Starting a Business in North Dakota: Licenses & Permits (2026)

Last updated: February 26, 2026

Starting a business in North Dakota means filing Articles of Organization with the Secretary of State through the FirstStop portal, registering for sales tax with the State Tax Commissioner, and securing any industry-specific licenses before you open. North Dakota has no general statewide business license – registration is tax- and industry-driven. The state’s top individual income tax rate dropped to just 2.50% in 2026, making it one of the most tax-friendly states in the country for small business owners. One critical distinction: North Dakota is a monopolistic workers’ compensation state, meaning every employer with even one employee must register with Workforce Safety & Insurance (WSI) before the first day of work – no private alternatives are permitted. This guide covers every required step using official state sources.

How to Start a Business in North Dakota (Step by Step)

Step 1: Choose Your Business Structure

Most North Dakota small business owners choose between a sole proprietorship, a Limited Liability Company (LLC), or a corporation. An LLC is the most popular choice because it protects personal assets and is taxed as a pass-through entity by default.

Sole Proprietorship: No state filing required to operate under your own legal name. If you use a business name different from your personal name, register a Trade Name with the Secretary of State for $25. You bear full personal liability for all business obligations.
LLC: Formed by filing Articles of Organization with the North Dakota Secretary of State via FirstStop. Filing fee: $135. Annual report: $50, due November 15 each year. LLCs offer limited liability protection and pass-through taxation by default.
Corporation: Subject to North Dakota corporate income tax (1.41% to 4.31% on ND-sourced income). Better suited for businesses seeking outside investors. Contact an attorney to evaluate fit.

All North Dakota entity filings are handled through the FirstStop portal: firststop.sos.nd.gov.

Step 2: Register Your Business

All LLC, corporation, and trade name filings are handled by the North Dakota Secretary of State. The main site is sos.nd.gov and the online filing portal is firststop.sos.nd.gov.

Articles of Organization (LLC): File online via FirstStop. Fee: $135. Processing is typically completed within 1-3 business days online. Expedited processing is available for an additional fee.
Annual Report: All North Dakota LLCs must file an annual report and pay $50 by November 15 each year (farming/ranching LLCs: April 15). First report is due the year after the calendar year of formation. Late filing incurs a $50 penalty. Failure to file within 6 months of the deadline results in involuntary termination. File only through FirstStop – no paper option for annual reports.
Registered Agent: Every North Dakota LLC must designate a registered agent with a physical North Dakota street address (no P.O. Boxes) available during normal business hours. A resident member or manager may serve as agent. Professional registered agent services typically cost $49-$150/year. Agent consent is required before naming them in formation documents.
Trade Name / DBA: If you operate under any name other than your legal entity name, register a Trade Name with the Secretary of State. Fee: $25. Registration is valid for 5 years. Renewal fee: $25. File via FirstStop: firststop.sos.nd.gov.
EIN (Federal): Apply for a free Employer Identification Number from the IRS at irs.gov. Required for all entities with employees and for multi-member LLCs. Get your EIN before registering for state tax accounts.

Step 3: Get Required Licenses & Permits

North Dakota does not issue a general statewide business license. There is no single permit that covers all businesses. Requirements depend on your industry, and most licensing is handled by separate state agencies or local governments. Key industry licenses include:

Food trucks and food service: North Dakota Department of Health and Human Services, Food and Lodging Unit issues mobile food unit permits. Annual fee: $110. Plan review required before operating.
HVAC contractors: No statewide HVAC technician or contractor license exists in North Dakota. Contractors performing jobs over $4,000 must register with the Secretary of State (Class A-D license, $100-$450). Local municipalities including Bismarck, Fargo, Minot, and Grand Forks maintain their own HVAC journeyman and master license requirements.
Hair salons / cosmetology: The North Dakota State Board of Cosmetology licenses individual cosmetologists (1,800 training hours required, $15/year) and salon establishments. Board: ndcosmetology.com.
Daycare / childcare: North Dakota Department of Health and Human Services, Early Childhood Licensing unit. Application fee: $40. Programs serving more than 5 children must be licensed.
Landscaping (pesticide application): Commercial pesticide applicators must obtain a Commercial/Public Applicator certification from the North Dakota Department of Agriculture and NDSU Extension. Required for applying pesticides on others’ property for compensation.
Private investigators: The North Dakota Private Investigation and Security Board (NDPISB) licenses individual investigators and detective agencies. Individual license fees total approximately $291.25. Applicants must complete 2,000 hours of qualifying investigative experience before applying.

See the industry-specific guides below for complete licensing details.

Step 4: Register for State Taxes

North Dakota taxes are administered by the Office of State Tax Commissioner. Register online via the ND TAP (Taxpayer Access Point) portal at tap.tax.nd.gov.

