It is no secret that Texas is the most vibrant place to expand your business. The Lone Star state acquired the top spot as the best place to start a business, according to the Best and Worst States for Business, 2021 report from the Chief Executive. The main reasons were:
- Business-friendly climate
- Affordable office space
- Moderate tax policies
- Friendly state regulations
But, Texas has more to offer than friendly regulations. As they say, “everything is bigger in Texas.” This boastful swagger holds true when it comes to doing business in Texas.
From a staggering gross domestic product of 1.7 trillion US dollars to an economy that’s growing at a frenetic rate of 3.2% to housing one of the largest resident populations in the US (second only to California), Texas is indeed “bigger” for business.
Entrepreneurs who relocate to Texas cite the differences as “day and night.” That said, here are the reasons why Texas is the best place to start a business.
1. Friendly Tax Environment
Texas is well known for its conservative tax policies and streamlined regulations that are ideal for business operations.
Speaking of taxes, Texas doesn’t levy a corporate or personal income tax.
Business owners can keep a large slice of the pie come Tax Day with no corporate or state-level income tax. The state also offers other business-friendly incentives, including franchise tax exemption for many small businesses.
The non-existence of corporate and personal income taxes means:
- It’s less expensive to start and run a business in Texas compared to other states
- You can recruit top talent without having to worry about losing profit
- You don’t have to pay any tax on the money you make through your business
Today, Texas is home to many Fortune 500 companies due to the favorable tax climate. The state collects most of its revenue through sales and franchise taxes to maintain its budget.
2. Low Cost of Living
As one of the largest states in the US, Texas is also affordable.
In fact, you won’t find any major metropolitan area with a low cost of living, like Dallas-Fort Worth. Texas also offers affordable real estate.
In 2015, for instance, the average home price in the US was $305,000, according to the US Census report. That year, the median home price in Texas was $161,000—nearly 50% cheaper than the national average.
The availability of affordable real estate in a tax-friendly environment makes renting an office space in Dallas easy and cost-effective. This means less cost to start a brick-and-mortar store and lower overheads for rent and other utilities for business enthusiasts.
3. Prospering Economy
Texas’s $1.7 trillion economy is one of the largest in the nation, trailing only California.
Inc.com reckons that if Texas were a country, it would be the 10th largest economy in the world. The Lone Star state is home to 102 of the 1,000 largest companies in the US, including 22 Fortune 500 companies.
The transport network in Texas is topnotch with a well-developed interstate highway system and a world-class airport—Dallas Fort Worth international airport, which is recognized as one of the busiest airports in the world.
As far as employment is concerned, Texas has a lower than average employment rate of 3.4%, with 2.7 million small businesses employing over 5 million people. Today, Texas is home to some of the largest and most successful companies in America, including giants like Dell, AT&T, American Airlines, and ExxonMobil.
4. Simplified State Regulations
Texas regulatory structure provides a conducive environment for businesses to run. The legal atmosphere in Texas is unlike any other state.
The lack of red tape gives business owners breathing room, allowing them to focus more on business and less on the legal aspects. State laws are straightforward and easy to comply with, which is also reflected in the painless process of registering a company in Texas.
Because of its friendly regulatory structure, Texas has been ranked the best state for business by the Chief Executive magazine for ten years in a row.
5. Friendly Climate
Unlike many states that are often covered with snow, Texas boasts of a sub-tropical climate and gets little to no snow, even during the deepest winter.
Sure, it can get a little snowy in Austin, but now enough to warrant a shovel.
Entrepreneurs tired of wearing three layers to stay warm can find a safe haven in Texas. Whereas some US cities get over 25 inches of snow per year, Texas barely gets an inch. The friendly climate in Texas promotes good health, which is great for business.
If you’re an entrepreneur looking to expand your business, you might want to consider relocating to Texas. The Lone Star State makes a strong case for being the best place to start a business, thanks to its growing economy, favorable tax climate, growing population, and low-cost living.
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