Setting up a small business in Arkansas generally involves lower initial costs compared to many other states, making it an attractive option for entrepreneurs. Commercial real estate and leasing rates are relatively affordable, especially outside major urban centers like Little Rock. Labor costs are also comparatively low due to the state's lower minimum wage and cost of living. Arkansas offers a business-friendly regulatory environment with fewer licensing fees and regulations, which helps reduce setup costs. Additionally, the state provides various incentives and support programs for small businesses, including tax credits and grants.
While the market size may be smaller compared to more populous states, Arkansas's lower costs and supportive economic climate provide a favorable environment for new business ventures.
There are several types of business entities you can choose for your company. Which is best for your business depends on a variety of factors, like ownership in the business, taxation, and more. Each structure has its own one-time formation or set-up cost that varies by state.
Franchise taxes are state fees that businesses pay in order to have the right to operate in those states. They are paid in addition to state and federal income taxes. Here are the franchise tax fees for each business entity structure in this state.
Most states (44 out of 50) levy a corporate income tax.
C-Corps pay a C-Corp state income tax rate.
If the income tax is pass-through, as with S-Corps, use your personal income tax rate.
For LLCs, the tax rate depends on the how you set up the LLC business structure.
These costs are similar across states. We estimate the total non-state specific costs to be $XXX. Link to Overall Costs page.
Summing up the above fees, we estimate the total cost for starting a business in this state to be:
$XX