Deciding where to found or relocate a business is never an easy affair. Like any business decision, risk is involved. Even with all the planning in the world, unforeseen difficulties are unavoidable.
The San Francisco Bay Area is one of the largest metropolitan areas with the highest concentration of tech startups. Nonetheless, many other metropolitan areas of the United States offer special benefits to businesses that are moving or founding technology companies within them. These benefits often include tax incentives and a lower cost of living.
For example, Los Angeles, California offers several tax incentives that cater to businesses that are planning to move or start in the city. Businesses that move or start in LA do not have to “[pay] gross [receipt] tax for three years.” And some small businesses do not have to pay gross receipt taxes, should they quality for Small Business Exemption.
New York also offers a wide variety of tax incentive programs including START-UP NY, a program launched in 2014 that “offers new and expanding businesses the opportunity to operate tax-free for 10 years on or near eligible university or college campuses in New York State.” The program focuses on advanced technology companies including materials & manufacturing, biotech & life sciences, tech & electronics, optics & imaging, cleantech & renewable energy, food & beverage, and transportation equipment.
New York City offers a wide variety of tax credits. See them all here.
According to Forbes, Austin, Texas rated number 1 on the list of Cities Creating The Most Technology Jobs. Forbes notes that in addition to creating new jobs, Austin does not have income tax, has “relatively cheap real estate and a strong tech community in a carefully planned and revitalized downtown.”
Many other cities not only offer tax benefits but, as in Austin, the operational and living cost are substantially lower than in larger metropolitan areas such as San Francisco and New York.
These cost conscious incentives are encouraging many tech companies to move to start elsewhere. While these incentives do not outweigh unavoidable business risks, the location of tech companies continues to grow and shape the world.
Should you have any questions or would like more information about incentives for relocating or founding a business, contact us.