How to start a business in Maryland in 14 steps (2025 guide)

Dreaming of launching your own business in Maryland? Whether it's opening a boutique in Baltimore, setting up a tech startup near D.C., or running a seafood shack by the Chesapeake Bay, the Old Line State offers endless opportunities to start your exciting journey as an entrepreneur. This guide will walk you through the 14 essential steps to start your business in Maryland, covering everything from choosing a business structure and funding options to taxes, licenses, and more.

Why start a business in Maryland in 2025

Maryland has a flourishing economy, owing to its strategic location along the Eastern Seaboard and its proximity to Washington, D.C., and other key areas. The state boasts a well-educated workforce, with top-tier institutions such as Johns Hopkins University and the University of Maryland acting as hubs for innovation and research. Additionally, small businesses make up 99.5% of all businesses and employ nearly half of Maryland’s workforce.

Maryland is also home to diverse industries like cybersecurity, biotechnology, tourism, fishing, and manufacturing. In fact, according to Maryland’s official website, the state ranks #1 globally for cybersecurity talent. Plus, businesses have strong financial support, with $6.3 billion in small business loans issued in 2021.

Here are the topics we’ll cover in this step-by-step guide: 

• 14 steps to starting a business in Maryland
• Step 1: Decide what type of industry is best for your business
• Step 2: Conduct industry research
• Step 3: Create a business plan
• Step 4: Choose your business entity
• Step 5: Secure funds: Maryland small business funding, loans, and grants
• Step 6: Choose your Maryland business name and Maryland DBA
• Step 7: Pick a business location in Maryland
• Step 8: Find an Maryland registered agent 
• Step 9: Get an Maryland EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Maryland 
• Step 11: Register for your business license and permits in Maryland
• Step 12: Secure insurance for your Maryland small business 
• Step 13: Prepare to pay taxes on your business in Maryland
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions

14 steps to starting a business in Maryland

Starting a business in Maryland is an exciting endeavor, but it requires thoughtful planning and execution to ensure success. The following steps will provide you with tailored insights and small business resources to help turn your idea into a thriving reality. Let’s get started.

Step 1: Decide what type of industry is best for your business 

Consider your skills, interests, and market research to identify an industry that aligns with your goals and has room for growth. Maryland has strong cybersecurity sectors, but what gap can you fill in your location’s current market? Identifying a niche can set your business apart and position you for long-term success.

Don’t know where to start? Explore various small business ideas to get inspired.

Step 2: Conduct industry research

Research your chosen industry and understand Maryland's regulatory environment and licensing requirements. Conduct a competitive analysis to evaluate your potential competitors' strengths, weaknesses, and market position, and identify opportunities for your business to stand out. Talk to existing businesses and potential customers to gain insights. Resources like the Maryland Small Business Development Center can be helpful at this stage.

Step 3: Create a business plan

Develop a comprehensive business plan that outlines your vision, strategy, financials, and mission statement. A business plan serves as your company’s blueprint for success, and it’s invaluable when securing funding, attracting investors, and making key decisions as your business grows.

Here’s what your business plan should include:

• Executive summary: Include a concise overview of your business goals and objectives.
• Company description: Highlight your mission, vision, and what makes your business unique.
• Market research and potential: Examine your target market, industry trends, and opportunities.
• Competitive analysis: Assess competitors, their strengths and weaknesses, and how your business stands out.
• Products and services: Provide details on your offerings and their value to customers.
• Marketing and sales: Outline your plans for reaching, engaging, and retaining customers.
• Business financials: Include income statements, cash flow forecasts, and funding requirements.
• Management and leadership: Introduce your team, their roles, and their expertise.
• Funding request: Detail how much funding you need and how you will use it.
• Appendix: Add supporting documents like research data and legal agreements.

Take time to carefully craft your business plan, so you use it as a reliable reference and guide as your business evolves. Use a free business plan template to get started and contact the Maryland Small Business Development Center for additional help.

Step 4: Choose your business entity: Types of business entities in Maryland

Whether you’re a government contractor in Bethesda or you’re starting a shipping logistics business near the Chesapeake Bay, you’ll need to select a business entity type. These business structures determine ownership, taxes, and any personal liabilities. Small business types in Maryland may include: 

Sole proprietorship

A business owned and operated by one person, with no legal distinction between the owner and the business.  

General partnership

A business owned by two or more people who share profits, losses, and management responsibilities.

Corporation 

A legal entity separate from its owners, with shareholders who have limited liability for the company's debts and obligations.

Limited liability company (LLC)

A hybrid business structure combining the limited liability of a corporation with the tax flexibility of a partnership. Learn more about LLCs.

Step 5: Secure funds: Maryland small business funding, loans, and grants 

Determine how you’ll get funding for your business. Depending on your business type, you may need to budget several hundred to several thousand dollars for necessary licenses and permits. For example, a barbershop owner license costs $200, while an appraisal management company must pay $2,000 for a Maryland business license. You also have to consider expenses like leases, insurance, equipment, and ongoing costs (rent, utilities, marketing).

