Is a Virtual Address Legal? What Every Business Owner Needs to Know

Have you just discovered what virtual addresses are and are interested in using one for your business? It can be a great business move, especially if you’re just starting out or have a small business. 

But, is a virtual address legal? 

We discuss that—and whether a virtual address is right for your business—in this article. 

Is a Virtual Address Legal?

Yes, virtual business addresses are legal to use for your business—though this answer could change depending on what country you’re in. This is because, despite its name, a virtual address is a physical and secure place to receive mail. 

That’s important to the IRS. There’s a lot of sensitive information in business documents, and having a secure place ensures that information is safe. You just need to make sure ownership has transferred from the virtual address provider to you, so that when you fill out tax forms, everything will be legitimate. 

Can You Use a Virtual Address for an LLC?

Yes, you can use a virtual address for an LLC. In fact, it’s a great alternative to using a PO box or your home address. While a PO box can be used to receive mail for an LLC, you are not allowed to use it as the address for your business license and using your home address carries its own problems (such as privacy and zoning restrictions). 

Can You Use a Virtual Address for an EIN?

Yes, a virtual address can also be used for an employer identification number (EIN). As mentioned before, a virtual address is a physical location that can receive and forward mail securely—which is crucial for EIN paperwork. 

The Difference Between a Virtual Address and a Physical Address

Now that we’ve discussed whether a virtual address is legal or not, it’s time to discuss the differences between using one and using a physical address. 

Security

A virtual address offers more security than a physical address. 

Often, entrepreneurs who are looking for a virtual address do not have a physical space to call their own—and most likely work from home. This can cause security concerns. 

Not only will your home address now be public, but anyone can find you at home at any time. You can also no longer guarantee that any documents sent to you will be secure, unless you’re somehow watching your mailbox 24/7.

Legitimacy

If we follow the same idea that a person looking into a virtual address doesn’t have a workspace of their own—then a virtual address will add more legitimacy to their business. When future partners or customers look up your business and see a home address, they may hesitate to work with you. 

Compare that to having an address in a busy city area where well-known businesses operate. Being neighbors (even virtually) with such businesses adds legitimacy to a business before customers or partners do business with you. 

Cost

Using your home address as your business address will save you money, as virtual addresses are typically rented monthly. However, selecting the right virtual address provider brings additional amenities that make it worth the money. 

If you already have a place to work, getting a virtual address can save you money. You’ll only have to pay rent with a virtual address instead of rent, utilities, and other associated costs with running an office. 

Flexibility

A virtual address offers more flexibility than a physical address because you can work from anywhere without losing legitimacy. You can also market to different target markets, given you aren’t limited to just where you work. 

Additional Advantages of a Virtual Address for Your Business

How else can a virtual address improve your business? 

Amenities

If you choose the right virtual address provider, you can get additional benefits with little to no extra costs.

This can help make the day-to-day operations of your business smoother. Plus, having a lobby directory listing and greeter adds another layer of legitimacy to your business.

Separate Home from Work

Having a virtual address helps make it easier to separate work from home, especially if you work from home. This is because business-related mail will be addressed to your virtual office instead of your home. This makes organizing mail easier, and it’s less likely that business mail will get mixed in with home mail.

Create a Professional Image

Similar to legitimacy, a professional image will come from having a virtual address on your website, business cards, etc. Having the same address across all media and promotional materials will create a professional image—even when someone doesn’t know much about your business. 

How to Set up a Virtual Address for Your Business

Setting up a virtual address is easy with Davinci. With thousands of addresses, you can find the area that suits your field of business. 

Once you’ve selected your address, all you have to do is add the additional features you want. Then, within a business hour, a representative will reach out to you and help you complete the process. Your new virtual address will be ready to use within two business days.

Contact Davinci to start the process today.