Richmond Virginia skyline from across the James River showing the state capital city where many entrepreneurs launch businesses

How to Start a Business in Richmond, Virginia

Why Richmond Is One of Virginia’s Top Cities for New Businesses

Richmond is Virginia’s capital city and one of the most economically diverse metros on the East Coast. With a population of approximately 230,000 inside city limits and a metro area of roughly 1.3 million, Richmond offers the market density of a mid-size city combined with the cost structure of a smaller market — a combination that consistently attracts entrepreneurs.

The city’s corporate roster spans multiple sectors. Fortune 500 companies headquartered in or near Richmond include CarMax and Markel, alongside major employers such as Genworth, Altria, and Dominion Energy. These anchor corporations create substantial supply chain and service contracting opportunities for small and mid-size businesses.

Richmond’s entrepreneurial energy is equally visible at the neighborhood level. Scott’s Addition has evolved into one of Virginia’s most recognized brewery and creative industry districts. Carytown is a nationally known independent retail corridor. Shockoe Bottom supports a dense concentration of restaurants and hospitality businesses. Capital One’s West Creek campus and the VCU innovation corridor anchor a growing technology and life sciences ecosystem.

For entrepreneurs, one of the most compelling reasons to start a business in Richmond is a city policy that significantly reduces the tax burden for small businesses: a doubled BPOL exemption threshold that exempts nearly 70% of Richmond businesses from the gross receipts tax entirely.

Richmond’s $500,000 BPOL Exemption

The single most important local tax policy for Richmond small business owners is the city’s Business, Professional, and Occupational License (BPOL) exemption threshold. Richmond has doubled its exemption from $250,000 to $500,000 in gross receipts.

What this means practically: any Richmond business with annual gross receipts below $500,000 pays no BPOL tax on those receipts. According to analysis from Keiter CPA, this threshold change means that nearly 70% of Richmond businesses qualify for the exemption — they owe no gross receipts tax to the city.

This is a meaningful financial advantage. In cities and counties with lower exemption thresholds, small businesses may owe hundreds or even thousands of dollars annually in BPOL tax before they have reached the scale where that tax burden is manageable. Richmond’s $500,000 threshold effectively shelters most startups and small businesses from this cost for their entire early-growth period.

Critical note: Qualifying for the BPOL exemption does not mean you skip the registration requirement. Every business operating in Richmond must still register with the city and obtain a business license, even if the resulting tax amount is zero. The registration obligation exists separately from the tax calculation.

Step 1: Choose and Register Your Business Structure

Before engaging with Richmond’s local requirements, you must form your business entity at the state level through the Virginia State Corporation Commission (SCC).

LLC (Limited Liability Company)

  • Filing fee: $100
  • Annual registration fee: $50 per year
  • Register at: cis.scc.virginia.gov

Corporation

  • Filing fee: $75
  • Register at: cis.scc.virginia.gov

Sole Proprietorship A sole proprietorship using only the owner’s legal name requires no SCC registration. However, any use of a trade name or “doing business as” designation requires a fictitious name certificate filed with the SCC.

Choosing the Right Structure For most new Richmond businesses, the LLC is the most popular structure because it provides personal liability protection without the more complex governance requirements of a corporation. Consult an attorney or accountant if you are uncertain which structure best fits your situation.

Step 2: Register for State and Federal Tax Obligations

Federal Employer Identification Number (EIN)

Obtain your EIN from the IRS at irs.gov at no cost. You will need this number for your Richmond business license application, any bank accounts you open, and your state and federal tax filings.

Virginia Tax Registration

Register with the Virginia Department of Taxation for state-level tax obligations. Depending on your business activity, you may need to register for:

  • Virginia state income tax withholding (if you have employees)
  • Sales and use tax (if you sell taxable goods or services)
  • Corporate income tax (if you operate as a corporation)

Virginia’s corporate income tax rate is 6%.

Richmond Sales Tax

Businesses selling taxable goods or services in Richmond must collect and remit sales tax at the combined Richmond rate of 6%, composed of:

  • 4.3% state portion
  • 0.7% local portion
  • 1% regional portion

This combined rate applies to most retail sales within Richmond city limits.

