With the recent rush of business owners to incorporate in Texas, many other entrepreneurs are left wondering, “What’s so special about incorporating in the state of Texas?”
If you are an American business owner, incorporating your business in Texas might be your best solution to the rising taxes and high real estate costs of California. Being the home of more than 3.2 million small businesses, Texas is slowly but surely catching up with the big names of Delaware and Nevada as a hotbed for startups. Here, Commenda outlines the key advantages of incorporating in the Lone Star State.
Why are Companies Moving to Texas from Other States?
Many companies are moving to Texas because it offers a better business environment than other states. High taxes, expensive real estate, and strict regulations make it difficult for businesses to grow in places like California and New York. This helps businesses save money, invest in expansion, and attract top talent.
Major corporations like Tesla, Oracle, and Hewlett Packard have relocated to Texas to take advantage of these benefits and Meta is considering relocating to Texas from Delawara. Small businesses and startups form the majority of businesses here, thanks to lower costs and state incentives.
If you’re thinking of incorporating in Texas, Commenda simplifies the process of registering your company, handling tax compliance, and ensuring smooth operations. Whether you want to incorporate an LLC in Texas or set up a larger business, Commenda guides you through every step. Texas is the hotspot for startups now, and Commenda makes it easy to get started with just a call!
Why Incorporate in Texas?
The state of Texas is relentless in its mission to empower companies incorporated in Texas. Governor George Abbott recently addressed, “Ranked as the best state for doing business for 20 years, Texas is number one for the most new jobs, number one for economic development, and number one as the best state to start a new business.” Let’s take a closer look at the rising trends which are making so many entrepreneurs incorporate in Texas.
1. Favorable Tax Climate
Texas stands out for its business-friendly tax policies. Notably, the state imposes no personal income tax, allowing entrepreneurs to retain more of their earnings. Texas does not levy a corporate income tax. It has a franchise tax based on business revenue, which is comparatively low. Many small businesses may qualify for exemptions if their revenue falls below a certain threshold. Also, the cost of living is significantly lower as compared to states like California.
2. Robust Economy and Diverse Industries
Texas boasts a diverse and thriving economy, encompassing sectors like technology, energy, healthcare, aerospace, aviation and defense and manufacturing. Texas is the 8th largest economy in the world among nations, with a GDP of $2.3 trillion in 2023. It grossed more than $440 billion in exports, staying ahead of giants like Canada, Russia and Australia. Innovation has been the number one priority of Texans, with events like South by Southwest celebrating advancements in tech and media. All these add to the advantages of incorporating in Texas.
3. Access to Skilled Workforce
With a labor force exceeding 15 million, Texas provides access to a vast pool of skilled workers. The average Texas youth is much younger than in other states, which proves to be a vital sign of skill development for companies incorporated in Texas. CNBC ranked Texas as the number 1 for workforce in America’s Top States for Business. For business owners like you, the Texas Workforce Commission (TWC) provides qualified candidates and training programs to help upskill the workforce.
4. Business-Friendly Regulations
The regulatory environment in Texas is designed to support business operations for companies incorporated in Texas. The state offers various incentives, such as the Texas Enterprise Fund. The Texas Enterprise Fund (TEF) provides cash grants to companies expanding or relocating to Texas, provided they create high-quality jobs and invest significantly in the state. The fund is performance-based, meaning recipients must meet job creation and capital investment benchmarks. TEF agreements also include clawback provisions, requiring companies to repay funds if they fail to meet their commitments.
5. Texas Invests in Infrastructure
Texas was recently named as the top state for “Best Corporate Infrastructure” by the Site Selection Magazine. The huge area and the primary position in the USA has made it a home to more than 350 airports. Texas also ranked as the number 1 state for the most foreign direct investment, one of the main reasons being its solid infrastructure adding to the advantages of incorporating in Texas.
Every business is different, and has different needs. If you are a business owner planning to incorporate in Texas, Commenda offers a free consultation call offering professional advice for your business. Click here to book a demo now!
Conclusion
Incorporating in Texas is beneficial for any business seeking growth in a region that offers low taxes, mild regulations, and a booming economy. Centrally located, with the right talent and pro-business mechanisms, it is the perfect time to jump in the trend to catch the Texas ride early.
When you’re ready to incorporate in Texas, Commenda will ensure that the process goes smoothly. Commenda helps with expert advice through entity formation, tax compliance, operational setup, and everything in-between, tailored for your specific requirements. Texas is shaping the future of business, let it shape yours with Commenda.
References
https://www.investopedia.com/why-silicon-valley-companies-are-moving-to-texas-5092782
