Business Incentives

From networking to financing, there are many business resources and financial incentives to help you start and grow your business. Explore what’s available.

 City Incentives

​​​​Tax Advanta​ges

  • ​​​No inventory tax for manufacturers
  • No tax on business equipment for manufacturers
  • No tax on machinery and tools equipment
  • Flat $50 business license fee for first 2 years of operations in the City of Virginia Beach (manufacturers are exempt)

Economic Development Investment Program (EDIP)

The Virginia Beach Development Authority can provide EDIP funds to qualifying businesses that are locating to or expanding in the city. The EDIP was established to support projects that create new jobs and capital investment in Virginia Beach. EDIP monies may be used for allowable infrastructure improvements and certain other project purposes, which will help to reduce the costs of relocating and expanding in our community.  Learn more a​bout the p​rogram​.​ 

Business License Incentive Program for New Businesses

This program was instituted by city council with an effective date of January 1, 2012.  The program allows qualifying businesses that anticipate gross receipts in excess of $100,000 to pay a maximum license fee of $50 for each of the first 2 license years.  

Business License Incentives for Maritime Shipping Companies

The business license tax rate for marine cargo shipping businesses (not arrangement of transportation, haulers, or deliverers) shall be 0.36 % of the gross receipts during the preceding year up to $500,000 plus 0.000001 % of gross receipts in excess of $500,000.

Industrial Revenue Bonds

The Virginia Beach Development Authority issues Industrial Revenue Bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities. Upon repayment of the bonds, ownership of the facilities transfers to the private-sector entity served by the bond issuance. Since these bonds are tax-exempt, the interest rates offered are significantly lower than traditional forms of financing.

Fast-Track Permitting Program

Fast-tracking streamlines permitting and construction so custom office buildings and industrial facilities can be built and operational in as little as six months. This is at least 50% less time than the typical non-fast-track construction time of 12 to 18 months or more. The Department of Economic Development will also assist fast-track companies in locating and setting up temporary training facilities at our Advanced Technology Center during construction so business operations can begin simultaneously with the move-in date.

Energy-Efficient Buildings Tax Reduction​

A special tax rate is available to qualified residential and commercial energy-efficient buildings, not including the land on which they are located. Qualified buildings must be determined to be an energy-efficient building by a qualified licensed engineer or contractor who is not related to th​e applicant, as required by Section 58.1-3221.2 of the Code of Virginia. The current reduced rate is $0.84 per $100 of assessed value. 

YesOceana APZ-1 Incentives

The YesOceana program was developed to meet the requirements of the Base Realignment and Closure (BRAC) Commission to protect our citizens and keep the Navy’s East Coast master jet base, Naval Air Station (NAS) Oceana, in Virginia Beach. This innovative program consists of zoning ordinances and economic incentives to foster the conversion of nonconforming businesses in the Accident Potential Zone 1 (APZ-1) into conforming ones and relocating ones that can not be converted to another part of Virginia Beach. ​

Public-Private Partnerships

Virginia Beach is proud to be a part of several successful public-private partnerships. Through these agreements, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.
Successful examples include:​​

  • Tax Increment Financing (TIF)
  • Parking Garage Development
  • Infrastructure Development
  • Virginia Beach Amphitheater
  • Town Center 
  • 31st Street Hilton Hotel
  • Virginia Beach Sportsplex and Field House​
  • Virginia Beach National Golf Course
  • Heron Ridge Golf Course
  • 25th Street Mixed-Use and Parking Development
  • Sentara Princess Anne Hospital
  • Operation Smile
  • US Field Hockey Training Facility ​​

 State Incentives

In addition to the many programs offered by the City of Virginia Beach, the Commonwealth of Virginia also offers a number of incentives to assist business growth and encourage startups.  These include: financial assistance, facilities development grants, tax credits and exemptions.  Virginia also offers work-force training and technical support programs.

