Best States for Starting a Business & Office Relocation in USA
You’ve come to the realisation that the USA is the right move for your business. Well... It is the land of opportunity, so it makes sense.
That’s why we’ve compiled the best states for starting a business in the US, to simplify your relocation research. BONUS: We’ve added a video on this very topic from our '‘Scale Up Stateside’ podcast, packed with insider knowledge on states we’ve seen traction based on where our clients hire employees in. Saving you time to start thinking about the ‘important office things’ like interiors, bean bags or pool tables, how far away is the best coffee shops, what's the view like?
From coastal sunshine filled areas to breathtaking skyline views, and those upcoming southern charm states filled with country music, you could say you’re spoilt for choice. Whether it’s the west coast bordered by the Pacific or the hustle and bustle of New York city, deciding the best states for starting a business or your office relocation in the USA should be pretty easy, but only if you keep reading...
Considerations Before Researching the Best States for Starting a Business
Before you narrow down your list on the best states for starting a business in the US, make sure you keep these items in mind when completing research.
1. Proximity to talent within your business sector
When choosing the right state for office relocation in the US, you obviously will need to make sure you have access to the right talent for your business. For example, if you’re a tech company, it makes sense to take advantage of one of the largest tech hubs in the world - Silicon Valley. Or why not consider up and coming US tech cities, from sunny Tampa in Florida, North Carolina, and Tennessee, there are hidden gems that are booming with quality talent, for the fraction of the price.
Pulling in ambitious graduates determined to succeed is a good way to build out your staff when starting a business in the US. Take California for example, one of the top contributors for fresh graduate talent. With over 2.1 million students in the California Community Colleges, which also has the largest higher education system in the US.
Don’t forget areas like Boston, containing the best universities in the world, and a more walkable city for you and your employees versus other larger states. Of course, New York has some of the brightest talent in the world thanks to it being a world leader in areas like finance and fashion. You’ll never be stuck for choice when hiring in the US, and remote work opens even more possibilities.
2. Nearby amenities
When thinking about the best states for starting a business or areas for office relocation, you may think minor details such as parking and accessibility should be put at the back of your mind. These factors can be a decision maker when hiring US employees. Afterall, if you plan to have employees in the office, prioritising their wellbeing helps retention rates and work quality.
Research the office locations nearest coffee shops, or distance to public transport, shops, delis, and attractions. If you invite clients to your office, you don’t want them struggling to find to find it if it’s in an isolated spot, or have them driving in circles for a parking space if it is not commutable via public transport.
3. Value for cost of relocating your office in the US
When you decide which state is the right place for your office relocation, it’s important to factor in the value of the offer on the particular location you have in mind. Is the location within your budget? Does the cheaper location offer value? For example, if you choose an office location in a rural area with very little access to main transport or highways, this could make securing the right talent a very difficult job.
Or have you considered using coworking spaces within the state you are starting a business in? Dependent on your budget and if you have a hybrid work policy in place, these could offer a better and more cost effective alternative versus signing a lease to rent office space.
4. The potential for growth and scalability
As you fulfill what was once a future ambition...starting a business in the US, don’t forget to keep planning ahead. Have a strategy in place as you start your new venture in office relocation in the states. Ask yourself and your team will this location, area and decision fuel the future growth of your company?
Does it provide a good base for even bigger ambitions of scalability you have for the future? Can I access the right talent to grow my business here? Can I easily network with potential clients and industry events in this area? Make sure to ask yourself and your team these questions as you narrow down the best states for starting a business in the US.
PGC’s Best States for Starting a Business and Office Relocation are..
Now that we’ve covered the items you should consider when completing research on the best states to start a business and office relocation, let’s jump right in to the areas you could consider.
West Coast States & Cities
Known for its laid-back attitude, you’ll be hard-pressed to find the hustle and bustle of NYC in any of the West coast’s cities. But don’t be fooled by the calmer aura, some of these West Coast areas are considered the best locations for starting a business in the US and office relocation.
San Francisco
One of the most popular cities in the US, San Francisco is like no other when it comes to sunshine, tech talent, and attractions. The perfect mixture of Californian luxury and cutting-edge tech advancements, makie it a popular city for STEM graduates.
San Francisco is probably the closest city in terms of pace/vibe to New York City, and stands on its own as a world-class place to do business. It’s less than an hour from Silicon Valley and has some of the best arts and culture venues in the country.
Companies in San Francisco: Apple, Google, Uber Technologies, Wells Fargo, and Visa, are some of the many big companies in San Francisco.
Considerations when starting a business San Francisco
Stabilizing Office Rent
Due to the increase in hybrid and remote working, demand for office space in San Francisco has slightly declined, good news if you’re looking to be part of the rise after the fall. The average asking rental rate has been reduced from $74.59 psf to $74.35 psf in San Francisco. For the rest of 2023, it is predicted to have a continued downward pressure on average asking and effective rental rates as landlords aggressively compete for occupancy amidst sluggish demand.
