How to move my company out of Hawaii

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The Redomestication Process in a Nutshell

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3. We submit the legal filings to the states.

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1-3 months

4. Approved! ✅

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Did you know? The average business that moves to a state without state-level income tax saves over $12,500 in taxes per year.

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Redomestication, also known as redomiciling, refers to the lesser-known legal process of transferring or moving the "home state" of an existing Corporation, partnership, or LLC, from Hawaii to a new state. It means keeping your existing company name, credit, and federal employer identification number (FEIN) without wasting time and money creating a new business entity, applying for foreign registration, or moving assets between companies.
— Prof. Chad D. Cummings, Esq., CPA

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How to move a company out of Hawaii without disrupting operations

When business owners ask how to move their company out of Hawaii, the goal is rarely symbolic. It is typically practical: reducing ongoing exposure to Hawaii’s tax environment, avoiding duplicative compliance obligations, and positioning the entity in a jurisdiction whose corporate statutes and administrative processes are more aligned with the company’s current operations and growth plans. The legal and accounting risk is not the decision to leave; it is attempting to relocate the entity through an ill-fitting transaction that unintentionally breaks continuity.

The most effective solution, in most cases, is redomestication (statutory conversion), which transfers the entity’s “home state” while preserving its legal identity. This approach is designed to avoid the operational turmoil that can arise when owners form a new entity, re-paper contracts, re-open bank accounts, and reconfigure payroll and vendor systems. For clients seeking a defensible, streamlined way to relocate, guidance on how to move a company out of Hawaii through redomestication is the appropriate starting point.

Why leaving Hawaii often improves tax efficiency and administrative burden

From a CPA’s perspective, the question is not merely how to move a company out of Hawaii, but how to do so in a manner that reduces recurring compliance drag. Businesses that have materially shifted operations out of Hawaii can face a mismatch between where value is created and where administrative and tax filings are required. That mismatch can result in additional professional fees, internal staff time, and preventable errors in multi-state compliance.

When an entity is properly redomesticated and operations are truly moved, the company can often simplify state-level reporting and reduce the risk of paying for “two systems” at once. By contrast, foreign registration tends to preserve continuing obligations in the former state even when the company has no meaningful intent to return. For business owners evaluating how to move their company out of Hawaii with long-term efficiency in mind, redomestication is typically the most direct mechanism to align the company’s legal domicile with its current business reality.

Redomestication is the cleanest legal mechanism for relocating an existing entity

Many owners searching for how to move their company out of Hawaii assume that relocation requires dissolving the Hawaii entity and creating a replacement elsewhere. That assumption is both costly and risky. Dissolution is not a relocation strategy; it is an end-of-life event for the entity, and it commonly triggers avoidable administrative work such as re-titling assets, re-signing leases, and re-papering financing arrangements.

Redomestication, by contrast, is a continuity transaction: the same entity continues, but with a new home state. In practical terms, that continuity is what allows owners to protect operational stability while improving the business’s legal and tax posture. If the objective is a reliable plan for how to move a company out of Hawaii without starting over, redomestication is the superior framework because it is structured to preserve what already works.

Preserving your FEIN, contracts, and business identity is not optional—it is the point

One of the most consequential misconceptions about how to move a company out of Hawaii is the belief that a new state filing necessarily requires a new federal employer identification number. In reality, the FEIN is embedded in payroll systems, vendor onboarding, 1099 reporting, banking, merchant processing, and a host of internal controls. Changing it can create cascading complications, including mismatches in tax deposits and reporting cycles.

Redomestication is favored because it is designed to preserve continuity: the company generally keeps its existing FEIN, maintains existing contractual relationships, and—in most cases—continues using the same name. That is not a marketing point; it is a risk-management benefit. If the company has customers, subscription arrangements, software licenses, or vendor terms negotiated over years, a strategy focused on how to move the company out of Hawaii should prioritize maintaining those agreements rather than triggering needless amendments or novations.

Why foreign registration and mergers are frequently recommended, yet often inferior

Businesses exploring how to move their company out of Hawaii often receive advice to simply register as a foreign entity in the new state. That approach is sometimes adequate for companies that still intend to maintain meaningful operations in Hawaii. However, when the company has permanently moved, foreign registration often leads to precisely what owners seek to avoid: ongoing annual reports, fees, registered agent costs, and continued administrative attention in the former jurisdiction.

Mergers can be even more problematic. A merger may be used to collapse a Hawaii entity into a newly formed entity in another state, but it typically introduces extra legal steps, greater expense, and more opportunities for error—particularly if approvals, filings, and downstream contract/banking adjustments are not sequenced correctly. For owners seeking a disciplined explanation of how to move a company out of Hawaii using redomestication rather than a merger, the key consideration is that redomestication usually accomplishes the same end result with far less legal and operational friction.

Procedural issues that must be handled correctly when relocating out of Hawaii

The technical aspect of how to move a company out of Hawaii is not limited to a single filing. The relocation must be coordinated so that the entity’s organizational documents, state records, and governance approvals are internally consistent. Depending on entity type and ownership structure, the company may need member, manager, director, and/or shareholder approvals, updated governing documents aligned to the new state’s statutory framework, and a clear plan for registered agent and principal office updates.