Sales Tax: North Dakota’s state sales tax rate is 5.0%. Local jurisdictions add up to approximately 3.5% more; some cities reach combined rates of 8.0% to 8.5%. Prepared food sales (food trucks, restaurants) are taxable. Apply for a Sales and Use Tax Permit through ND TAP at least 30 days before opening. The permit does not expire but is non-transferable if you purchase an existing business. More info: tax.nd.gov/business/sales-and-use-tax.
State Individual Income Tax (2026): North Dakota’s individual income tax is one of the lowest in the nation, with a top rate of just 2.50%. LLC members and sole proprietors report business income on their personal returns and pay individual income tax at these rates. More info: tax.nd.gov/new-businesses-and-contractors.
Corporate Income Tax: For C-corporations, North Dakota applies rates from 1.41% to 4.31% on North Dakota-taxable income. S-corporations and most LLCs are pass-through entities and do not pay entity-level corporate income tax.
Employer Withholding: If you have employees, register for North Dakota income tax withholding through ND TAP. File withholding returns on a schedule determined by withholding volume.
Unemployment Insurance: Register with Job Service North Dakota within 20 days of hiring your first employee. Liability begins when you have 1 or more employees in 20+ weeks in a calendar year, or pay $1,500+ in wages in any quarter. New employer rate: 1.0% (construction: 9.68%). Register via the UI EASY portal at apps.nd.gov/jsnd/uiiatax. Phone: (701) 328-2814.
New Hire Reporting: Report all new hires to the North Dakota New Hire Reporting Center within 20 days of first day of work. Report online at nd.gov/newhire.

Step 5: Get Business Insurance

North Dakota is one of only four monopolistic workers’ compensation states in the country. This means all private workers’ compensation insurance is illegal – you cannot buy workers’ comp from any private insurer. Instead, every North Dakota employer must register with Workforce Safety & Insurance (WSI) and purchase coverage exclusively through the state fund before the first day the first employee works. There is no grace period.

Who must register with WSI: Any employer with one or more employees – full-time, part-time, seasonal, or occasional workers. Register before hiring at workforcesafety.com/employers. WSI calculates your premium based on payroll estimates and your industry class code.
Stop-gap coverage: WSI policies do NOT include employer’s liability coverage. If you want protection against employee injury lawsuits that fall outside the workers’ comp system, purchase stop-gap (employer’s liability) coverage separately from a private insurer.
Exemptions: Sole proprietors, business owners and their spouses, farm and ranch labor, household domestic workers, and volunteers are exempt. Exempt individuals may elect elective coverage through WSI.
Penalties for non-compliance: $10,000 penalty plus $100 per day for each day you operate uninsured. The business also becomes directly liable for all claim costs. Do not hire anyone before registering.
General liability insurance: No statewide mandate for most industries, but required for contractor license registration with the Secretary of State and commonly required by commercial clients and licensing boards.

WSI contact: (800) 777-5033 | workforcesafety.com

North Dakota Business Guides by Industry

Choose your industry for a detailed breakdown of every license, permit, and requirement:

North Dakota Business Resources & Official Links

Frequently Asked Questions

How much does it cost to form an LLC in North Dakota?

Filing Articles of Organization with the North Dakota Secretary of State costs $135 online via the FirstStop portal. After formation, LLCs pay an annual report fee of $50 due by November 15 each year. Your first annual report is due the November 15 following the calendar year of formation. Total first-year costs typically range from $185 to $335 depending on whether you use a professional registered agent ($49-$150/year).

Does North Dakota have a general state business license?

No. North Dakota does not issue a general statewide business license. Businesses register for specific tax programs through the State Tax Commissioner and obtain industry-specific licenses from the relevant state agencies. Many small North Dakota cities also have minimal local licensing requirements, though larger cities like Fargo, Bismarck, Grand Forks, and Minot may have local permit requirements for certain business types.

What makes North Dakota’s workers’ compensation system unique?

North Dakota is one of only four monopolistic workers’ compensation states in the US. This means private insurance companies cannot legally sell workers’ comp policies in North Dakota. Every employer with one or more employees must register with Workforce Safety & Insurance (WSI) – the state-run fund – before the employee’s first day of work. There is no grace period, and penalties for operating without WSI coverage are severe: $10,000 plus $100/day. Contact WSI at (800) 777-5033 or workforcesafety.com.

What is North Dakota’s income tax rate for business owners in 2026?

North Dakota has one of the lowest individual income tax rates in the country. The top rate is just 2.50% in 2026. LLC members and sole proprietors pay this rate on their share of business income. North Dakota’s low tax environment makes it attractive for small business owners compared to most other states. Corporate income tax rates range from 1.41% to 4.31% for C-corporations.

When is the North Dakota LLC annual report due?

North Dakota LLC annual reports are due by November 15 each year (farming/ranching LLCs: April 15). The fee is $50. The first annual report is due the November 15 following the calendar year you formed your LLC – so an LLC formed any time in 2026 owes its first annual report by November 15, 2027. Late filings are assessed a $50 penalty. Filing must be done online through FirstStop; paper annual reports are not accepted. Failure to file within 6 months of the deadline results in involuntary termination of the LLC.

What is the North Dakota sales tax rate?

North Dakota’s state sales tax rate is 5.0%. Local cities and counties may add up to approximately 3.5% on top, with some cities reaching combined rates of 8.0% to 8.5%. Register for a Sales and Use Tax Permit via the ND TAP portal (tap.tax.nd.gov) at least 30 days before you begin collecting sales tax. Prepared food sold at food trucks and restaurants is taxable. Register at the Tax Commissioner’s website: tax.nd.gov.

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About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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