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

As one of the oldest states, Rhode Island has long been a haven for dreamers and hard workers—and to this day, it’s a great place to start a small business. If you’re about to take the exciting journey of starting a business in Rhode Island, we’re here to help with a step-by-step guide. 

Why start a business in Rhode Island in 2025?

Rhode Island is strategically located along the nation's I-95 corridor, meaning local businesses have access to a variety of transportation infrastructure, like trucks, planes, and cargo ships. This convenience not only gives businesses easy access to the Northeast marketplace but also opens up international shipping opportunities as well. 

The northeast corridor of Rhode Island offers a talent-rich community. In fact, thousands of students annually graduate from nearby universities and colleges. With the state's proximity to Connecticut and Massachusetts, commutes for employees are highly manageable. As a result, Rhode Island boasts high employment levels in advanced technical and professional industries, and 98.9% of businesses in the state qualify as small businesses, according to the U.S. Office of Advocacy.

Our comprehensive guide will help break down the must-know facts about how to start a business in Rhode Island. Here are the topics we’ll cover:

• 14 steps to starting a business in Rhode Island
• 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: Types of business entities in Rhode Island
• Step 5: Secure funds: Rhode Island small business funding, loans, and grants
• Step 6: Choose your Rhode Island business name and Rhode Island DBA
• Step 7: Pick a business location in Rhode Island
• Step 8: Find a Rhode Island registered agent 
• Step 9: Get a Rhode Island EIN and file your tax and employer identification documents 
• Step 10: Register as a small business in Rhode Island 
• Step 11: Register for your business license and permits in Rhode Island
• Step 12: Secure insurance for your Rhode Island small business 
• Step 13: Prepare to pay taxes on your business in Rhode Island
• Step 14: Set up your business bank account
• Additional resources to get your business started
• Frequently asked questions 

14 steps to starting a small business in Rhode Island in 2025

If you've been bitten by the entrepreneurial bug and want to start your own business in Rhode Island, there's a specific process you'll need to follow. We're going to go over some basic tips below to get you started, with key small business resources to help you access the funds and knowledge base you need.

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

When you first decide that you want to open your own business, you may not have a specific industry in mind. Fortunately, there are many business industries currently booming in Rhode Island. These include life science, offshore wind, travel, hospitality, food, beverage, custom manufacturing, and boat systems. Don’t be afraid to cast a wide net for inspiration—explore some different small business ideas and find something that sparks your interest.

Step 2. Conduct research in your business’ industry

Once you've narrowed down your list of prospective industries, it's important to conduct local research. No matter what industry you’re in, conducting a competitive analysis is always a key part of evaluating whether your small business is likely to be viable. 

For example, if you want to open a small hotel in Providence, you'll want to examine the competitive landscape. Determine how many other hotels operate in the area and how much tourism happens annually. The key is to ensure there's a market for your industry and that it isn't saturated with local competition. 

Step 3. Create a business plan

Before you start any business, it's imperative to sit down and construct a business plan. It should include vital information like your chosen industry, target market, operating location, marketing strategies, financial projections, and funding needs. Any bank or investor you go to will want to see your business plan before making a decision, and it will help you make decisions moving forward.

A robust business plan should include most or all of the following:

• Executive summary: Briefly summarize the core concepts and goals of your business.
• Company description: Discuss your company’s mission and objectives.
• Market research and potential: Analyze current industry trends in your target market.
• Competitive analysis: Identify your most important competitors and what differentiates your business.
• Products and services: Summarize your business’s core offerings.
• Marketing and sales: Specify your strategies for retaining and reaching customers.
• Business financials: Create income statements, cash flow forecasts, and other key projections.
• Management and leadership: List key team members, plus their expertise and experience.
• Funding request: Determine your funding needs and specify how you’ll use the funds.
• Appendix: Include important supporting documents like market research data or financial statements.

Get started with some of the free business plan templates available online, or explore Rhode Island business plan resources from the Rhode Island Secretary of State’s office.

Step 4. Choose your business entity: Types of business entities in Rhode Island

All businesses will need to be classified in a specific entity structure to file taxes and obtain business licensing. Choose one of these structures for your business: 

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: Rhode Island small business funding, loans, and grants 

Startup capital pays for equipment, inventory, rent, registration, and other initial expenses, so it’s one of the most crucial resources you’ll need when starting a business in Rhode Island (or any other state). Here are some of the most common ways to secure financing:

Here are some other state-level funding sources that Rhode Island small businesses should consider:

Innovate RI Fund

The Innovate RI Fund provides grants that help tech startups in Rhode Island meet their initial costs while they apply for further funding and develop product offerings.