Additionally, a careful practitioner verifies that the redomestication will preserve the intended capital structure and authority to sign on behalf of the entity. That may require reconciling inconsistent operating agreement provisions, cleaning up historical amendments, and ensuring that the company’s public record matches its internal governance. In short, sound execution of how to move the company out of Hawaii requires attention to both “front-end” filings and “back-end” governance hygiene so the business remains financeable, bankable, and contract-ready.

Common misconceptions that create expensive mistakes

The most expensive misconception about how to move a company out of Hawaii is the belief that the cheapest online option is “close enough.” Redomestication is not a commodity form. It is a state-to-state legal migration that must be tailored to the entity’s type, ownership, and business realities. When performed incorrectly, owners can face rejection by a Secretary of State, loss of good standing, gaps in authority that complicate financing, and avoidable legal bills to repair defective filings.

A second misconception is that dissolving the Hawaii entity and re-forming elsewhere is “cleaner.” In practice, dissolution can be the opposite of clean: it can force assignment of contracts, re-titling of assets, and re-approval by counterparties who have no obligation to cooperate. For companies with employees, licenses, financing, recurring customers, or regulated relationships, the prudent solution for how to move a business out of Hawaii is the one that preserves continuity while minimizing transactional exposure—precisely what redomestication is intended to do.

Practical outcomes: what a well-executed redomestication accomplishes

A well-planned redomestication provides a clear, defensible answer to how to move a company out of Hawaii while maintaining operational momentum. The entity continues as the same legal “person,” generally retaining its FEIN, its contractual footprint, and its brand identity. Internally, the company’s leadership can focus on revenue and strategy rather than re-building administrative infrastructure that already functions.

Equally important, redomestication positions the entity for cleaner compliance in the new home state, with reduced ongoing entanglement in Hawaii when the company has genuinely ceased operations there. For decision-makers evaluating how to move a company out of Hawaii through a predictable, flat-fee redomestication process, the most compelling benefit is that the business can relocate without the disruption and hidden costs that accompany foreign registration, merger structures, or dissolution-based “do-overs.”

Conclusion: the most defensible approach to moving a company out of Hawaii

When clients request a clear answer to how to move their company out of Hawaii, the analysis must be both legal and financial. The best solution is the one that reduces future compliance burden, strengthens operational continuity, and avoids unnecessary tax and administrative risk. In the majority of relocation scenarios where Hawaii operations have ended and the company is establishing its long-term base elsewhere, redomestication is the most efficient and strategically sound method.

Accordingly, business owners should not treat this decision as a clerical filing. It is a foundational corporate action with lasting consequences for contracts, identity, compliance posture, and day-to-day operations. To proceed with a reliable roadmap for how to move a company out of Hawaii via redomestication, engage a practitioner who can execute the conversion correctly, coordinate the state filings, and preserve the assets that matter most: your FEIN, your contracts, and your business reputation.

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Domestication vs. Foreign Registration vs. Merger vs. Dissolution: A Comparison

Domestication is, in many circumstances, far preferable to registering an LLC or corporation as a foreign entity, especially where the LLC or corporation has permanently moved its operations and will not be returning to the prior state in the near future.

Some attorneys, unfortunately, confuse their clients by recommending a foreign entity registration in the new state, or worse, a merger, where a redomestication™ would have accomplished the goals of moving their business to a new state efficiently and effectively.

The top seven benefits of moving your company (LLC, corporation, or partnership) to a new state via redomestication™ to transfer your business include:

1. Maintaining your existing federal employer identification number, eliminating the tax headaches of forming a new company or transferring assets between companies (and inadvertently triggering a hefty tax bill from the IRS) when you move your business to a new state;
2. Keeping your existing business credit history and track record, safeguarding your reputation with clients, vendors, and creditors when moving your LLC or corporation to a new state;
3. Continuing your existing business name (in almost every case), protecting your most important assets when moving your company to a new state: your brand, reputation, and time you have already invested in search engine optimization;
4. Maintaining your existing contracts with customers and vendors because moving your business to a new state via redomestication™ does not create a new company: it maintains your existing company, saving you dozens (or even hundreds) of hours re-writing (and re-negotiating) contracts and changing banks;
5. Eliminating the need to continue paying registration fees and taxes in your prior state (assuming you have discontinued your operations there and have permanently relocated to a new state), potentially saving you tens of thousands of dollars (or more) in state taxes every quarter when you move your business to a new state;
6. Avoiding unnecessary IRS scrutiny because moving your LLC or corporation to a new state via redomestication™ is a tax-free transaction under the Internal Revenue Code; and
7. Reducing the amount of time you spend on administrative filings, saving you untold hours annually, by moving your company to a new state.

Before taking the "penny wise and pound foolish" approach of foreign entity registration or spending countless hours and exorbitant legal fees (and possibly taxes) on a merger or merger-gone-wrong to move your company to a new state, ensure you understand your options.

In most circumstances, redomestication™ (and not a foreign entity registration or costly and complicated merger) is the best route to achieve a change in company domicile to a new state.

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