PayPal Business Account: How to Open One

A PayPal Business account lets you accept payments under a business name. This guide covers what PayPal says about opening one, who needs one, and what it costs, using PayPal’s own pages as read on 2026-10-16. PayPal can change its requirements and fees, so confirm on its site before you sign up. This is general information, not legal or tax advice.

Personal or Business: which one?

PayPal says all its accounts let you send and receive payments, and describes the difference this way:

• Personal is recommended for individuals who shop and pay online, who send or receive personal payments such as shared expenses, or who are casual sellers or non-businesses getting paid online.
• Business is recommended for merchants who operate under a company or group name. PayPal says a Business account offers additional features, including limited access for up to 200 employees and a customer service email alias so customer issues can be routed for faster follow-up.

PayPal also says you can upgrade an existing Personal account to a Business account, usually from your account settings, and that you keep your existing account history.

What you need to open one

PayPal lists these items for opening a Business account online:

1. Your full legal name.
2. An email address and a password.
3. Your tax ID or Social Security number.
4. A business description.
5. Your business bank account details.

PayPal says the sign-up takes a couple of minutes and that a new business can apply. After you open the account, PayPal suggests you link and confirm your business bank account or a card, and confirm the email address you used to sign up. Then you can start using tools such as invoices or online payments on your website.

Do you need an LLC?

PayPal says no. You do not need an LLC or other formal business entity, and the account is designed for a wide range of business types, including sole proprietorships. A sole proprietor can use their own name as the business name and give a Social Security number instead of an EIN.

An LLC is a separate decision about liability and taxes. If you are weighing it, see how to start an LLC, which also covers getting an EIN from the IRS for free.

What it costs

PayPal says there is no fee to open a Business account and no monthly maintenance fees. You typically pay a fee only when you receive a payment for goods or services, and the rate varies by transaction.

On PayPal’s US business fees page (last updated October 1, 2026 when we read it), the standard rate for receiving domestic commercial payments is 3.49% plus a fixed fee for PayPal Checkout and Guest Checkout, and 2.99% plus a fixed fee for standard credit and debit card payments. For US dollar payments the fixed fee we read was $0.49. Other payment types, international payments and invoices have their own rates. Use our PayPal fee calculator to see the fee on a payment you receive, or the amount you would need to charge to receive an exact amount.

Using the account for invoices and your store

PayPal says you can issue online invoices that customers can pay with their preferred payment method, even if they do not have a PayPal account, and that you can connect your online store, accounting, inventory and marketing tools. To draft an invoice before you send it, try our invoice generator. If you are choosing between PayPal and another processor, compare them on Stripe vs PayPal.

What we did not verify

PayPal’s help pages also cover account limits, holds and reserves. We did not read the terms that govern those, so this guide says nothing about them. Read PayPal’s user agreement before you rely on any account for most of your income.