Hawaii's healthcare compliance requirements have a few quirks that can seriously trip you up—especially if you're not familiar with the state's unique quarterly filing deadlines and professional corporation ownership restrictions. Unlike many mainland states offering multiple entity options, Hawaii maintains a structured approach centered on professional corporations governed by Hawaii Revised Statutes Chapter 415A. This framework creates specific compliance requirements that differ substantially from other jurisdictions.
In this guide, you'll learn which entity types you can actually use in Hawaii (spoiler: PLLCs aren't an option), how to navigate the formation process with exact fees and deadlines, what ongoing compliance obligations you'll face, and how to coordinate entity management with professional licensing requirements.
Professional Corporations represent the only entity type in Hawaii with explicit statutory provisions authorizing healthcare professional practice. Governed by HRS Chapter 415A §§415A-1 through §415A-31, professional corporations must meet strict ownership and governance requirements that distinguish them from standard business corporations.
Per HRS §415A-6, healthcare professions explicitly authorized to form professional corporations include medical practitioners (physicians and surgeons), dentists, nurses, and pharmacists. The statute requires all shareholders to be licensed professionals qualified to provide the services the corporation offers (HRS §415A-9). This ownership restriction effectively prevents non-physicians from holding equity interests in medical professional corporations, creating a barrier to private equity ownership and hospital system acquisition of physician practices.
Under HRS §415A-14, at least half of all directors must be qualified persons (licensed in the profession the corporation practices), and all officers except the secretary and treasurer must be qualified persons. This ensures professional control over corporate decision-making while permitting limited administrative roles for non-licensed personnel.
Your corporate name must include "Corporation," "Corp.," "Incorporated," "Inc.," "Limited," or "Ltd." per HRS §415A-8. Hawaii law doesn't require "PC" or "Professional Corporation" as a mandatory designator, though many entities include these terms for clarity.
Hawaii does not recognize Professional Limited Liability Companies (PLLCs) for healthcare practice. The state's Uniform Limited Liability Company Act (HRS Chapter 428) doesn't include provisions for professional practice through LLC structures. If you're looking for limited liability protection, you'll need to form a Professional Corporation under HRS Chapter 415A instead—it's the only entity type with explicit statutory authority for physician, dentist, nurse, and pharmacist practice in Hawaii.
Hawaii does not enforce a traditional Corporate Practice of Medicine (CPOM) doctrine through explicit statutory prohibition. HRS Chapter 453, which governs physician licensing, contains no express prohibition on corporate employment of physicians or corporate delivery of medical services. This contrasts notably with Hawaii's dental statute (HRS Chapter 448 §§448-14.5, 448-15, 448-17), which explicitly prohibits non-dentist ownership—demonstrating that the legislature knows how to enact CPOM-type restrictions when desired. Legal scholarship confirms that "Hawaii is not a strict CPOM state but has legal frameworks that imply restrictions on corporate practice, emphasizing licensure and ownership restrictions" (Gottfried & Rosenstein, Nova Law Review, 2025).
In practice, this means you can structure physician employment arrangements and hospital contracts as long as physicians maintain control over medical decisions and comply with the ownership requirements under HRS §415A-9 and §415A-14. You'll need to ensure your professional corporation maintains physician-only ownership and physician-controlled governance while preserving professional independence in medical decision-making.
Your Articles of Incorporation must include the licensed professions your corporation will practice, corporate officers and directors (all licensed in the stated profession), registered agent information with complete Hawaii street address, and corporate name complying with HRS §415A-8 naming requirements.
You can file through the Hawaii Business Express online portal, by mail to P.O. Box 40, Honolulu, HI 96810, in person at 335 Merchant Street, Room 201, Honolulu, HI 96813, or by fax to (808) 586-2733.
Hawaii uses a quarterly deadline system based on when you formed your entity. Per the DCCA Domestic Corporation Information Guide and LLC Information Guide, you'll need to file your annual reports according to this schedule:
Your Formation Quarter and Corresponding Annual Report Deadline:
Annual report filing fees differ based on submission method. Online filing through Hawaii Business Express costs $12.50, while paper filing costs $15.00. All professional corporations face identical annual report fee structures regardless of revenue, number of shareholders, or practice size.
Late filing triggers escalating penalties. The base late fee is $10.00 per year of delinquency, with potential additional penalties of up to $100.00 for each 30-day period of non-compliance. After two consecutive years without filing annual reports, your entity faces automatic administrative dissolution or termination, which removes good standing status and requires formal reinstatement with additional fees.
Hawaii charges a General Excise Tax (GET) on your gross receipts instead of a traditional sales tax. You'll need to register with the Hawaii Department of Taxation and remit GET on applicable income.
The base statewide GET rate is 4.0%, with an additional 0.5% county surcharge in Maui County (effective January 1, 2024), creating a total effective rate of 4.0% to 4.5% depending on your practice location. The Department of Taxation assigns filing frequencies (monthly, quarterly, semi-annual, or annual) based on your gross income level.
Hawaii does not impose franchise tax on professional corporations or professional LLCs, distinguishing it from states like California, Delaware, and Texas.
Act 47 (effective January 1, 2026) exempts Medicare, Medicaid, and TRICARE payments from General Excise Tax—including direct program payments and patient deductibles, copayments, and coinsurance. If you receive significant revenue from these programs, you'll need to implement separate tracking systems to distinguish exempt payments from taxable revenue before the 2026 effective date. Consider working with a Hawaii tax professional to set up proper accounting systems that can handle this revenue categorization.
