Oahu Business Registration
Tips From Local Business Owners
Tips From Local Business Owners
Do you want to start an Oahu business and get inside information from local business owners? Read on for some interesting business stories and tips for registering a business on Oahu.
Single parenting two hungry boys compelled me to increase my income through self employment…
I stumbled down many rabbit trails like trying to sell gold jewelry, piñatas and websites to retailers. Being the world’s worst salesperson and lacking confidence… I even knocked something off a manager’s desk one day nervously trying to convince him he needed my website.
Then, imagine not knowing anything about shipping or pricingwhen aretail buyer asked me how much I would charge for 10,000 piñatas.
Wow, I thought my big break had arrived!
Long story short… someone beat me to the sale! Are there really a lot of piñata salesmen on Oahu?I started getting up in the wee hours of the morning before my day job to call my co-worker’s brother in Texas. I was so excited he was going to ship me piñatas from Mexico and also worried this business venture was above my pay grade.
My piñatas… and mangoes from my backyard tree… were sold at the Kam drive-in flea market.
Thanks to God’s blessing… my perseverance finally paid off!
I started a sole proprietorship medical transcription business contracting with the hospital where I was employed. Suddenly I found myself working from home and my income doubled overnight. Everything was bliss for about 3 years.
Management changed and along with it so did my contract…
I drained my savings and envisioned being homeless when I landed a another transcription account with Oahu’s largest hospital. I changed my sole proprietorship to a limited liability company and continued to contract with more hospitals.
Desperately needing more transcribers, 7-day work weeks and 18-hour days became common. With a peak of 12 transcribers the account was successful for 10 years until voice recognition technology took over.
What a whirlwind business experience it was!
NOTE: This business information should not be considered legal and/or comprehensive business advice. The information comes from my personal experience at the time I had a business in Hawaii. Business requirements may have changed since that time.
I am not affiliated with or endorsed by any Hawaii State or Honolulu City and County office or with any business that I provide links to and my opinions are my own. Likewise, I am not affiliated with or endorsing the websites I provide links to.
You may want to get legal advice from an attorney when starting a business entity in Hawaii.
Statistically speaking, Oahu ranks low among the 50 states for having a business-friendly climate. I have nothing to compare it to as it’s the only state where I had a business.
I say if you have an entrepreneurial spirit and want to live in paradise give it a try… just do your homework first!
Tips From Oahu Business Owners
- Practice the aloha spirit and keep a humble attitude. The hard sell approach is not popular in Hawaii.
- Aloha shirts are common business attire for men, not a suit and tie.
- Learn about the culture, respect it and embrace it in your business.
- Maintain an honorable business reputation. Your reputation will travel fast around the island.
- Keep abreast of changes in business rules and tax policies.
- Hire a good accountant, keep good records and keep all receipts of potential business expenses. Every legal business expense helps to reduce your self-employment taxes (FICA) that you are required to pay to the IRS.
- In 2013 FICA taxes (social security and Medicare) were 15.30%. The self-employed pay the entire amount. Employees pay only half of this tax. Their employers contribute the other half.
How to Get an Oahu Business License
1. Register your Oahu business, business name and business type at the DCCA (Department of Commerce and Consumer Affairs).
Department of Commerce and Consumer Affairs
335 Merchant Street
Honolulu, HI 96813
808-587-3222
You can only choose a business name that is not in use by someone else. The DCCA has the list of business names being used and those that have expired.
Some well-known business entities Hawaii recognizes are:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Limited Liability Partnership (LLP)
- S Corporation
- Corporation
2. Get a General excise tax license (GE tax)
Hawaii State Tax Office
830 Punchbowl Street
Honolulu, HI 96813
808-587-4242
The fee for this Oahu business license in December 2013 was $20 and the taxable rate was 4-1/2% on gross sales. The 1/2% is being charged to pay for HART, Oahu’s public rail system that is now under construction.
Years ago an educator with Oahu’s GE tax office explained to me and my business associates that the Hawaii GE tax is not a sales tax. It is a business tax.
Many businesses pass this tax on to their customers as a business expense. This tax has to be paid to the State of Hawaii even if it is not collected from customers. It is paid monthly, quarterly, semi-annually or yearly. Filing periods are determined by your gross business income.
TIP: It has been my experience that when you have an uncommon question concerning GE taxes it is best to request a determination from the GE tax office technical department. Request their phone number and email from the GE tax office. Some CPAs and accountants gave me incorrect information about GE taxes.
3. Register with the Department of Labor & Industrial Relations.
Department of Labor & Industrial Relations
830 Punchbowl Street, #321
Honolulu, HI 96813
808-586-8844
If you plan to hire employees, register with Hawaii’s Department of Labor & Industrial relations. As an employer you will also need an EIN number (employer identification number) issued by the IRS. This is also known as FEIN (federal employer identification number).
TIP: Most Hawaii banks require an EIN number to open a business account even if you do not have employees.
For Hawaii EIN online application type in this address:
https://www.taxid-apply.com/usa/hawaii/
TIP: Hawaii is known to be a democratic state that is pro-union with few republicans in office. It is difficult to pass all Hawaii’s rules to hire someone as an independent contractor. Educate yourself if you plan to use contractors as you may get incorrect advice even from those you may consider experts.
Some business associates and I actually met with a Hawaii senator, congressman and the director of the unemployment insurance office to discuss independent contractors a number of years ago.
To our credit we also had an unprecedented meeting with a representative from the Governor’s office regarding how this related to our specific industry.
We opted only to contract with businesses who were limited liability companies or those who were incorporated. At that time those entities were considered legitimate businesses by the State of Hawaii.
Simplified Oahu Business Registration
The Oahu Business Action Center (BAC) and Hawaii Business Express (HBE) each offer comprehensive business registration.
Business Action Center
1130 North Nimitz Highway
Second Level, Suite A-220
Honolulu, HI 96817
808-586-2545
Open 7:45 am to 4:30 pm Monday to Friday
At BAC you can register with the DCCA, get a GE tax license, register with the Department of Labor and get help obtaining an EIN number. They offer assistance and have information about other resources to help you get started in business.
HBE offers comprehensive online Oahu business registration. There is a live chat option if you need help understanding the questions.
https://hbe.ehawaii.gov/BizEx/home.eb
Helpful Oahu Business Resources
HawaiiReporter.com is an online newspaper that has a business section and videos. Hawaii Reporter also has a weekly TV program called “News Behind the News.”
Pacific Business News is a newspaper dedicated to business. This newspaper was an asset to my business in the past.
www.bizjournals.com/pacific
Honolulu Star-Advertiser is Oahu’s largest newspaper.
www.staradvertiser.com
Oahu Business Health Insurance
The State of Hawaii requires that employees working 20 or more hours per week be provided healthcare coverage by their employers with some exceptions. This originally began in 1974 and Hawaii was the first state in the nation to implement this.
I am not sure how the Affordable Care Act (ObamaCare) will affect Hawaii’s current healthcare. One person on Quest (Hawaii’s low income healthcare) told me he received a letter stating he does not need to switch to the Affordable Care Act as long as he remains eligible for Quest.