However, office costs in San Francisco are typically higher than up and coming states located in the centre or south of US.
Cost of living in San Francisco
San Francisco's housing expenses are 207% higher than the national average and the utility prices are 32% higher than the national average. Transportation expenses like bus fares and gas prices are 38% higher than the national average. You should really analyse whether these high costs are within your office relocation budget, as there are lots of up and coming states that don’t even charge income tax, with relatively lower costs of living that will provide you with more disposable income.
San Francisco has the Most Startups Per Capita
California is widely considered as one of the best states to start a business due to the San Francisco Bay Area being one of the top US cities with the most startups per capita . Bursting with ambitious start-ups and the potential to expect office availability to continue to increase in 2023 – Could San Francisco be the destination for your US office relocation?
Los Angeles
Bright lights, big city - Welcome to Los Angeles.
Home to world class colleges and universities, Los Angeles could be you or your employees future home. The climate in LA is considered more manageable than anywhere else in the US, so living here is easy.
Los Angeles county also has a variety of incentive programs available to micro enterprises and small and large businesses.
Companies are gliding out of the shadows of the huge entertainment conglomerates which has resulted in LA being the ideal place to launch new creative ventures, filled with creative talent determined to make it within these industries. Illustrative of this trend is the success of companies in LA such as The Walt Disney Company, Paramount Pictures, and Forever 21 all of which call sunny LA their home.
Companies in Los Angeles: LA is huge hub for entertainment, fashion, marketing, and Aerospace & Defence companies. Mercury General Corp, Warner Bros and Mattel are an example of the large companies based in LA.
Considerations when starting a business in LA
How much is office space in LA?
It can be expensive to rent office space in LA. According to squarefoot data, the average office rent price in Downtown LA is $42 per square foot.. The table below provides more detail on the costs you could be shedding for LA office space based on where your office relocation is and the class you choose.
Is it expensive to live in LA?
According to Payscale data, the cost of living in Los Angeles is a staggering 51% higher than the US national average, with housing towering above the average at 140%. The median home price in LA is $1,083,995 and median rent is $3,296. So, it’s fair to say the cost of living in LA should be factored into your budget if you’re considering opening an office in LA.
Pros of starting a business in LA
The weather is incredible.
There are tons of unique neighborhoods to explore.
There is always something to do.
Full of creative minds for talent and networking if you operate within creative industries like marketing, entertainment, and graphic design.
Cons of starting a business in LA
Expensive cost of living
Companies are moving out of California in record numbers to more business friendly states. The culture has changed and unleashed a corporate exodus that appears to have no end in sight.
High income tax rates
You can read more about the pros and cons of doing business in California in our best states for business blog based on PGC internal data from where our international clients are choosing to relocate to and hire workers within.
Seattle
Seattle is the largest city in the Pacific Northwest and is home to giant companies like Amazon, Boeing, and retail giant, Nordstrom. Washington is a big contender as one of the best states to open a business on the West Coast, and where better than Seattle, the largest city in the state.
Companies in Seattle: Seattle is considered one of the best cities in America for tech jobs. Amazon, Google, Starbucks, Accenture, Adobe, Nintendo, and Microsoft are few of the many big names in this popular West Coast city.
Seattle supports diverse sectors such as healthcare, retail, creative services, and tech start-ups. This adaptability helps each business get the most value out of their lease.
Considerations for starting a business in Seattle
What is the lifestyle like in Seattle?
Seattle is a great place to live for tech professionals and those seeking abundant career opportunities, thanks to its thriving tech industry.
Seattle’s ‘Emerald City’ nickname is related to the nature and forest greenery that surrounds the city on all sides. Nature enthusiasts will love the proximity to parks and outdoor activities, while coffee aficionados can indulge in the city’s renowned coffee culture.
Pros of starting a business in Seattle
No state income tax in Washington – A huge pro of opening an office in Seattle of choosing is for your office location is that the state does not charge personal or corporate income tax. However, if you engage in business in Washington you will be subject to business and occupation (B&O) and/or public utility tax.
Startup business culture – Seattle has a history of success stories from the businesses that started up there; think Microsoft, Starbucks and Amazon. It has a gained a reputation as a start-up community, with support programs to encourage business growth.
Access STEM professionals in Seattle - According to the Washington State Department of Commerce, the tech sector accounts for more than 20% of the Washingtons's total economy. CompTIA backs this up, ranking Washington second for the percentage of the workforce in tech, contributing to over $121 billion in revenue.
A city surrounded by nature
Cons of starting a business in Seattle
‘The Seattle Freeze’ - The phenomenon named ‘The Seattle freeze’ refers to the perception of it being difficult to form friendships in Seattle and standoffish culture.
