Wall Street Journal recently reported that Mark Zuckerberg is considering relocating Meta’s incorporation out of Delaware. Meta officials also added that they are in talks with Texas officials as the new state of reincorporation. This follows Elon Musk’s decision to relocate SpaceX from Delaware to Texas, urging others to relocate business to Texas.
Termed as the “Best State for Business” by the Chief Executive Magazine for 20 years in a row, more entrepreneurs are choosing to relocate business to Texas. Nation’s top CEOs are impressed by the pro-growth economic policies, no corporate income tax and personal income tax, and the highly skilled workforce of Texas.
If you want to relocate business to Texas, you must understand the state’s economic climate, legal framework, and how Texas supports businesses. In this blog, Commenda takes a dive into the business relocation to Texas.
Why Are Businesses Relocating to Texas?
Why are so many companies moving to Texas? Governor Greg Abbott recently congratulated Texans, “As the eighth largest economy in the world, Texas will continue to slash government regulations that holds our businesses back from thriving in 2025,” said Governor Abbott.
1. A Business-Friendly Economic Climate
Texas is home to 52 of the Fortune 500 companies, right after California (57). The pro-business environment, lower taxes, and more favourable legal and regulatory environment make it an attractive decision to relocate business to Texas.
From 2020 to 2021, about 33% more people moved to Texas than any other state. The Texas Enterprise Fund is one of USA’s largest programs to make businesses relocate to Texas.
2. No State Income Tax and Favorable Business Taxes
The main reason why business owners consider relocating business to Texas is its tax structure. Texas does not have a state income tax for individuals or corporations. Businesses pay a franchise tax, which is based on revenue. This is lower than corporate taxes in other states. According to the Federal Reserve Bank of Dallas, 60% of businesses relocated in Texas move to Dallas and Houston.
3. Lower Operating Costs
Compared to states like California and New York, Texas offers huge savings for businesses. Office and warehouse spaces are affordable. The lower cost of living also benefits employees to live a better lifestyle.
In 2002, Texas deregulated the energy market. Businesses have the option to choose their electricity provider, resulting in lower energy costs. All these facts make it extremely beneficial for business owners to relocate to Texas.
4. Strong Workforce and Infrastructure
Texas has a young and skilled workforce, with top universities producing graduates in technology, finance, and engineering. The state also boasts an excellent transportation network, including major highways, railways, and international airports, making it easier for businesses relocating to Texas.
5. Lower Unemployed Rates
Between 2010 and 2019, Texas gained a net total of 216,000 jobs per year as reported by The Texan Tribune. The urban areas of Texas have attracted 53% of the relocation businesses, and businesses with fewer than 500 workers dominated the jobs migrating to Texas. The state has lower unemployment rates, especially in the metropolitan areas of Dallas, Austin and Houston.
Moving Your Business to Texas
Relocating a business to Texas is more than just a physical move. It requires a legal process called conversion. This allows a company to transfer its state of registration to Texas without having to dissolve and restart.
The process begins by filing a Certificate of Conversion with the current state, followed by preparing a Plan of Conversion that outlines key business details. Once these steps are complete, the business must register with the Texas Secretary of State by submitting a Certificate of Formation. If your business is in California, where certain conversions are restricted, you must go for a migratory merger. Commenda makes it easy for you to relocate your business to Texas the right way. Book a demo now!
What are the Texas Business Incentive Programs?
If you are planning to relocate your business to Texas, you should know about incentives like the Texas Enterprise Fund (TEF), one of the largest deal-closing funds in the U.S. The TEF grants cash to companies choosing Texas over other states. Other programs include Chapter 403 tax abatements, the Texas Enterprise Zone Program (EZP) for businesses in distressed areas, and R&D tax credits. You can get a summary of all Texas Incentive Programs here.
Texas Business Licenses and Permits
Unlike many states, relocating your business to Texas does not require a general business license. The Texas Business Licenses & Permits Guide (2024-2025) provides a comprehensive list, while the Texas Economic Development and Tourism’s Business Permit Office (BPO) offers guidance. Businesses must register with the Texas Comptroller of Public Accounts (CPA) for state filings and consult local tax offices for property and business tax obligations.
Always seek the help of an expert to keep yourself compliant 100% at all times. Lack of compliance may lead to heavy penalties and slow down your business relocation to Texas. Book a call with Commenda and get compliant with Texas laws!
Relocating Business to Texas Made Easy with Commenda
Texas continues to attract businesses for good reason – it offers lower taxes, reduced costs, and an environment full of business incentives. However, Commenda understands that every business has unique needs. Get in a one on one call with our Texas reincorporation experts to make sure your business relocation to Texas is done the correct way.
References –
https://capitol.texas.gov/BillLookup/BillSummary.aspx?LegSess=88R&Bill=HB5
https://www.dallasfed.org/research/swe/2024/swe2402
https://gov.texas.gov/uploads/files/business/Texas_Licenses_Permits_Guide.pdf
