The benefits of opening your business in New York City are irrefutable. With a pro-business city government, money coming in from investors, and an ever-increasing population, now is a great time to become part of the Big Apple's bright future. Below, we’ll dig into the benefits of starting a business in New York City, share NYC entrepreneurship resources, give details on getting an LLC in New York City, and provide tips from NYC business owners to navigate it all.
Why Start a Business in NYC?
New York City is the largest city in the United States, giving businesses access to the largest market of potential customers in the country. If that statistic alone isn’t enough to convince you of the benefits of starting a business in NYC, then let’s break down more enticing stats for entrepreneurs:
- The gross metropolitan product of NYC is $1.66 trillion.
- If NYC were a country, its economy would be the tenth-largest in the world.
- One in 10 businesses in NYC have started within the past year.
- The Arts, Entertainment & Recreation sector added 5,200 jobs in September 2022.
- Venture capital funding in NYC is on the rise, with venture-backed startups in NYC raising $20.2 billion in 2021.
- NYC has added more than 450,000 jobs over the past year.
More NYC Business Benefits
Pro-business leadership: NYC leadership has been doing a lot in recent years to help the city recover from pandemic-related job loss, making the city even more friendly for startups than ever before. New York City Mayor Eric Adams has passed historic legislation — and a generous recovery budget — designed to help small businesses succeed. The $98.7B recovery budget is the largest in the city’s history and focuses on boosting economic growth in all five boroughs of the city.
Two other pieces of legislation that passed in the fall of 2022 have cut back on the bureaucracy and red tape involved in starting a small business in NYC. They provide entrepreneurs with a quick, one-stop-shop online portal where they can navigate the legalities of starting a business, search for vacant space to locate their businesses, and more.
Educated talent pool: As NYC’s population continues to grow, many young, college-educated people are moving to the city. In fact, NYC is home to a uniquely high concentration of educated adults and a diverse melting pot of people from all over the globe. NYC is also home to some of the best colleges and universities in the country, offering an overflowing pool of talent to help your business thrive.
Why Business Owners Love the Big Apple
There are so many reasons entrepreneurs name NYC one of the top locations to start a business again and again, beyond the economic and strategic reasons we’ve already mentioned.
Access to Business Connections: New York City is home to the NASDAQ and the New York Stock Exchange. The sheer number of companies headquartered there, combined with the largest city by population in the U.S., creates endless opportunities to connect with customers, get funding for a business, meet investors, or find partners. No other American city delivers NYC's concentrated access to money, investors, and business opportunities.
Proving Ground for New Ideas: New York is a great market to test new products. New York consumers are some of the savviest and most demanding buyers in the world. The sheer level of competitiveness in the city means your ideas need to be great if you want to succeed.
Center of Creativity: Cities with top universities are centers of creativity and tend to be magnets for talented young professionals. Education and entrepreneurship reinforce one another; well-educated people tend to be more innovative and open to new ideas, while successful companies tend to drive advances in technology and creativity. Opening your business in a university town is often a win-win for your company and for the community.
The Capital of Powerful Industries: When contemplating where to start your business, consider other local industries. Your business may gain an advantage if you can open within a “cluster” of similar companies. New York City is a global center of many big industries, such as financial services, fashion, media, and entertainment. Depending on your industry and what you want to accomplish with your business, New York might be the best location to get in on the action.
Unlimited Creative Inspiration: New York is one of the world’s most inspiring cities. It’s hard to put a dollar value on that, but it’s true. Being an entrepreneur in New York means being surrounded by hundreds of languages and cultures, plus people from all different faiths, heritages, and walks of life. The diversity and energy of New York are like no other place in America. Many New York startups derive inspiration and new ideas from their environments; you might get a great business idea just from walking down the street. Or, you might find new business partners, clients, or investors in unexpected places.
NYC Entrepreneur Insights and Resources
We spoke with some successful NYC entrepreneurs and asked them to give us inside tips for budding NYC businesses. Here's what they said:
Secure Your Business Entity and Pay Attention to NYC’s Publishing Requirements
"I typically recommend any entrepreneur to have a business entity if their goal is to have a business and not a hobby. However, what type of business you're starting may influence how soon you need one. For example, what is the risk level of the business you're starting? An online social media coach is going to have less risk than a luxury spa opening up in NYC. But either way, you're going to want an entity to separate yourself from your business and protect your personal assets. If you do file an LLC, be aware that you have to comply with New York's outdated publishing requirement, which is much more costly if you're filing in NYC versus other counties in NY."