Here are a few funding options to explore: 

Also, take a look at some Maryland grants and funding options, including:

State Small Business Credit Initiative

Maryland's State Small Business Credit Initiative (SSBCI) helps support businesses with limited growth opportunities. 

Neighborhood BusinessWorks

The Department of Housing and Community Development has Neighborhood BusinessWorks loans with flexible terms available for neighborhood commercial districts focused on revitalization. 

Maryland Department of Commerce

The Department of Commerce offers a variety of grant and loan opportunities, depending on location and industry.

Step 6: Choose your Maryland business name and Maryland DBA

Give careful thought to your Maryland business name. It should be unique, memorable, and reflect what products or services you offer. If you want to also create a business name outside of your legal name, you will file a trade name, or “Trading As” name in the state of Maryland. Other states may use the terms “DBA” (“Doing Business As”), “fictitious names,” or “assumed names.” 

Let’s say you have a tour business focused on hiking and adventuring called Maryland Mountain Tours, LLC, but you also want to open an offshoot canoe rental company. To better market your canoe business, you would choose the name Maryland Mountain Canoe Rentals and file that trade name with the Maryland Secretary of State. In either scenario, you’ll need to conduct a Business Entity Search to ensure your name is available for reservation. 

Reserve your business name

Reserve your business name online through Maryland Business Express or by filing a name registration form and submitting a $25 filing fee through the Maryland Department of Assessment and Taxation.

Filing a trade name or DBA

File a trade name application along with a $25 filing fee to reserve your Maryland DBA.

Step 7: Pick a business location in Maryland

Maybe you’re planning on working out of your home office to save on overhead costs. Or perhaps you want to rent retail space in a trendy downtown area. Whatever the case, choosing the right location is critical to the success of your business. A restaurant located in an inconvenient spot may not get enough customers. A cybersecurity firm with government contractors will need to be in closer proximity to D.C., while your Ocean City concierge service will need a prime location for access to vacation homes and tourist spots. 

Most Maryland towns, cities, and counties have zoning ordinances that determine how spaces can be used, and you may also need to meet building regulations, and obtain permits and licenses to operate in a city or police jurisdiction. If you’re looking for commercial space in one of Maryland’s metropolitan areas, here are a few considerations: 

Baltimore

The city has a large pool of workers, a well-developed transportation network, and easy train access to Washington, D.C.. However, Baltimore also has some challenges, including higher-than-average crime rates and traffic issues that may impact commuting for employees and customers. The city’s income tax rates and property taxes also tend to be higher than the national average.

Columbia 

Located in Howard County, Columbia is often ranked high on “best places to live” lists. It offers breathtaking outdoor parks, well-kept communities, and music and arts festivals that give Columbia a close-knit feel. Columbia’s economy is heavily focused on professional, scientific, and tech services, particularly in fields like IT and engineering. If your business falls into these categories, Columbia may be the perfect place for your operations.

Frederick 

Frederick is situated an hour from Baltimore and D.C., the city blends small-town charm with world-class amenities and a diverse, growing economy. Business sectors range from life sciences and biotech (companies like AstraZeneca have a presence here) to tourism and professional services. Frederick has even attracted the film industry, with parts of the popular series “House of Cards” filmed in the area.

Step 8: Find a Maryland registered agent

Whether you choose someone in your business, another corporation or LLC, or a reliable individual, your business must have a Maryland registered agent. This person, service, or company is your designated source responsible for accepting and passing along government and legal notices. 

The qualifications for becoming a registered agent in Maryland include:

• Being over the age of 18
• Having a physical address in the state that’s not a P.O. Box
• Being available during regular business hours

Ask local business owners who they use as a registered agent, or select a national professional service via online search.

Step 9: Get a Maryland EIN and file your tax & employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although Alaska doesn't require a state EIN, you'll need one to file payroll taxes and federal tax returns, open a business bank account, and apply for loans. You can apply for a free EIN through the IRS website.

Step 10: Register as a small business in Maryland

Once you’ve chosen your business entity, formally register with the Maryland Secretary of State and pay a filing fee, depending on your business type. Here’s what you need to know:

Step 11: Register for your business license and permits in Maryland

Depending on your industry, you’ll likely need some type of business permit or professional license to operate in the state of Maryland. If you’re opening a restaurant, you’ll need a food handler’s license. If you own a salon, you’ll need a salon permit. If you sell certain products or offer specific services, you must register for a sales and use tax license through the state comptroller. 

Do you need a business license in Maryland?

There’s no standard license across the state, but search for any specific licensing you need at Maryland OneStop. Be sure to check with local and county officials to determine any other special operating requirements when starting a business.

Step 12: Secure insurance for your Maryland small business

Owning a small business in Maryland can be an adventure, but unforeseen mishaps can threaten your success. Business insurance can act as a financial safety net that protects your company from a variety of risks, from weather-related events to theft. 

Types of small business insurance in Maryland

Here are the common types of small business insurance in Maryland:

Reach out to your insurance agent to ensure you have the protection you need for your industry, equipment, and buildings based on your location. Be sure to review your policy regularly to determine whether you need additional coverage.