Rhode Island Commerce Financing

Rhode Island Commerce Financing is a development organization that offers several loan and grant programs aimed at small businesses.

State of Rhode Island Grant Funding Opportunities

Check the State of Rhode Island Grant Funding Opportunities database to learn about and apply for Rhode Island small business grants.

Step 6. Choose your Rhode Island business name and Rhode Island DBA

Your business name is going to have a large impact on your business's legacy. Choose something that tells potential customers who you are and what products or services you offer. 

Reserve your business name

When you narrow down your list of potential business names, first verify the business name you want hasn't already been taken. Conduct a search of existing business names using the Rhode Island Secretary of State's business entity search page; be sure to read the state’s Name Availability Guidelines before you begin. 

Filing a DBA (Doing Business As)

If you choose to operate as a sole proprietorship, you'll likely want to file for a DBA. This stands for "doing business as," and it's used to allow your business to operate under a name that's different from its legal name. In this case, instead of operating the business under your personal name for a sole proprietorship, you can operate under whatever other name you want.

Any business operating under a name that is different from its legal name must file for a DBA. This includes all various entity types, including sole proprietorships, LLCs, corporations, and partnerships.

You'll need to submit your DBA paperwork to your local town or city clerk's office. The amount you have to pay to file your DBA paperwork at the clerk's office varies from city to city. It's best to check with your local office to determine the fee.

It's important to note that DBAs aren't considered to have any legal protection. This means that other people can use that name for their business unless you file to trademark it. It isn't uncommon for some local municipalities to require your small business to take an advertisement out in the local newspaper to publish notice of your DBA filing.

Step 7. Pick a business location in Rhode Island

Rhode Island may be small, but it offers a surprising number of options for entrepreneurs seeking the perfect business location. Of course, you’ll also want to check factors like local regulations before choosing a location for your business. If you’re planning to save money by running your business from home, be especially cognizant of local laws that might prohibit home-based businesses.

These are some of the current economic hotspots of Rhode Island: 

Providence

The state capital of Rhode Island has an economy based on tourism, hospitality, education, business services, and health services. The city offers a business portal that showcases an array of resources for starting a business here.

Cranston

This city is popular for banking services, manufacturing, restaurants, and shipping services. Check out the city’s economic development page to learn more about its small business opportunities.

Narragansett

This small city transforms into a booming vacation town in the summer, making it an ideal location for businesses in the service and tourism industries. Visit the city’s business page to get started.

Additional considerations

When choosing a location, consider an area that’s not only close to potential customers but also to your suppliers. It’s also worth researching local and state tax rates to determine which areas provide the lowest rates; local taxes can significantly impact your bottom line. 

Different areas will have different permitting and regulation requirements. Determine what these are for your business type in various locations so you can compare and contrast your different options.

Assess factors like a community’s commute times, amenities, housing costs, and so forth. These will all impact your employee recruitment and retention.

Step 8. Find a Rhode Island registered agent

Rhode Island officially requires any non-resident businesses, corporations, S corps, and LLCs to have a registered agent. This can be a designated individual of the company or a registered agent service. The registered agent is responsible for representing the business in obtaining legal documentation. Whenever the state needs to send legal documentation or official notices to a business, it may give it to the registered agent on file.

In the state of Rhode Island, you can choose to be your own registered agent as long as you have a physical address that can be accessed during normal business hours. P.O. Boxes are not accepted. If you don't meet these requirements or you simply want to outsource this task, you can do so with a commercial registered agent service. By paying a fee each month, you can ensure they will reliably receive any legal documentation and forward it to you.

Step 9. Get a Rhode Island EIN and file your tax and employer identification documents

An EIN (Employer Identification Number) is a nine-digit number the IRS uses to identify your business for tax purposes. Although Rhode Island 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 Rhode Island

Rhode Island has different registration processes depending on the specific type of entity you’re registering. With most entities, you'll need to register online with the RI Department of State. Here are the requirements and applicable fees for common business structures.

Step 11. Register for your business license and permits in Rhode Island

To ensure that your new business is operating legally in the state, it's imperative to know if you need to apply for a license or permit before starting your business.

Do you need a business license in Rhode Island?

Businesses in the state of Rhode Island don't need a general business license. However, specific business industries or activities may require a license or permit, such as an alcohol beverage control (ABC) license, to operate legally. Contact your local municipality to learn of any business licensing requirements that can affect your specific business.

It can also help to review the “Lookup a License” page on the Rhode Island Department of Business Regulation website. There, you can conduct searches specific your industry to determine if you need special licensing. Furthermore, you may need licensing from the Division of Taxation for activities related to things like tax collection.

