How to Form an LLC in Oregon (2025 Guide) | Costs, Taxes & Requirements

Did you know that Oregon is home to over 400,000 small businesses, accounting for more than 99% of all businesses in the state?¹ This business-friendly climate, combined with the absence of a state sales tax and relatively low filing fees, makes Oregon an attractive destination for entrepreneurs looking to launch a new venture.

One of the most popular and flexible ways to get started is by forming a Limited Liability Company (LLC). If you're wondering how to form an LLC in Oregon, this comprehensive guide will walk you through every step, from choosing your business name to understanding tax obligations, registering your business entity, and maintaining your LLC operating agreement. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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How to Start an LLC in Oregon (Step-by-Step)

Step 1: Choose a Business Name

Your first task in the Oregon LLC registration process is selecting a unique and compliant business name. Oregon law requires the name to be distinguishable from other registered businesses and to include “Limited Liability Company,” or the abbreviations “LLC” or “L.L.C.”

• Use the Oregon Business Name Search to confirm availability.
• If you’re not ready to register, you can reserve your chosen name for 120 days for a $100 fee.

Step 2: Appoint a Registered Agent

Every Oregon LLC must designate a registered agent, which is an individual or business entity authorized to receive legal documents on behalf of the company. The agent must have a physical address in Oregon (no P.O. boxes).

You can act as your own registered agent, appoint someone else, or hire a registered agent service.

Step 3: File the Articles of Organization

To officially form your LLC, file the Articles of Organization with the Oregon Secretary of State.²

• You can file online or by mail.
• The filing fee is $100.
• Required information includes:
• LLC name and address.
• Registered agent information.
• Whether the LLC will be managed by members or managers.
• Organizer(s) details.
• Optional: duration and professional service details.

Once accepted, you'll receive a Certificate of Formation, confirming that your separate business entity is officially recognized.

Step 4: Draft an LLC Operating Agreement

Though not legally required in Oregon, creating an LLC operating agreement is highly recommended.

This internal document outlines:

• Ownership percentages.
• Management roles and decision-making processes.
• Profit and loss distribution.
• Procedures for adding/removing members.
• Dissolution guidelines.

A solid operating agreement strengthens your limited liability protection and clarifies how the business will be governed.

Step 5: Obtain an Employer Identification Number (EIN)

An EIN is like a Social Security number for your business. It’s required if your LLC:

• Has employees.
• Has multiple members.
• Needs to open a business bank account.

You can apply for an EIN for free via the IRS website.³

Step 6: Comply with Tax Obligations

Understand what your tax obligations are to stay compliant.

• Oregon does not have a state sales tax, which is a perk for businesses.
• Most LLCs need to register for a Business Identification Number (BIN) with the Oregon Department of Revenue for state payroll taxes.
• Local taxes (such as Portland’s Business License Tax) may apply.
• Consult a CPA to determine your full state and federal tax responsibilities.

Step 7: Check for Required Business Licenses

Oregon does not offer a universal business license, but many businesses are still required to obtain specific licenses or permits based on their industry and location. Requirements vary depending on the nature of your operations, so it’s important to check whether your business falls under state or local regulations.

The Oregon License Directory is the best resource for identifying what applies to your business.⁴ Commonly regulated industries include construction, food service, health care, and real estate.

Step 8: File Annual Reports

All Oregon LLCs are required to file an Annual Report with the Secretary of State. This report is due each year during the anniversary month of the LLC’s formation and comes with a $100 filing fee. It serves to update key business information, such as the company’s address and registered agent details. The filing process is simple and can be completed online through the Secretary of State’s website.⁵

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What are the Business Requirements for an Oregon LLC?

To recap, the key business requirements for Oregon LLC registration include:

• Unique and compliant business name.
• Designation of a registered agent (individual or business entity).
• Filing of Articles of Organization.
• Drafting of an LLC operating agreement (recommended).
• Obtaining an EIN.
• Compliance with state and local tax obligations.
• Filing an Annual Report.
• Applying for applicable business licenses.

What Are the Benefits of Starting an LLC in Oregon?

There are several advantages to choosing an LLC business structure in Oregon:

1. Personal Asset Protection

An LLC is a separate business entity, which means your personal assets (home, car, bank accounts) are generally protected from business debts or lawsuits.

2. Tax Flexibility

LLCs are considered pass-through entities, meaning the business itself doesn’t pay federal income tax. Instead, profits and losses pass through to the members and are reported on their personal income tax returns, allowing owners to avoid the double taxation typically faced by corporations.

This business structure is especially appealing in Oregon, where the state imposes no sales tax. Most Oregon LLCs are not subject to franchise or privilege taxes, making the overall tax obligations significantly lighter compared to many other states.