Step 3: Obtain Required Licenses and Permits

Richmond Business License (BPOL)

Richmond’s business license is administered by the Department of Finance Revenue Administration. Every business operating in Richmond must obtain a license, regardless of size or revenue level.

Where to Apply: City Hall 900 E. Broad Street, 1st Floor Richmond, VA 23219

Phone: RVA 311 at (804) 646-7000

Appointments: Richmond offers both in-person appointments and virtual appointments through an online calendar. Check rva.gov for current scheduling options. Virtual appointments make the process accessible without requiring you to travel to City Hall.

Business License Application Checklist

A Business License Application Checklist PDF is available on rva.gov. Download and complete this checklist before your appointment to ensure you arrive with all required documentation. Missing documents will delay processing.

Zoning Certificate

Before your business license is issued, you need to confirm that your proposed business use is permitted at your chosen location under Richmond’s zoning ordinance. The zoning review is handled by the Department of Planning and Development Review (PDR). Contact PDR to obtain a Zoning Certificate or zoning clearance for your address.

This step applies whether you are leasing commercial space, buying property, or operating a home-based business. Zoning approval must be in place before the business license is finalized.

All City Taxes Must Be Current

Richmond will not issue a business license to any applicant with outstanding delinquent taxes owed to the city. Resolve any outstanding tax obligations before submitting your application.

Understanding the BPOL Tax Structure

For businesses with gross receipts above $500,000, Richmond’s BPOL tax applies to receipts above that threshold. The tax rate varies by business classification.

Business Classifications

Richmond assigns every licensed business to a classification that determines the applicable BPOL tax rate. Common classifications include:

  • Retail
  • Wholesale
  • Professional services
  • Financial services and real estate
  • Contracting
  • Repair and personal services

Each location where you operate in Richmond and each distinct type of activity may be separately subject to licensing and taxation. If your business conducts multiple types of activities, you have the option to make a multi-activity election, which can affect how your tax liability is calculated. Ask the Department of Finance for guidance on whether this election is beneficial for your situation.

Beginner’s Adjustment

New businesses may qualify for a beginner’s adjustment on their initial BPOL license, which accounts for the fact that projected first-year receipts are estimates rather than verified figures.

$30 New-Business Discount

Richmond offers a discounted license fee of $30 for new businesses during the first two years of operation, applicable to businesses with $250,000 or more in gross receipts. This discount has been retroactively verified. Ask the Department of Finance to confirm current eligibility requirements when you apply.

Annual Renewal and Deadlines

BPOL licenses in Richmond are renewed annually. The renewal deadline is March 1 of each year. The renewal tax is calculated based on the prior calendar year’s actual gross receipts.

Late Payment Penalties

Missing the March 1 deadline results in both a penalty and interest:

  • Penalty: $10 or 10% of the tax due, whichever is greater
  • Interest: 10% annually

There is no benefit to paying late — even a small balance left unpaid past March 1 triggers the minimum $10 penalty and begins accruing interest at 10% per year.

Online Payment

Richmond offers online payment for BPOL taxes and other city obligations through the Richmond payment portal on rva.gov.

Pop-Up Businesses Before March 1

If you are planning a temporary or pop-up business — such as a seasonal retail operation or a pop-up café — and you intend to begin operations before March 1, you should apply for your business license before opening. Contact RVA 311 at (804) 646-7000 to confirm the current process for short-term or temporary business licensing.

Special Business Requirements

Contractors

Contractors operating in Richmond must provide documentation of:

  • A valid workers’ compensation certificate
  • DPOR (Department of Professional and Occupational Regulation) license

Non-city contractors performing work within Richmond on projects valued at $25,000 or more must obtain a Richmond business license, even if their business is based outside the city.

Restaurants and Food Service

Restaurants and food service businesses must obtain a Health Permit from the city health department. They must also register for Richmond’s meals tax, which applies to prepared food and beverage sales.

