For European companies looking to do business in the United States, the standard difficulties of international business are complicated. From tax structures to native industries to corporate incentives, each state has a unique combination of opportunities and challenges. With that in mind, here’s a look at ten of the best states for investment:
New York
Opportunities: New York City is the world’s financial capital, the American centre for fashion, and a major manufacturing hub. Its “Silicon Alley” community rivals the tech hubs in Massachusetts and Silicon Valley. Companies interested in craft food and beverages are especially well-positioned, thanks to a strong domestic market, significant state incentives, a rich talent pool, and strong distribution networks.
Outside of New York City, the state has considerable opportunities for companies interested in agriculture, manufacturing and distilling. Upstate locations are well-positioned for access to Canadian markets.
Infrastructure: New York City is a significant travel and distribution hub. Companies located there have access to a wide range of rail, highway, seaborne and airborne transportation and shipping options.
Incentives: New York City and state offer a wide range of business incentives, particularly for companies that are making capital investments and can relocate. Heidi Shea Springer, vice president for economic development and market research at the New York Grant Company emphasises Start-Up NY, a state program that can offer major tax benefits. “If a company is doing any work that aligns with a university, it’s a no-brainer,” she says. In addition to offering tax-free business opportunities at the corporate level, Start-Up NY also offers personal tax exemptions for companies with qualifying employees.
Georgia
Opportunities: While Georgia is, arguably, best known for its agribusiness sector, Chris Carr, commissioner of the Georgia Department of Economic Development, notes that the state has “seen solid growth in automotive manufacturing, floor covering and food processing”. In fact, he says, the state “leads the nation in exports for a few sub-sectors within these areas”. Georgia also has the largest military presence in the US, with all of the military support opportunities that that entails.
Infrastructure: In addition to several convenient seaborne shipping and rail options, Georgia has Hartsfield-Jackson Atlanta International Airport, the busiest airport in the world.
Incentives: “We have seen a lot of activity from companies in Germany, Japan and Korea, especially in automotive and advanced manufacturing,” Carr says. He cites QuickStart, the state’s workforce training program, as a major influence on that influx of business. Georgia also offers a wide range of tax credits designed to encourage everything from job creation to research and development to use of Georgia state ports. One of the more expensive southern states, it also offers grant opportunities that are structured to offset the costs of locating there.
California
Opportunities: In addition to the nation’s strongest manufacturing economy, California also has a very robust agricultural sector, as well as Silicon Valley, America’s tech innovation hub. Companies looking to move to California often focus on San Francisco, but Springer argues that the best options might be in lower-cost cities like Los Angeles and San Diego, which are often more eager to attract outside investment. On the other hand, she cautions, European companies establishing US operations may want to consider the difficulties involved in setting up an operations base halfway around the world. The time zone differences and additional travel time and costs can eat away at profits.
Infrastructure: Depending on which part of the state a company is looking to locate, advantages include access to markets in the Pacific Rim and Mexico. California also has a strong rail and highway infrastructure, although access to shipping may vary, depending on location.
Incentives: Brook Taylor, the deputy director of California’s Governor’s office of business and economic development, emphasises the breadth of California’s business landscape. “We foster a number of different industries, and they’re equally important to us and equally robust,” he explains. This fostering takes the form of significant tax incentives for job creation, as well as sales tax breaks for companies involved in manufacturing and research. The state also offers California Competes, an income tax credit program targeted at small businesses looking to establish operations in the state.
Texas
Opportunities: While best known for its oil production, Texas has long since diversified to attract a wide range of industries, including aerospace, biotech, and food production. Austin and Dallas offer particularly good opportunities for tech-based companies, Springer says.
Infrastructure: With 29 ports and 27 commercial airports, Texas is well-positioned for import and export trade. In fact, it leads the country in international exports.
Incentives: Texas provides – by far – the most incentives of any US state. According to the New York Times, it gives $19bn in incentives every year; by comparison, all state and local governments in the US give a combined $80bn in incentives. Most of these incentives, however, are aimed at larger employers looking to establish manufacturing plants and operations. For small businesses, Texas offers a limited number of incentive programmes and loan supports, as well as programmes designed to help small business owners apply for federal research and development grants.