3. Operational Flexibility

Oregon LLCs can be managed either by the members themselves or by appointed managers, allowing you to structure control based on the needs of the business. Unlike corporations, which require a formal board of directors, officer roles, and detailed corporate governance procedures, an Oregon LLC offers a streamlined model with fewer internal formalities.

4. Simple Maintenance

With fewer reporting requirements and low annual fees, Oregon LLCs are easy to maintain compared to corporations. The state requires only one annual report to be filed with the Secretary of State, and the associated fee is a flat $100. There are no burdensome quarterly filings, extensive disclosures, or complex compliance requirements.

How Much Does It Cost to Start an LLC in Oregon?

Here’s a breakdown of the typical costs associated with Oregon LLC registration:

Item	Cost
Name Reservation (optional)	$100
Articles of Organization	$100
Annual Report	$100/year
Registered Agent (if outsourced)	Varies
Business Licenses (if needed)	Varies

Total (minimum startup): $100–$300+

Can I Open an LLC in Oregon Without Living There?

You do not need to live in Oregon to form or manage an LLC there. Oregon allows nonresidents to establish a limited liability company, but you must appoint a **registered agent with a physical address **in the state. All LLCs, regardless of the owner’s location, must also meet Oregon’s ongoing requirements, including annual reporting.

Can a Nonresident Open a Company in Oregon?

Yes, non-U.S. residents can form an LLC in Oregon. You do not need to be a U.S. citizen or have a Social Security number.

What you do need is the following:

• A registered agent located in Oregon.
• To open a business bank account, you may need an ITIN (Individual Taxpayer Identification Number).
• You are still responsible for U.S. tax compliance on income earned in the U.S.

Seeking legal or tax advice from a professional is highly recommended for international founders.

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Oregon LLC vs Other States: A Comparison

When evaluating where to form an LLC, it's smart to compare Oregon to other competitive states. Here's how it stacks up against Washington, California, and Texas, each known for distinct business climates:

Feature	Oregon	Washington	California	Texas
Filing Fee	$100	$200	$70	$300
Annual Report Fee	$100	$60	$800 (franchise tax min)	$0 (but franchise tax applies)
State Sales Tax	None	6.5% base	7.25% base	6.25% base
Franchise/Business Tax	None (most LLCs)	B&O tax on revenue	Minimum $800	Franchise tax
Privacy Protection	Moderate	Low	Low	Moderate
Ease of Setup	High	Moderate	Moderate	High

Oregon is ideal for small to mid-sized local businesses looking for a low-cost, low-tax environment. Thanks to no sales tax and a simple $100 annual fee, it’s a financially predictable place to start your LLC.

Washington can be a solid option for high-revenue businesses, especially with no personal income tax. However, its Business & Occupation (B&O) tax on gross receipts may be a burden for low-margin companies.

California, while offering access to the country’s largest consumer market, is one of the most expensive states for LLCs. The mandatory $800 minimum franchise tax and complex compliance rules make it more suitable for funded startups or larger enterprises.

Texas is a popular destination for scalable businesses and tech companies thanks to its business-friendly environment and no personal income tax. While LLCs do face a franchise tax once certain revenue thresholds are met, the state overall offers strong growth potential with moderate compliance complexity.

FAQs About Oregon LLCs

Does an Oregon LLC Offer Privacy Protection?

Oregon provides moderate privacy for LLC owners. While at least one member or manager must be listed in public filings, full ownership disclosure is not required. However, it's not as private as states like Wyoming or Delaware.

Why Do People Use Oregon for LLCs?

Oregon is popular for LLC formation due to its lack of sales tax, no franchise tax, and low annual fees. The setup process is quick and straightforward, especially for local entrepreneurs.

Is Oregon LLC Tax-Free?

Oregon LLCs aren’t entirely tax-free. They benefit from no state sales tax and no franchise tax for most businesses, but income is still taxed at the federal level and through Oregon’s personal income tax.

What Are the Disadvantages of an Oregon LLC?

The main drawbacks include relatively high state income tax and only moderate privacy. For companies seeking investor access or stronger legal protections, other states may offer more advantages.

Conclusion

If you’re exploring how to form an LLC in Oregon, rest assured, the process is streamlined, cost-effective, and flexible. Whether you're a local entrepreneur or an out-of-state investor, Oregon's favorable tax policies, low filing fees, and supportive small business environment make it an attractive place to form a limited liability company.

By following the steps outlined above—choosing a compliant business name, designating a registered agent, filing your Articles of Organization, and meeting all tax and license requirements—you can establish a legally sound and well-structured business entity in Oregon.

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Sources:

Oregon Profile | Small Business Administration
Oregon Secretary of State
IRS website
Oregon License Directory
Secretary of State’s website