Rainy winters – Seattle has a rainy reputation, having an average of 156 rain days a year, higher than other major US cities.
On the residential side of the coin, Seattle has felt its share of growing pains due to limited housing options.
East Coast States & Cities
New York City
“The City” of NYC is composed of five boroughs: Manhattan, Brooklyn, the Bronx, Staten Island, and Queens. Financial companies are still making their home base in FiDi (the Financial District) of Manhattan, but there’s been a strong trend for creative agencies and start-ups to open offices in Brooklyn, as opposed to Manhattan.
Companies in New York: There are too many companies to mention located in New York. New York is often chosen as one of the best states to open a business for companies relocating from the UK/Europe.
If you start a business in New York, you’re sure to receive plenty of support within the expat community, but be sure to consider cost-of-living, city taxes, and market saturation before opening shop.
Considerations when starting a business in New York City
Cost of living in New York
A single person’s estimated monthly costs living in New York is £1,223.5 ($1,537.4) without rent, 17% more expensive than Los Angeles.
Renting office space in NY
According to Storefront, the minimum office space rent in New York starts from as low as $40 per square foot per year in Boroughs to a maximum of $1000 in places like Park or Madison in Manhattan. The high-end retail space to rent in New York is located on Park Avenue and Madison Avenue.
Pros a of starting a business in New York
To start, there’s the New York-style pizza and bustling streets with countless food and entertainment choices, what more could you dream of?
Diversity – You'll find someone from every part of the world in NYC, providing a large and educated talent pool to choose from to build out your US business.
Towering skyscrapers, famous districts, and endless energy.
The most connected city in the US - Easily travel within the city, to other states, or internationally for business meetings.
Cons of starting a business inNew York
Limited Space: NYC is a densely populated city, which means that space is at a premium. This can make it difficult to find a space and it can drive up the costs of renting or leasing space.
High Costs: Rent, salaries, and other expenses are all significantly higher in NYC than in many other parts of the country.
New York always makes it into the top 3 of PGC’s annual best states to open a business in due to the number of our international clients that expand to the state. That’s why we wrote a separate piece on the pros and cons of doing business in New York.
Boston
Boston’s proximity to world-class universities such as Harvard University and MIT (Massachusetts Institute of Technology) has positioned it to become a lush valley of opportunity for financial and venture capital companies as well as technology firms.
Boston is also less than four hours away from NYC, so it can be the perfect location for starting a buisness in the US or for office relocation to a quieter state.
Companies in Boston: Boston is extremely popular for businesses operating within financial services, Technology, and Health Care. State Street, General Electric, Liberty Mutual Insurance, New Balance, Gillette, Dunkin and Vertex Pharmaceuticals, are some of the recognizable names headquartered in Boston.
Pros of starting a business in Boston
Experience all seasons – Boston has a beautiful spring, summer, and fall, along with snowfall in winter.
Boston is a famed for its walkability and reliable public transport.
Extensive history to explore
World leading universities to access highly educated talent
Cons of starting a business in Boston
High cost of living - A single person’s estimated monthly costs in Boston are £1,093.2 (1,373.6$) without rent.
Driving and parking can be difficult in Boston
Places closes early in Boston versus larger cities like NYC.
Here are more reasons why Massachusetts is considered one of the best states for starting a business.
Washington, D.C.
The ‘Capital City’ is surrounded by historic parks, museums, and one of the most diverse populations within the United States. Washington D.C. enjoys relatively mild weather and a congenial feel, common to the Mid-Atlantic States of Maryland and Virginia.
The primary industry in D.C. remains government/political-related, but the bevy of top-notch universities makes D.C. one of the best states for starting a business in the US or for office relocation.
Companies in Washington D.C.: Home to international trade and embassies. It is is also one of the best states for starting a business if you work within finance. Capital One, FTI Consulting, and General Dynamics are some of the big financial companies with HQs in D.C. Notable US government operations are also based in the state, including the Internal Revenue Service, US Department of Defense, and the Department of Homeland Security.
Pros of starting a business in Washington D.C.
Strong industrial and manufacturing hub
Wide variety of tax incentive programs
Good regulatory environment for businesses
Located close to other influential East Cost cities, making it ideal for entrepreneurs.
Cons of starting a business in Washington D.C.
High cost of living – If you or your employees choose to rent in Washington D.C., it can significantly impact their salary. Living in the suburbs is certainly an option, as your rent will be substantially lower here.
Middle and South States & Cities
There’s a lot happening on the US coasts, that are often favoured to have the best states for business due to easy access to international travel and beautiful views. However, since the COVID-19 pandemic, old manufacturing stomping grounds and central Texas cities have been clear standouts for business opportunities and many businesses have completed office relocations to states with favourable income taxes and lower costs of living.
