in Federal Way

Uniquely located between the two deep water port cities of Seattle and Tacoma, Federal Way is an ideal location, serving Pacific Coast states from Canada to Mexico.   In fact, 50% of the state’s population is located within a 2-hour drive either north or south from Federal Way.  Within the same drive time, businesses can reach more than 4 million consumers in Seattle and Portland, Oregon.  In addition, Federal Way is 10 minutes from SeaTac International Airport.

Federal Way has low city taxes as well as no State Income Tax, no Unitary Tax, no Inventory Tax, no Business and Occupation (B&O) tax, and no Sales or Use Tax on machinery and equipment used in manufacturing operations. For more information, contact Tanja Carter, Economic Development Director, City of Federal Way, at tanja.carter@cityoffederalway.com

Take a deeper dive into the demographics of Federal Way with overview statistics, the impact of Washington state’s key industry sectors, and our economic recovery dashboard.

The City of Federal Way requires all business located within the city limits, or who conduct business within the city limits, to be licensed with the city, per city code 12.05.040. A separate business license must be obtained for each business name and location.

See fee schedule for a listing of fees for the City of Federal Way here.