Louisiana
Opportunities: Louisiana is a major petroleum production centre, and has strong natural gas, agriculture, petrochemical, media production and fishing industries. For companies looking to save money on operations, it is less expensive than many other states, but has recently garnered attention for its robust GDP growth and favorable business environment, Springer says.
Infrastructure: Part of the reason for Louisiana’s low cost is that it is less developed than many other states. However, it has a highly developed seaborne shipping infrastructure, including the “Superport,” America’s only port capable of handling superships.
Incentives: Louisiana is especially interested in attracting software development and media production companies, and its incentives are structured accordingly. It also offers generous employment-related incentives and a variety of payroll rebates that are designed to encourage hiring.
North Carolina
Opportunities: “The research triangle says it all,” Springer says, referring to North Carolina’s renowned technology hub. Connecting investment from several Fortune 500 companies with research centres at numerous universities, the triangle is an outstanding opportunity for companies interested in biotech, pharmaceuticals, clean tech and information technology.
The state is also a major banking hub – Bank of America is based in Charlotte – and has strong tourism, agriculture, and media production industries.
Infrastructure: While serviceable, North Carolina’s transportation infrastructure isn’t a major selling point for the state. However, it has two large airports – Charlotte-Douglas and Raleigh-Durham, an extensive rail network and a respectable selection of seagoing ports.
Incentives: North Carolina offers a wide array of incentive programs designed to encourage investment in industries ranging from digital media to traditional manufacturing. The state’s job development investment grant structure offers significant economic benefits, which are scaled against taxes paid by new employees.
Florida
Opportunities: “Florida is growing like crazy,” Springer says. In addition to its traditional position as a tourism and retirement destination, the state remains a major aerospace centre. It also has a very strong agricultural and fishing sector, and is actively pursuing investment in science and tech, particularly medical and biosciences. It is also the nation’s leading market for motorboats.
Infrastructure: Florida is an especially good location for European companies interested in opening operations in the Caribbean and South America. It has four major international airport hubs, with regular non-stop service to numerous locations in Europe and South America.
Incentives: Florida offers a wide range of job-creation and tax-reduction incentives across an array of industries. However, it is especially targeted toward high-tech, science-intensive companies, and its incentive structure is particularly good for companies in that sector.
Washington State
Opportunities: For companies looking to support larger industries, Washington offers an interesting opportunity. “Rather than a network of small and medium-sized companies, there are several large employers who are served by a host of small businesses,” Springer says. It’s an especially promising state for companies working in tech: the state is home to both Microsoft and Amazon. Coffee giant Starbucks is also based there, and aerospace company Boeing maintains a large presence in the state.
Infrastructure: Washington has the nation’s twentieth-largest rail infrastructure and its ports are ranked sixth in the US by tonnage. Seattle-Tacoma International Airport is the fifteenth-busiest airport in the nation and is a major hub.
Incentives: Washington offers a variety of tax and hiring incentives, largely targeted at aerospace and high-tech industries.
Colorado
Opportunities: Colorado has a very diverse economy, and is especially strong in tech, tourism, food, and aerospace. As Springer points out, it’s in the west, but not the west coast, which makes it an attractive site for companies looking to move into the US. Its economy is rapidly growing, and it had 3.8% year-over-year GDP growth between 2012 and 2013.
Infrastructure: Colorado has an extensive network of freight rail, as well as Denver International Airport, a major hub with non-stop flights to destinations throughout the US, Asia, Europe and Latin America.
Incentives: Colorado has a fairly standard slate of loan incentives and tax rebates. It’s efforts are closely tied to hiring, employee development, research, and agricultural initiatives.
Massachusetts
Opportunities: Massachusetts is a tech powerhouse on the east coast. Thirteen Fortune 500 companies are based there, as are several of America’s most prestigious colleges and universities. It is especially attractive for biotech and biomed companies, although it also has impressive financial services and information technologies industries, a rich tourism sector and a strong fishing industry.
Infrastructure: Boston’s Logan airport is a major hub, used by over 50 airlines. The state also has an extensive port and freight rail infrastructure.
Incentives: “Massachusetts doesn’t have a heck of lot of resources for startups,” Springer says. She notes, however, that the combination of a strong small business network and some of the top schools in the US makes it attractive for businesses, particularly tech companies.
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