Houston
The home of Energy, oil, and gas giants Conoco Phillips, BP, and Exxon use Houston as their US headquarters. But Houston’s opportunities aren’t limited to natural resources. Texas has supercharged it’s way into the list of the best states for starting a business from not charing individual income tax or corporate tax (however it does levy a gross receipts tax).
If you start a business in Houston, you will likely have more disposable income due to the lower costs. You may be surprised that Houston is the fourth largest city in US, so you’re not missing out on the big city hustle and bustle if based here, but can access more nature.
Companies in Houston: Companies like the above that work within advanced Manufacturing, Energy, Aviation, and Biotechnology, have chose Houston as their US office location.
Pros of starting a business in Houston
Well positioned for international business - The region's geographic location makes it easy to move both goods and people around the world efficiently, thanks to the port of Houston and airport links.
No personal income tax charged
Houston ranks number 3 among US metro areas in Fortune 500 headquarters
Highly educated workforce - Over 1.5 million Houston residents over 25 have a bachelor degree.
Cons of starting a business in Houston
The heat and humidity may become hard to handle
Underdeveloped public transportation system versus major cities
Tropical storms
Beware of sales tax in Texas - Yes you don’t have to pay state income tax, but you do have to pay a high sales tax on most purchases.
Austin
In recent years Texas, Austin quickly became a new home for NYC refugees looking for fresh air and a little more living space. It’s not surprising that major companies like Whole Foods, Visa, and the potentially the next home for controversial ‘X’ previously known as Twitter, making it a key contender for starting a business and office relocation in the US.
Remember, everything is bigger in Texas, including the talent, food portions, and culture. Austin is no exception to this Texas stereotype, and is quickly becoming one of the best cities for starting a business.
Companies in Austin: Major companies headquartered in Austin include Dell, eBay, Tesla, Oracle, and General Motors. Key industries in Austin include Clean Energy, Advanced Manufacturing, Creative / Digital Media, and Biosciences.
At PGC, not only did we move our HQ to Austin, but have witnessed many international clients choose it as the destination of choice for their US expansion. That’s why we interviewed experts at Cushman & Wakefield, to learn why Austin is one of the best states for starting a business or office relocation.
Pittsburgh
The Steel City is making a roaring comeback based upon its cost-of-living, ease of travel throughout the US and Europe. In Pittsburgh you have access to some of the country’s best universities, such as Carnegie Mellon and University of Pittsburgh. In addition to higher education, Pittsburgh is quickly becoming a preferred location for tech firms, with Google and Apple holding offices within city.
Companies in Pittsburgh: The Kraft Heinz Company, WESCO International, PNC Financial Services, Argo AI, and U.S. Steel are some notable companies in Pittsurgh. The location is popular for companies within energy, hgiher education, and information technology and communications sectors.
Tennessee
When trying to narrow down your list of best states for starting a business in the US or for office relocation, Tennessee could be quite the contender. Tennessee offers great connections to markets within other states, after all the state attracts 120 million visitors per year. Could you be one of them?
Pros of starting a business in Tennessee
The work-ethic in Tennessee is very strong
A business-friendly environment.
Lower cost of living than East Coast states.
Affordable office rent.
Unique location – On the South-east of the US, Tennessee is close to the midwest, and not too far from the east coast when doing business. It’s unique location make it only a 11-hour drive time of 60% of the US population. (This is short in comparison to US standards, where long drives are the norm!)
Bustling cities filled with musical culture – Tennessee is famed for it’s musical culture and scenic views. Famous cities include Nashville and Memphis.
Cons of starting a business in Tennessee
Extremely humid weather and a prime location for hurricanes and tornados
Corporate income tax rate of 6.5% is considered middle-of-the-road compared to other states like Texas in the middle of the US that no income tax.
To find out why over the last few years more companies have been relocating to Tennessee, making it a contender for one of the upcoming best states to do business in the US, we interviewed a representative from the Tennessee Department of Economic and Community Development.
Ready to Move to One of the Best States for Starting a Business?
East coast states like New York and California have traditionally been regarded as the best states for starting a business in the US due to the number of famous companies located there and access to ambitious individuals to hire as staff and network within high profile industries. But don’t forget to give other cities in America consideration when starting a business in the US, as the cost of living, taxes, and market demand could be more beneficial is lesser known states.
Deciding the best states for starting a business can be a difficult decision, and is definitely one not to be rushed. Luckily, we have counted down the top ten best states for business based on popularity with our clients relocating to the US, so you can find out more about areas above that caught your eye already, including income tax rates and other fun lifestyle facts.
If you need a helping hand, make sure to give one of our US Expansion Experts a call. Not only will we help you map out your US expansion, but if you plan to hire employees in a new state or city, using PGC as your US employer of record will ensure that you remain compliant and can provide your US employees with the top healthcare benefits they need.
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.