Quick facts: Minnesota requirements
- Contracting directly with homeowners
- Residential Contractor License, exam + insurance + fee
- Subcontractors/commercial
- Construction Contractor Registration instead
Fees, insurance minimums, and rules change. Verify every item with the responsible agency before you rely on it.
Minnesota splits contractors into two tracks based on who you're actually contracting with, and picking the right one from the start matters.
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What starting a Minnesota contracting business actually involves
Which track you need depends on who signs your contract. A Residential Contractor License is required if you contract directly with an owner of residential real estate - one to four units - in multiple specialty areas or roofing work. If instead you're a subcontractor who doesn't contract directly with homeowners, or you work commercial jobs, you register through the separate Construction Contractor Registration Program instead.
The license track requires a real exam. The qualifying person on a Residential Contractor License application has to pass a written exam administered by the Department of Labor and Industry.
Insurance minimums are fixed, and cover both liability and property damage. You need liability insurance of at least $100,000 per occurrence, $300,000 aggregate, and $25,000 in property damage coverage, plus documented workers' compensation compliance on a DLI-approved form.
Fees scale with your business size, not just a flat rate. The base license fee is $180. On top of that, you pay into the Contractor Recovery Fund at a rate tied to your gross annual receipts: $320 if you're under $1 million, $420 between $1-5 million, and $520 if you're over $5 million.
Where people get stuck
The mistake is registering through the wrong track because "contractor" sounds like one category. If you sign contracts directly with homeowners, the license (with its exam requirement) is what you need - registering as a subcontractor when you're actually contracting with the property owner leaves you out of compliance even though you filed something.
Not sure if you need the Residential Contractor License or Construction Contractor Registration? Contractor Lane sorts it out with you.
Where Contractor Lane comes in
Contractor Lane helps you confirm which track fits how you actually contract, and gets your exam prep, insurance, and Recovery Fund fee sized correctly before you apply.
Build your free roadmap to get the sequence for your specific trade and target project size.
General educational information for people starting a business in Minnesota. Requirements and fees change. Contractor Lane is not a law firm or tax advisor.
Common questions
What does it take to get a Minnesota Residential Contractor License?
The qualifying person must pass a written exam administered by the Department of Labor and Industry. You need liability insurance of at least $100,000 per occurrence, $300,000 aggregate, and $25,000 in property damage coverage, plus documented workers' compensation compliance. The base license fee is $180, plus a Contractor Recovery Fund fee that scales with gross annual receipts: $320 under $1 million, $420 between $1-5 million, and $520 over $5 million. Source: Minnesota DLI, Residential Contractor Licensing.
When do I need a Residential Contractor License versus Construction Contractor Registration in Minnesota?
A Residential Contractor License is required if you contract directly with an owner of residential real estate of one to four units, in multiple specialty areas or roofing. Construction Contractor Registration applies instead to subcontractors who don't contract directly with homeowners, and to commercial contractors. Source: Minnesota DLI, Residential Contractor Licensing.