No other legislative changes enacted during the 2024-2026 session period affect annual report filing fees, deadlines, or fundamental tax obligations for healthcare professional entities.
The Hawaii Medical Board, operating under the Department of Commerce and Consumer Affairs Professional and Vocational Licensing Division, administers physician licensing and renewal. The Board maintains offices at 335 Merchant Street, Room 301, Honolulu, HI 96813, with mailing address at P.O. Box 3469, Honolulu, HI 96801. Contact the Board at (808) 586-2695 or pvlbme@dcca.hawaii.gov.
Per Hawaii Administrative Rules Chapter 85, Subchapter 5, you'll need to complete 40 hours of continuing medical education (CME) every two years to maintain licensure. This total includes mandatory category requirements:
Required CME Components:
All CME must qualify as Category 1 or Category 1A credits as defined by recognized accrediting bodies (HAR 16-85-34). Unlike many states, Hawaii doesn't mandate specific CME hours in opioid prescribing, ethics, cultural competency, or risk management beyond the pain management and medical error prevention requirements.
You must maintain CME records for at least four years and certify compliance during the biennial renewal process. The Hawaii Medical Board conducts random CME audits in October of odd-numbered years, with the next audit scheduled for October 2025. False certification of CME compliance can result in disciplinary action against medical licenses.
Renewal fees differ based on practice setting. Standard physician (MD) licenses require $402.00 for on-time renewal or $408.00 for late restoration. Government physicians pay reduced rates of $171.00 for on-time renewal or $271.00 for late restoration.
You can renew your license online through the MyPVL portal during the renewal period (November 10 through January 31 of even-numbered years) or submit hardcopy forms mailed in early November. The Medical Board recommends online renewal for faster processing.
HRS Chapter 453 and HAR Title 16 Chapter 85 contain no explicit provisions directly tying your licensing status to entity ownership. However, HRS Chapter 415A requires all professional corporation shareholders, at least half of directors, and all officers (except secretary and treasurer) to be licensed professionals.
You should monitor that all physician-shareholders and officer-physicians maintain active licensure throughout their tenure. A lapsed license would render an individual ineligible to maintain these corporate roles under the Professional Corporation Act's eligibility requirements in HRS §415A-9 and §415A-14.
HRS §415A-3 permits professional corporations to organize "for rendering professional services within one or more professions, subject to licensing laws and rules." However, the statute doesn't define this phrase or clarify whether it authorizes multi-discipline healthcare professional ownership (such as physicians and nurse practitioners co-owning a single entity).
If you're contemplating multi-discipline professional ownership, you should obtain advance written guidance from applicable Hawaii licensing boards before formation, review each profession's individual practice act for ownership restrictions, and consult legal counsel experienced in Hawaii professional corporation law regarding ownership structure compliance.
No strict prohibition exists, but HRS Chapter 415A restricts professional corporation ownership to licensed professionals only through HRS §415A-9, which provides that shares may only be issued to licensed physicians for medical professional corporations. This framework effectively prevents direct hospital or private equity ownership of medical professional corporations. You can structure Management Services Organizations (MSOs) for administrative services, properly structured employment arrangements preserving physician independence, and contractual relationships between hospitals and physician professional corporations—all while maintaining physician control over medical decision-making and complying with ownership requirements under HRS §415A-9.
A lapsed license makes you ineligible for corporate roles under HRS Chapter 415A. The Professional Corporation Act requires shareholders, directors, and officers (except secretary and treasurer) to be qualified persons (licensed in the profession the corporation practices). You should implement monitoring systems to track shareholder and officer licensing status. If you're facing potential license lapse, consult legal counsel regarding interim governance arrangements. Licenses not renewed by the January 31 deadline require restoration filing with late fees ($408.00 for standard physicians, $271.00 for government physicians) before resuming practice or maintaining corporate officer positions.
Your annual report deadline depends on when you formed your entity. Entities formed January through March must file by June 30. Entities formed April through June must file by September 30. Those formed July through September must file by December 31. Entities formed October through December must file by March 31 of the following year.
You can determine your specific deadline by identifying the quarter in which your Articles of Incorporation were filed with DCCA. File online through Hawaii Business Express for $12.50, or submit paper forms for $15.00. Late filing triggers a $10.00 penalty for each year of delinquency, with potential additional penalties up to $100.00 for each 30-day period of continued non-compliance. Two consecutive years of non-filing results in administrative dissolution.
Hawaii doesn't recognize PLLCs for healthcare practice, so your only option is a Professional Corporation under HRS Chapter 415A. This is the only entity type with clear regulatory authorization for physician, dentist, nurse, and pharmacist professional practice in Hawaii. Formation costs are $51.00 standard or $76.00 expedited, and annual compliance requirements mirror those for standard LLCs.
Act 47 provides a General Excise Tax exemption for amounts you receive from Medicare, Medicaid, and TRICARE programs, effective January 1, 2026. This exemption covers direct program payments and patient deductibles, copayments, and coinsurance. You'll need to implement accounting systems capable of separately tracking exempt payments from taxable revenue sources before the exemption becomes effective. Consider coordinating with billing systems, payment processors, and accounting software to ensure proper revenue categorization.
Managing Hawaii's quarterly filing deadlines, tracking 40 hours of biennial CME requirements, and preparing for the January 2026 GET exemption creates real administrative burdens which are especially critical when you're trying to focus on patient care.
Book a demo with Discern today and reduce administrative burden while maintaining compliance.
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