Washington State has quietly become one of America's most fertile grounds for entrepreneurs. With 695,695 small businesses representing 99.5% of all businesses in the state, zero personal income tax, and a tech ecosystem that spills opportunity into every industry, founders who act on validated ideas can turn them into registered, licensed, revenue-generating operations within weeks.
This guide walks you through how to start a business in Washington: from choosing your business structure to building the digital presence that actually brings in customers. Whether you're a solopreneur with a service idea or a product builder ready to ship, tools like Lovable now let you build full-stack applications while your paperwork processes. Six stages stand between your idea and a launch-ready business. Let's make each one count.
Why Washington State Works for New Businesses
The Tax Advantage That Keeps Paying
Washington's prohibition on personal income tax means you keep more when withdrawing profits. On $100,000 of personal income, you save over $13,000 annually compared to California residents.
Instead of corporate income tax, Washington uses a Business and Occupation (B&O) tax on gross receipts. For retail businesses, that rate sits at 0.471%, increasing to 0.5% on January 1, 2027. For manufacturing and wholesaling, the rate is 0.484%, also increasing to 0.5% in 2027. Service businesses pay 1.5% for income under $1 million and 1.75% for income of $1 million or more, with a higher rate of 2.1% for gross income exceeding $5 million. These rates are significantly lower than the 5-9% corporate income taxes common in other states.
Tech Ecosystem Advantages
Washington hosts major technology companies including Microsoft, Amazon, and Meta, creating infrastructure, talent pipelines, and investor attention that benefit businesses across the state. The concentration of technical expertise and capital in the Puget Sound region creates spillover advantages for entrepreneurs throughout Washington, even in industries beyond traditional technology sectors.
Choose Your Business Structure
Your business structure determines your personal liability, tax treatment, and paperwork burden. Washington offers five primary options, each with distinct tradeoffs.
LLCs: The Default Choice for Most Founders
Limited Liability Companies provide complete separation between personal and business assets. If your business faces claims or debts, your personal home, savings, and other assets remain protected.
The filing fee is $180 with the Secretary of State, and you'll need to file an initial report within 120 days. LLCs require a registered agent with a physical Washington address (no PO boxes), and your business name must include "LLC," "L.L.C.," or "Limited Liability Company."
Corporations: Built for Growth and Investment
Corporations provide complete separation between personal and business assets, offering full liability protection where shareholders are generally not personally responsible for business debts. This structure works well for businesses planning to raise outside investment.
The $180 base filing fee applies for corporations, the same as LLCs. Your corporate name must include a required designator such as "Corporation," "Incorporated," "Inc.," "Company," "Co.," "Limited," or "Ltd."
Corporations require more ongoing formality: bylaws, board meetings, and shareholder records. This makes them generally better suited for founders planning significant scale.
Sole Proprietorships and General Partnerships
Sole proprietorships and general partnerships cost nothing to form with the Secretary of State. You register directly with the Department of Revenue for your UBI number. However, you carry full personal liability for all business debts and claims. Your personal assets, including your home and savings, can be seized to satisfy business obligations.
Entrepreneurs operating with gross annual income of $12,000 or more, or those planning to hire employees or operate under a business name different from their legal name, should consider forming an LLC for the liability protection alone.
Making Your Decision
LLCs provide greater tax flexibility with simpler administrative requirements, making them ideal for early-stage ventures. Corporations offer clear structure for equity distribution and investor relations, making them preferable when raising institutional funding or building a company with multiple shareholders.
Register Your Business
Washington uses a two-step registration process: file your formation documents with the Secretary of State, then obtain your Unified Business Identifier (UBI) number through the Department of Revenue.
Step 1: File with the Secretary of State
For LLCs and corporations, submit your formation documents through the Secretary of State's online portal. The base filing fee is $180 regardless of filing method. Expedited processing (3 business days) costs an additional $100, while same-day processing runs $150 extra.
Before you file, verify your desired business name is available through the Washington Secretary of State business search. Your legal name must be distinguishable from existing registered names in Washington per RCW 23.95.305. If you need time before filing, you can reserve a name for $30.
Starting January 20, 2026, email addresses are mandatory for all registered agent and principal office filings. Submissions without valid email addresses will be rejected.
Step 2: Get Your UBI Number
Your UBI is a nine-digit identifier that serves as your business ID across multiple Washington State agencies. You need one if you plan to hire employees, collect sales tax, operate under a trade name, or generate $12,000 or more in annual gross income.
Apply through the Business Licensing Wizard or the My DOR portal. Online applications process in approximately 10 business days. Mailed applications using the Business License Application PDF can take up to 6 weeks.
