An Arkansas contractor taking work in Alabama deals with the same four questions everywhere: who licenses the trade, when a licence is actually required, when workers compensation kicks in, and where the business registers. Below is Alabama's answer to each, with the agency's own link.
Licensing
Alabama Licensing Board for General Contractors
General contractor license required when project cost is $50,000 or more (swimming pools over $5,000, per Ala. Code 34-8-1). Residential construction or remodeling exceeding $10,000 requires a separate Home Builders Licensure Board license (hblb.alabama.gov).
Workers compensation
Alabama Department of Labor, Workers' Compensation Division
Businesses with five or more employees must carry coverage; the employee count includes full- and part-time workers, corporate officers, and LLC members.
Business registration
Alabama Secretary of State, Business Entities Division
Tax registration
Alabama Department of Revenue
https://www.revenue.alabama.gov/entity-registration/register-a-business/
New hire reporting
Most states require newly hired employees to be reported within a short window of their start date.
Starting or running the business itself is covered in the contractor business guide. Arkansas licence records for Benton and Washington counties are in the contractor directory.