Step 13: Prepare to pay taxes on your business in Maryland 

Tax time comes quickly, particularly when paying hefty sums of money every quarter. Before you decide on your legal entity, you’ll want to look into the types of taxes your business may incur and factor those into your long-term financial planning.

Here are the frequent types of Maryland business taxes:

Corporate income tax

Corporate income tax rates in Maryland currently stand at 8.25%, one of the country's highest tax rates.

Personal income tax

The state’s graduated personal income tax ranges from 2 to 5.75%, depending on your income. Keep this in mind if you have a small LLC or sole proprietorship and you file business income on your personal tax return. 

Sales and use tax

If you’re selling products or services, you’ll incur the 6% sales and use tax.

Other unique Maryland tax situations 

• Admissions and amusement tax: If you require clients to pay fees through your entertainment business — whether admissions, merchandise, service, or refreshments — you’ll incur a local tax ranging from .5 to 10% of all your receipts. Taxes are set by your municipality. 
• Bay Restoration Fund fee: If you have on-site sewage disposal systems or use wastewater facilities and meet certain criteria, you’ll be subject to fees levied on these activities. 

Federal taxes

In addition to state and local taxes, all businesses must pay applicable federal taxes, including:

• Federal income tax
• Self-employment tax (for sole proprietors and partners)
• Employment taxes (if you have employees), including the Federal Unemployment Tax Act (FUTA tax)
• Excise taxes (for certain industries)

To ensure you understand your federal tax obligations, check out these IRS resources: Publication 334, Tax Guide for Small Business and Publication 583, Taxpayers Starting a Business and Keeping Records.

Tax credits & incentives for Maryland employers

Before paying taxes, ensure you’re taking advantage of any deductions specific to your industry or workforce. These may include the Buy Maryland Cybersecurity Tax Credit available to businesses that invest in cybersecurity technologies or the Theatrical Production Tax Credit, which offers a refundable credit for qualified production costs. Search for incentives here.

Step 14: Set up your business bank account

Maybe you’ve got a small cybersecurity firm in Silver Springs or an adventure outfit on the Chesapeake. Whatever the scenario, you’ll need to ensure your business finances remain separate from your personal checking and savings. Here are a few steps to setting up a financial structure for your Maryland small business: 

1. Pull together any foundational paperwork you’ll need to open your small business bank account. This may include professional licenses and proof of business registration. 
2. Find the bank or credit union that best fits your needs. If you want more personalized service and lower fees than a traditional bank, look into a local credit union. If you plan to travel throughout the state frequently, you may prefer the convenience of a national banking chain with plenty of ATM locations. 
3. Begin establishing credit for your Maryland small business by obtaining a credit card and charging business-related expenses. 
4. Set up accounting software for your business to ensure you’re keeping up with payments from vendors, bills, and other finances in real time. 
5. Hire a professional who can help you organize your finances, navigate taxes, and create a robust financial foundation both now and in the long term.

Additional resources to get your business started 

There are several state and federal resources that can support your business with guidance, training, potential funding and more. 

State resources

Maryland Small Business Development Center (SBDC): The Maryland SBDC provides free one-on-one consulting services to small businesses in areas like business planning, financial management, and marketing. They also offer workshops and online courses to help entrepreneurs at any stage of their business journey.

Maryland Department of Commerce: This department supports businesses through tax credits, financial assistance, and workforce development programs. They’re there to guide you through regulations and help you access the tools you need to expand and thrive.

Maryland Business Express: This is an online portal designed to streamline the process of starting a business in Maryland. It provides step-by-step guides, links to required forms, and tools for registering your business and filing necessary paperwork with the state.

TEDCO (Maryland Technology Development Corporation): TEDCO helps grow early-stage technology companies by offering funding, mentoring, and networking opportunities.

Maryland Women’s Business Center: This center offers training, mentorship, and networking tailored to the specific challenges women face in business.

Federal resources 

Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.

Grants.gov: This centralized platform simplifies the process of searching for and applying for federal grants across various sectors. It also provides grant writing tips and has a Grants Learning Center featuring the basics of grants, eligibility, and more. 

Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR): SBIR and STTR programs provide research and development funding to innovative tech companies. 

SCORE: SCORE is a national nonprofit organization that partners with the U.S. Small Business Administration (SBA) to provide free mentoring and educational resources to entrepreneurs and small business owners. While not a direct federal agency, SCORE is an independent organization with a network of volunteer business mentors across the United States.   

U.S. Department of Agriculture (USDA): The USDA website lists grants, loans, and other programs and resources for farmers and other businesses serving rural America.

Frequently asked questions

How long does it take to start a small business in Maryland?

Launching a Maryland business can take weeks to months, depending on permits and licenses needed.

How to start an LLC in Maryland?

To form a Maryland LLC, file articles of organization with the state, and designate a registered agent.

Do I need a local business license if I only operate online in Maryland?

You may need a business license even if you operate solely online. Contact the clerk’s office in your area and visit Maryland OneStop for more information.

Disclaimer: 

This content is for information purposes only and information provided should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does it have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.