Due to the intrinsically dangerous nature of the industry, private detectives and private investigators are heavily regulated by both state and local licensing authorities. The most basic agency license application may require a fee, fingerprints, proof of experience, a credit report, a surety bond, and/or a certificate of insurance.
Many states with statewide private investigation regulations allow local jurisdictions to adopt their own regulations, which are often more stringent. When such agencies are not regulated at the state level, they are almost always regulated, just as heavily, at the local level. Furthermore, any employees that will be providing investigative services (private detectives) are likely to have individual licensing requirements to which they must adhere.
Businesses functioning without the proper license are generally penalized based on the size of the operation and the gravity of the offense.