Becoming a general contractor in Texas is different from many other states. In fact, Texas doesn’t require a state-level general contractor license in most circumstances. But that doesn’t mean you’re free of permits, registrations, or local rules. 

Before you break ground, here’s everything you need to know about becoming a Texas contractor.

Do You Need a General Contractor License in Texas?

One of the biggest surprises to those interested in becoming a contractor in Texas: Texas does not require a state license for general contractors, builders, or home improvement contractors.

However, there are several important caveats apply:

• If you perform specialized trades—like plumbing, electrical, or HVAC—you’ll often need a state-issued license.
• Many cities and municipalities in Texas impose their own licensing, registration, or permitting requirements even if the state doesn’t.
• If you offer trade services without subcontracting (e.g., you both general contract and do your own electrical work), you might still need the relevant trade license.
  

So, even though there’s no blanket state license for general contractors, you’ll want to dig into local laws of the cities/counties where you operate.

1. Set Up Your Business Entity

Since Texas doesn’t require a state-issued general contractor license, your first step is often business formation:

• Choose a legal structure (LLC, S-Corp, sole proprietor, etc.)
• Register with the Texas Secretary of State if needed (for LLC or corp)
• Get your Employer Identification Number (EIN) from the IRS
• Set up proper accounting and bank accounts
  

This helps with liability protection, formalizing business operations, and building trust with clients.

Sole Proprietor vs. LLC Vs. S-Corp As A Contractor

When you’re starting out as a general contractor in Texas, one of the first decisions you’ll face is how to structure your business. Each option—sole proprietorship, LLC, or S-Corp—comes with trade-offs in liability, taxes, and paperwork.

Sole Proprietor

• What it is: The simplest structure—just you operating under your own name or a DBA (“doing business as”).
• Pros: Easy to set up, minimal paperwork, no separate business taxes (income is reported on your personal return).
• Cons: No liability protection. If something goes wrong on a job, your personal assets could be at risk.
• What contractors say: Many start here to “test the waters,” but quickly move to an LLC once they land bigger projects or start hiring crews.

LLC (Limited Liability Company)

• What it is: A flexible structure that separates your personal assets from your business liabilities.
• Pros: Liability protection, relatively simple setup, and flexible taxation (you can choose to be taxed as a sole proprietor, partnership, or S-Corp).
• Cons: Slightly more paperwork than a sole proprietorship; annual state filing fees apply.
• What contractors say: Often the “sweet spot” for small to mid-size contractors—provides protection without a lot of corporate red tape.

S-Corp (S Corporation)

• What it is: A tax election (not a separate business type) that allows your LLC or corporation to be taxed differently.
• Pros: Can help save on self-employment taxes once your income grows; allows you to pay yourself a reasonable salary plus distributions.
• Cons: Requires more formalities (like running payroll), and isn’t always worth it for contractors just starting out.
• What contractors say: Many mention switching to an S-Corp once revenue is steady, because the tax savings outweigh the administrative hassle.

2. Confirm Local Licensing & Registration Rules

Because Texas general contractor oversight is decentralized, you must research licensing requirements in each city or county where you plan to operate.

Examples of TX city-level rules:

• Austin: Contractors may need to register with the city’s Building & Trade Contractor Services before pulling permits.
• Dallas: General contractors often register via the city’s Housing & Community Development office and show proof of insurance.
• Houston: All trades and subcontractors have to register with the city by completing paperwork with the Houston Permitting Center.
• San Antonio: Requires registration for residential building contractors or home-improvement work; commercial work often has more relaxed requirements.
  

Before taking on work in a new jurisdiction, check with that city or county’s permitting office.

3. Get Licensed (If Special Trades Are Involved)

If your general contracting includes doing the trade work yourself (or supervising it closely), you may need trade-specific licensing:

• Electrical: Licensed through the Texas Department of Licensing and Regulation (TDLR)
• HVAC / Air Conditioning & Refrigeration: Regulated by the TDLR ACR Program
• Plumbing: Governed by the Texas State Board of Plumbing Examiners
  

These programs typically require proof of experience, exam passage, liability insurance, and sometimes surety bonds.

4. Secure Insurance, Bonds & Permits

Even if a local license isn’t required, in many jurisdictions clients or municipalities will expect:

• General liability insurance
• Workers’ compensation insurance (if you hire employees)
• Surety bonds or contractor license bonds (often $5,000–$25,000 depending on the city)
• Proper building permits and inspections for each project

If you fail to meet these requirements, you could be subject to fines, project delays, or being barred from pulling permits.

5. Build Experience, Reputation & Networks

Because there’s no state-level license for general contractors in most cases, your credibility will rely heavily on your experience, references, and portfolio. Many contractors in Texas begin by subcontracting or working under established general contractors to gain experience. Over time, they build trust, bid for projects, and deliver results.

FAQs About Becoming a General Contractor in Texas

Do you need a license to be a general contractor in Texas?

Not at the state level. Texas does not require a statewide general contractor license. However, many cities and counties require registration or local permits, and you’ll need state-issued licenses for specialty trades like plumbing, electrical, and HVAC.

Which Texas cities require contractor registration?

Cities like Austin, Dallas, Houston, and San Antonio often require general contractors to register, show proof of insurance, and sometimes provide surety bonds. Always check with the local building department before starting work.

How much does it cost to become a general contractor in Texas?

Since there’s no statewide license, costs vary. Expect to pay business formation fees (around $300 for an LLC), local registration fees (often $100–$500), and potentially a contractor bond ($5,000–$25,000 depending on location).

Do I need a degree to be a contractor in Texas?

No, you don’t need a formal degree to be a general contractor in Texas. However, degrees or certifications in construction management, business, or engineering can improve credibility and help win larger contracts.

What’s the difference between a general contractor and a subcontractor in Texas?

A general contractor oversees the entire project, hires and manages subcontractors, and ensures compliance with permits and codes. A subcontractor performs specific tasks (like roofing or electrical work) under the direction of a general contractor.

Helpful Resources

If you’re considering becoming a contractor in Texas, start with these authoritative resources:

• Texas Secretary of State – Business Filings
• Texas Department of Licensing and Regulation (TDLR) – oversees electrical, HVAC, and other trade licenses
• Texas State Board of Plumbing Examiners
• U.S. Small Business Administration (SBA) Texas Resources – guidance on business setup and financing
• IRS – Apply for an EIN

Become a Texas Contractor With Confidence

Becoming a general contractor in Texas is less about passing a statewide test and more about navigating local requirements, securing the right insurance and bonds, and building a strong reputation.
At ZTERS, we’re proud to be a Houston-based, family-owned company. We support contractors across Texas with dumpster rentals, portable restrooms, temporary fencing, storage containers, and more. We can bundle everything you need to keep your jobsite running smoothly while you focus on growing your business.