Get Your Business License and Permits
Washington's unified licensing system lets you apply for state, city, and county licenses through a single application, a significant advantage over states that require separate applications to multiple agencies.
The Statewide Business License
You need a Washington State business license if you operate under a trade name, plan to hire employees, sell products or services subject to sales tax, or expect $12,000 or more in annual gross income. The base business license fee is $50 for new applications.
Start with the Business Licensing Wizard, which identifies all required licenses and endorsements based on your business location, industry, and expected activities.
Local and Industry-Specific Permits
The wizard handles most local requirements automatically through Washington's city endorsement system. Endorsement processing typically adds 2-3 weeks to your overall timeline.
Industry-specific permits vary significantly based on your business type. Childcare providers pay $30/year for family home childcare or $125/year plus $12 per additional child for centers through the WA Department of Children, Youth & Families. Food service establishments work with county health departments, where fees vary based on establishment type and inspection requirements. Construction businesses should contact their local building department directly, as permit fees are set at the municipal level.
Set Up Your Finances and Taxes
With your registration complete, you need an EIN, a business bank account, and a clear understanding of your ongoing tax obligations.
Get Your EIN
Your Employer Identification Number (EIN) is required for all corporations and partnerships, and for LLCs that have employees, file excise taxes, or elect corporate taxation. Apply online through the IRS during business hours (Monday through Friday, 7 a.m. to 10 p.m. Eastern time) for immediate EIN receipt.
Open a Business Bank Account
Major banks require your personal identification, business formation documents, EIN, and ownership information for anyone with a 10% or greater stake. After providing all required documentation, expect approximately 1-2 weeks for account approval.
Keep business and personal finances completely separate from day one. If you've formed an LLC or Corporation, this separation preserves your liability protection and simplifies tax filing. Records must be maintained for 5 years.
Understand Your B&O Tax Obligations
Washington's B&O tax applies to gross receipts, meaning you pay on total revenue rather than profit. Businesses with annual gross income not exceeding $28,000 generally don't need to file B&O tax returns. Most new businesses file annually by April 15, transitioning to quarterly filing once revenue exceeds $60,000.
Late filing penalties escalate quickly: 9% after April 15, 19% after June 1, and 29% after June 30. A $750 tax bill filed 2 months late incurs a $142.50 penalty (19%), totaling $892.50.
Build Your Digital Presence and Launch
Registration paperwork takes 2-3 weeks minimum if applying online, or up to 6 weeks if mailing documents. That waiting period is your opportunity to build the customer-facing infrastructure that actually generates revenue.
From Registered to Revenue-Ready
Lovable is an AI app builder for developers and non-developers. Using Agent Mode for autonomous AI development with independent codebase exploration, proactive debugging, and real-time web search, or Chat Mode for interactive collaborative development with multi-step reasoning, you can create full-stack applications without coding expertise. Success stories show entrepreneurs creating full-featured SaaS products, consumer apps, and agency projects, with build times ranging from hours to 45 days.
Sabrine Matos, a growth marketer with no technical background, built Plinq, a consumer safety app, in 45 days using Lovable. The app reached 10,000 users within three months and hit $456,000 ARR. "If Lovable didn't exist, Plinq would never have seen the light of day," she said.
This approach, sometimes called vibe coding, lets you describe what you want in plain language while AI handles the technical implementation. Rather than learning to code or hiring developers, you focus on your business logic and customer needs. The technology translates your vision into functional TypeScript/React applications that can be deployed to Vercel and connected to real databases through Supabase. For Washington entrepreneurs waiting on registration paperwork, this window becomes productive building time rather than idle waiting.
Your First Week Action Plan
The registration process takes 2-3 weeks. During that time, you can build customer-facing infrastructure that positions you to serve customers the moment your license arrives.
On days one and two, apply for your EIN online (you'll receive it immediately), file your LLC formation with the Secretary of State, and start your business license application through the Business Licensing Wizard. Total cost runs approximately $230.
During days three through five, build your customer-facing infrastructure while paperwork processes. Create your website, set up booking or ordering systems, and connect payment processing. This is where Lovable shines: you can have a working application ready before your business license arrives.
On days six and seven, open your business bank account once you have your EIN and formation confirmation. Set up your accounting system and document your record-keeping process.
By week two, your state registrations process while you refine your product. Week three brings your business license approval and first customer conversations. By week four, you're operational: accepting payments, serving customers, and iterating based on real feedback.
Start Building Today
Washington State created the environment. The registration process provides the legal foundation. Now that you know how to start a business in Washington, it's time to build the business that brings it all together.
Start building with Lovable and have a working MVP ready well before your business license arrives.