Below are a few of the most popul ar programs.  For more information, refer to the 2016-2017  Virginia Guide to Business Incentives​. ​

Commonwealth’s Opportunity Fund

The Commonwealth’s Opportunity Fund (COF) is a discretionary financial incentive established to support projects that

create new jobs and investment in accordance with certain criteria established by state legislation. Grants are made to the community and may be used for such things as site acquisition and development; transportation access; public or private utility extension or capacity development; construction or build-out of publicly or privately owned buildings or training.

Grant requests are made by the co​mmunity for a project under the following conditions:

  • Projects must meet investment, job creation, and wage minimums to be eligible
  • Matching local financial participation is required on a dollar-for-dollar basis (cash or in-kind)
  • Public announcement of the project must be coordinated by the Virginia Economic Development Partnership and the
  • Governor’s Office (neither the company nor the locality may publicly confirm the proposed project)
  • Grants are made at the discretion of the Governor​​

Once a company decides on a Virginia location, the community works with the state within the guidelines of the program to seek a COF award. The application and success of the grant request will be based on the project’s eligibility and the locality’s financial support toward the project, as well as the actual project requirements and availability of funds. The community is required to enter into a performance agreement with the company before receipt of the grant to document performance expectations.​​

Virginia Jobs Investment Program

The Virginia Jobs Investment Program (VJIP) is an incentive program offering customized recruiting and training assistance to companies that are creating new jobs or experiencing technological change. The program is designed to reduce human resource development cost by providing direct funding to qualifying new and expanding companies.

​Virginia Investment Partnership Act/Major Eligible Employer Grant

The Virginia Investment Partnership (VIP) Grant and the Major Eligible Employer Grant (MEE) are discretionary performance incentives designed to encourage continued capital investment by Virginia companies, resulting in added capacity, modernization, increased productivity, or the creation, development and utilization of advanced technology.

The Virginia Economic Development Incentive Grant

The Virginia Economic Development Incentive Grant (VEDIG) is a discretionary performance incentive, designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operations in Virginia.

​Corporate Inc​​​ome Tax 

The Virginia corporate income tax rate is a flat 6 percent; however, the sales factor in the state's income apportionment formula is double weighted, benefiting companies with high payrolls and property in Virginia.  

​Sales an​d Use Tax Exemptions

Virginia has one of the lowest sales tax rates in the country - 6 percent (4.3 percent state,  1 percent local, 0.7 percent transportation). There are some exemptions, such as items purchased for resale or used in manufacturing, pollution control devices, purchases used in research and development, and charges for utilities and Internet access.

Property Tax I​​ncentives 

Virginia does not tax property at the state level. Real estate and tangible personal property are taxed at the local level.  Items not taxed in Virginia include manufacturers' inventory, intangible property and furniture/fixtures. 

Worker Retraining Tax Credit

Employers can receive tax credits for 30 percent of expenditures on worker retraining programs for qualified employees. The credit is capped at $2.5 million in a taxable year. Eligible programs include courses at Virginia community colleges certified by the Virginia Department of Business Assistance, or apprenticeship agreements certified by the Virginia Apprenticeship Council. For more information, visit the Virginia Department of Business Assistance ​website.

Major Business Facility Job Tax Credit​

Companies locating or expanding in Virginia can receive a corporate income tax credit for each new full-time job created beyond 50 jobs - or 25 jobs for companies locating in an Enterprise Zone or economically distressed area. Jobs that do not qualify include seasonal or building-related and security positions.

​Virginia Leaders in Ex​port Trade (VALET)

This program assists companies throughout Virginia in expanding their international business. VALET offers a powerful combination of capital resources provided by the state along with professional services from expert, private-sector partners. Each year, 25 qualifying companies ramp up their global marketing efforts through this program. Companies graduate from this comprehensive, two-year business acceleration program with greater focus on the potential of export trade profits. On average, companies experience an 54 percent increase in international sales during and immediately following the program. Learn more about VALET. ​

Green Job Crea​​​tion Tax Credit

This tax credit for "green" companies awards an annual tax credit of $500 for each salary that is $50,000 or more for up to 350 jobs. The credit is allowed in the first taxable year after the job has been filled for at least one year and in each of the four succeeding years. Green jobs are related to the field of renewable, alternative energies. ​

​​Co​n​t​​act

Virginia Department of Taxation
P.O. Box 115 Richmond, Virginia 23218
(804) 367-8037
www.tax.virginia.gov

 Financing Programs

​Business Information​ Services​​

Virginia Business One Stop is an interactive portal designed to accelerate business formation and provide information for existing businesses. The online registration system will walk a potential business owner through each step needed to establish their new business. In addition, BOS helps existing businesses expand. The tool streamlines business-registration paperwork across seven agencies.