Examples of common licenses and permits in Rhode Island

Whether or not you need a business license will depend on factors like your industry and county. Here are some of the most common licenses and permits that businesses may need to legally conduct business in Rhode Island:

• Seller's Permit: This is required if you sell tangible property to collect sales tax.
• Zoning permit: Most local areas will require your business location to be zoned as commercial instead of residential.
• Alcohol beverage control (ABC) license: All businesses that engage in selling alcoholic beverages will need this operating license.

Step 12. Secure insurance for your Rhode Island small business

There are many different types of insurance for small businesses. While the state of Rhode Island will require some basic insurance coverages based on your business industry, you may want to consider investing in other types of insurance to protect your business's financial interests.

Types of small business insurance in Rhode Island

Below are some of the most common insurance types that Rhode Island small business owners may need:

Step 13. Prepare to pay taxes on your business in Rhode Island 

Just like you need to pay taxes on your personal income each year, your business also needs to pay taxes on its yearly profits. The tax documentation that you need to file will vary depending on your business's entity structure. Some entities will file documentation with the Division of Taxation annually while others will need to do so quarterly. You can file most returns electronically and discover filing deadlines at the Division of Taxation's website.

Depending on your business's structure and practices, there are various types of business taxes that you'll need to pay.

Corporate income tax

Business entities classified under a corporate tax structure must pay the greater of 7% of the assessed value of their taxable income or $400.

Franchise tax

All franchises will need to pay a tax. The total tax amount will vary based on the authorized shares of stock. However, this is a minimum set of $250.

Payroll taxes

Business entities with employees will be responsible for paying payroll taxes. These are comprised of four main types of taxes: unemployment insurance tax, state income tax withholding, job development fund contributions, and temporary disability insurance.

Employer withholding tax

This type of payroll tax requires employers to withhold employee earnings for state and federal taxes alongside unemployment insurance contributions. These taxes are explained in more detail below:

• Federal income tax: This is based on the IRS withholding tables.
• Rhode Island income tax: This is based on the state's withholding brackets noted on the RI Division of Taxation's website.
• Unemployment insurance (UI): This is a contribution to Rhode Island's unemployment insurance program, and its rate is based on your experience rating.

Other unique Rhode Island tax situations 

• Minimum corporate tax: All businesses that are registered as for-profit must pay a minimum annual tax amount set by the Division of Taxation, regardless of profitability.
• Sales and use tax: Businesses that sell tangible goods and specific services may need to collect sales tax and remit it to the state.
• Corporate net income tax: All corporations, including S Corps, must pay taxes on their net earnings.

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 and incentives for Rhode Island employers

Your small business may be able to take advantage of particular tax incentives and credits, depending on specific factors related to your business.

• Job training tax credit: If your business focuses on employee development, you can receive a tax credit for both new and current employees. It allows you to get tax credit for 50% of the actual cost of training expenses up to a maximum amount of $5,000 over a three-year period.
• Qualified jobs incentive tax credit: When you offer jobs that add more people to the Rhode Island workforce, you can get tax credits up to $7,500 annually. The specific amount will vary depending on wages and other criteria outlined by the Rhode Island Commerce Corporation.

Step 14. Set up your business bank account

Setting up a small business bank account is fairly simple to do when you have the right documents on hand. You'll need to select your desired banking institution and check its specific requirements, but the basic process usually works as follows:

1. Collect all your business paperwork, including your EIN, business formation documents, registrations, permits, and licenses, to open your small business bank account. 
2. Choose a bank or credit union that offers products and services you need, whether loan offerings, checking, or high-yield savings accounts. 
3. Establish business credit using a bank credit card for business-related purchases and expenses. 
4. Set up your financial records by selecting the right accounting software for your organization. 
5. Hire a professional accountant well-versed in local tax codes and your industry to help with financial and other bookkeeping services.

Additional resources to get your business started

Below, you’ll find more information on funding sources, free business counseling, educational webinars, and other small business resources in Rhode Island.

State resources

• Rhode Island Secretary of State - Business Services: Rhode Island business owners will need to use this site for basic functions like registering and filing forms, but it also provides resources such as business plan templates.
• University of Rhode Island Small Business Development Center: This community resource from the University of Rhode Island includes business webinars and business counseling for small business entrepreneurs.
• Rhode Island Commerce Start-Up Assistance: Access business counseling, funding opportunities, and much more through this resource center run by the business advocacy organization Rhode Island Commerce.
• Rhode Island Small Business HUB: This organization provides free services to qualifying businesses. Services include accounting, marketing, legal advice, and other essentials. 

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. 

Disclaimer: 

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