Peddlers and Solicitors

Businesses that sell goods or services door-to-door or through itinerant vending must obtain a peddler’s license. In addition to the BPOL license, peddlers must carry liability insurance that names the City of Richmond as a co-insured party.

Taxi and Limousine Services

Taxi and limousine operators must obtain a “For Hire” vehicle tag from the Virginia DMV in addition to the city business license.

Public Dance Halls

Businesses operating a public dance hall must pay a nonrefundable application fee of $100.

Business Tangible Personal Property

In addition to the BPOL license, Richmond businesses that own tangible personal property used in their trade or business — such as equipment, furniture, computers, and tools — must file a Business Tangible Personal Property return with the city. This filing is due by March 1 each year. The property is then assessed and taxed at the applicable city rate.

This is a separate obligation from the BPOL license. Many new business owners are caught off guard by this requirement when they receive their first assessment. File the return by March 1 even if you believe your property value is low.

Step 4: Open a Business Bank Account

With your EIN and SCC documentation in hand, open a dedicated business checking account. Keeping business and personal finances separate is essential for accurate bookkeeping, simplifies tax preparation, and reinforces the liability protection your LLC or corporation provides.

Richmond Business Resources and Support Organizations

Richmond has a strong ecosystem of organizations that support new and growing businesses. Take advantage of these resources — most offer free or low-cost services.

Richmond SBDC (Small Business Development Center)

The Richmond SBDC provides free one-on-one business advising, market research assistance, financial analysis, and access to training workshops. SBDC advisors can help you evaluate your business plan, understand your licensing obligations, and connect with financing options.

SCORE Richmond

SCORE is a national network of volunteer business mentors, most of whom are experienced entrepreneurs and executives. Richmond’s SCORE chapter offers free mentoring sessions, workshops, and online resources. SCORE is especially valuable for first-time business owners who benefit from ongoing mentor relationships.

VCU da Vinci Center

Virginia Commonwealth University’s da Vinci Center is a hub for innovation and entrepreneurship, with programs that connect students, faculty, and community entrepreneurs. If your business has a technology, design, or innovation component, the da Vinci Center’s network and programming can be a significant asset.

Greater Richmond Partnership

The Greater Richmond Partnership is the regional economic development organization for the Richmond metro area. It provides data, site selection assistance, and connections to incentive programs for businesses considering locating or expanding in the region.

Startup Virginia

Startup Virginia is a nonprofit accelerator and coworking community that supports early-stage companies. With space in Scott’s Addition, Startup Virginia offers affordable workspace, programming, and a network of investors, mentors, and fellow founders. If you are launching a growth-oriented startup, Startup Virginia is worth exploring early.

Common Mistakes to Avoid

Starting before registering. Virginia’s BPOL system penalizes businesses that operate without a valid license. Apply before or immediately after opening.

Skipping the zoning check. Signing a lease without verifying zoning approval first has cost many Richmond entrepreneurs both money and time. Confirm zoning clearance before committing to a location.

Missing Business Tangible Personal Property filings. This March 1 deadline is easily overlooked by new business owners but can result in assessments, penalties, and interest.

Assuming the BPOL exemption means no paperwork. Qualifying for the $500,000 exemption does not eliminate the registration requirement. You must still apply for and hold a business license.

Summary: Starting a Business in Richmond

Richmond offers a genuinely favorable environment for new businesses — competitive costs, a diverse economy, a $500,000 BPOL exemption that benefits nearly 70% of businesses, and a strong network of entrepreneurial support organizations. The administrative process is straightforward once you understand the sequence.

Register your entity with the Virginia SCC, obtain your EIN, confirm zoning at your location, and apply for your business license through the Department of Finance Revenue Administration at City Hall, 900 E. Broad Street, 1st Floor, Richmond, VA 23219. Call RVA 311 at (804) 646-7000 with questions, and connect with the Richmond SBDC or SCORE for free guidance at any stage of the process.

The March 1 annual deadline governs both BPOL renewals and Business Tangible Personal Property filings. Mark that date and stay ahead of it — late payments in Richmond carry a minimum $10 penalty plus 10% annual interest.