-Kellianne Jones, Esq., Founder of Kelli Jones Law
New York State requires all LLCs in New York, including NYC, to publish a copy of their Articles of Organization in two newspapers for six consecutive weeks. This is a unique law in the state of New York. The county (or borough) clerk will designate which newspaper you must publish your information in.
Make Sure You Register With the Department of Taxation and Finance
"If your small business sells a product in New York City, you should register properly with the New York Department of Taxation and Finance as a vendor. The tax registration should claim the property as a sales tax vendor and register in the New York Department of Labor (DOL) and withhold your unemployment insurance."
-Gretchen Boyd, President of NYC House Cleaners
Be Aware of NYC Zoning Laws
"Look into zoning laws to make sure that what you want to do, you legally can do in that location. For instance, NYC does allow certain residential areas to operate businesses out of their home, but not all businesses are allowed, and certain requirements must be met, like keeping the business area to no more than 25% of the apartment and no more than 500 square feet, not selling items that were not produced inside the apartment, no beauty salon services, no veterinary services, no signage displayed outside, etc."
-Kellianne Jones, Esq., Founder of Kelli Jones Law
Pay Attention to NYC Real Estate Taxes
"In NYC, real estate taxes on your facility are an extra 20% on top of rent money. Many people don’t know that until they fully launch and sign the lease agreement. That’s a hefty amount of money to have to pay in addition to rent money, which can be tough for a small business owner."
-Mila Alishaev, Owner & Founder of Manhattan Laser Spa
Starting a Business in NYC: A Checklist
Ready to start your business in NYC? Here’s a quick checklist to help you get going.
- Come up with your business idea.
- Choose a business name.
- Complete a New York business entity search.
- Build a plan for registering your company.
- Get an Employer Identification Number (EIN) if you want to hire employees.
- Open a business bank account.
- File a DBA in NY if you plan to do business under a name that is different from your entity name or legal name.
- Check to see if you need a license to do business in NYC.
- Start a business website.
- Find a location for your business if you want to be a brick-and-mortar company.
- Set up your business management tools like a time management platform, bookkeeping software, and financial reporting tools.
FAQs
How Much Does It Cost to Start a Business in New York?
The cost to file an LLC in New York is $200. Once you’ve filed your Articles of Organization, you'll need to consider the other fees and costs of starting a business in NYC, including:
- Certificate of Publication: $50: New York State requires all LLCs to publish a copy of their Articles of Organization in two newspapers for six weeks.
- New York LLC Name Reservation: $20: Reserving a name for your New York LLC costs $20.
- Foreign LLCs: $250 filing fee: To bring an existing LLC from another state into New York City, you will have to obtain a Certificate of Authority.
How Do I Start a Business in New York With No Money?
New York City may be known for being an expensive place to live and work, but that doesn’t mean you require a large budget to start a business there. Assuming you have the funds to cover the legalities of starting your business in NYC, including your LLC, certificate of publication, etc., there are many business ideas you can start in NYC that require little to no startup capital.
For instance, consider starting a micro-business that won’t require much capital. You could use your expertise, experience, and interests to launch a successful consulting or freelance business in New York City without spending much money upfront.
Do I Need a Business License to Sell Online in NY?
The short answer is yes, you will need a general vendor license for your NYC small business, even if you plan to sell goods online. This license is required for all who sell or lease goods or services in a public space that is not a store in NYC. NYC does not offer a separate, specific e-commerce business license, which means the best practice is to treat your online business just like a brick-and-mortar. Use the NYC Business site to determine your permitting and licensing needs.
If you're ready to make your dreams of making it in New York City a reality, it's time to seize the day. Don’t let the paperwork of filing your business entity get in the way of your goals. Incfile offers a $0 LLC filing service to get your business up and running in no time. Our streamlined process keeps the cost of filing your LLC as low as possible, helping make your NYC business dreams a reality.
Nicole Bowman
Nicole Bowman is a freelance writer who thinks turning research into stories is the best gig ever. She started writing billboards back in 2002, worked in book publishing in New York for many years and now she creates all sorts of engaging content for the web. Nicole lives in Rehoboth Beach, DE, with her husband, two sons and their poodle, Tootsie. She loves the great outdoors, bookstores and tennis.