​Center for Innovative Techn​​​ology

CIT helps grow Virginia's technology industry. Its CIT Entrepreneur program provides up to $100,000 in funding for promising high-growth technology companies and helps owners identify potential equity investors.Contac​t
Center for Innovative Technology
2214 Rock Hill Road, Suite 600
Herndon, VA 20170-4228
(703) 689-3000
www.cit.orgVirginia Small B​usiness Financing Authority (VSBFA)

VSBFA “Small Business” Definition

  1. Must be operating in Virginia, and licensed/good standing with SCC, local, or other licensing authority
  2. Meet ONE of the following:  Under $10M annual revenues or under $2 million tangible net worth or have less than 250 Virginia employees (some programs also require less than 750 total employees), or be a 501c3. ​

All real estate loans are “owner occupied commercial real estate.” No investment or residential.


VSBFA Direct Loan Progra​ms​

VSBFA makes a loan directly to Borrower typically either subordinate to the bank or secured by separate assets. Borrower applies directly to VSBFA which underwrites, closes, and manages the credit. ​

For all VSBFA Loans:

  • Response time once VSBFA has received all required information: 1 week if VSBFA exposure is no more than $500,000 approximately 1 month if VSBFA exposure exceeds $500,000
  • Existing companies must have history of profitable operations and satisfactory debt payment.
  • Startups must have business plans and projections.
  • VSBFA requires guarantees and pledge of all available business and personal collateral.
  • Minimum 10% cash equity expected for startups, more for existing businesses.
  • VSBFA programs cannot be used to compensate for fundamental business weakness.
  • No prepayment fees or closing costs aside from direct transaction costs. 

Loan Types

  • Economic Development Loan   

    Maximum 40% of total project cost not to exceed $500,000
    For real estate and improvements, furniture/fixtures/equipment, permanent working capital
    $500 application fee, recent fixed rate 4%
    Start up or existing business
    Focus on acceptable job creation/retention relative to loan amount                                                                                                 

  • Micro-loan        

    Maximum $10,000 -25,000
    48 month repayment
    $100 fee, 6.25% fixed rate
    Any business purpose other than investment real estate
    Must have been operational at least 2 years
    Owners’ credit scores must be at least 650 each

  • Child Care Loan

    Maximum $150,000 per location for centers, $10,000 for home based providers
    60 month repayment
    Borrower must be licensed and in good standing with Virginia Department of Social Services.
    Funds materials, equipment, supplies,  playground, mini-buses, fencing
    $100 application fee, 4% fixed rate

  • Bank Credit Support Programs

    Bank underwrites/commits to loan subject to VSBFA involvement.

  • Cash Collateral

    VSBFA pledges cash collateral to the bank to help back a business loan
    Maximum $500,000 or 40% of the loan amount, whichever is less.
    Maximum involvement—5 years for term loans, 3 years for credit lines
    Cost  $200 application fee
    Loan Guaranty-VSBFA provides an additional guaranty to the bank
    Maximum 75% of the loan amount or $750,000, whichever is less
    Maximum involvement-7 years for term loans, 5 years for credit lines
    Cost $200 application fee, 1.5% of the guaranteed amount due at closing

  • Loan Participation

    VSBFA buys a portion of a bank loan
    Maximum $500,000 or 40% of the loan amount, whichever is less.
    Maximum hold period 10 years
    $500 application fee, VSBFA receives same interest rate as Bank

Contact

Mary Jo Sisson-Vaughan,
Regional Lending Manager, Virginia Small Business Loan Programs​
Hampton Roads, Southern VA, Central VA Areas
(804)​ 371-8184​​​​