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Unlocking U.S. State Incentives:
When international companies think about registering their U.S. entity, Delaware often comes to mind. Known for its business-friendly tax laws and robust legal framework, Delaware is a popular choice for incorporation. However, while it offers distinct advantages, it may not be the optimal location for every company. Factors like proximity to key customers, industry-specific incentives, and infrastructure considerations can make other states a better fit for your U.S. operations.
The United States offers a diverse range of state and local incentive programs designed to attract international businesses. Beyond tax benefits, strategic location choices can significantly impact your company’s success. Let’s explore why location matters and highlight some state programs that might fit your business needs.
Why Location Matters
Where you register your business in the U.S. can significantly impact your growth trajectory. Tax advantages often headline state incentive programs, but other factors can be equally important, such as:
- Access to Target Markets: Is the state close to your primary customer base or key partners?
- Industry Focus: Does the state offer specific benefits for your industry?
- Workforce Availability: Can you find the talent you need locally?
- Infrastructure and Logistics: How easy is it to move goods or provide services from that location?
Making a strategic decision early on can save you time, money, and operational headaches in the long run.
U.S. State Incentive Programs for International Companies
Here are four state-level programs that highlight the diverse opportunities available to international businesses:
1. Washington, DC: Vitality Fund
The District of Columbia’s Vitality Fund aims to attract businesses—including international companies—looking to relocate or expand into DC. By focusing on job creation, capital investment, and workforce development, this program supports industries like technology, life sciences, and education. While international businesses are eligible, they must meet criteria such as occupying commercial office space and committing to workforce engagement or local contracting. Learn more at the Vitality Fund.
2. North Carolina: Job Development Investment Grant (JDIG)
North Carolina’s JDIG program offers discretionary grants to businesses, including international companies, that create high-paying jobs and invest in the state. The program is designed to boost industries such as biotechnology, IT, and clean energy. International companies are encouraged to apply if they meet job creation and investment thresholds. Awards are distributed annually for up to 12 years and are based on a percentage of the personal income tax withholdings of new jobs created. Learn more at JDIG.
3. Texas: Texas Enterprise Fund (TEF)
The Texas Enterprise Fund is one of the most significant deal-closing funds in the U.S., offering substantial financial incentives to international companies making significant capital investments and creating high-paying jobs. Target industries include energy, aerospace, and technology. International businesses are eligible, provided they meet investment and job creation requirements. This fund is particularly advantageous for businesses seeking to make a long-term impact in the U.S. market. Visit the Texas Enterprise Fund for more details.
4. New York: Excelsior Jobs Program
New York State’s Excelsior Jobs Program offers refundable tax credits to businesses in targeted industries, including green technology, life sciences, and software development. International companies that meet job creation and investment thresholds can benefit from these incentives, which support businesses expanding to or relocating in New York. Learn more at the Excelsior Jobs Program.
Advice for Non-U.S. Companies
International companies should take the following into consideration when evaluating U.S. state incentives:
- Understand Eligibility Requirements: While many programs welcome foreign businesses, ensure you meet the specific criteria, such as job creation or investment thresholds.
- Leverage Local Partners: Collaborate with local chambers of commerce or economic development offices to navigate incentive programs.
- Plan for Cultural Nuances: U.S. business practices can differ from your home country, so investing in cross-cultural training can help avoid missteps.
- Explore Industry-Specific Incentives: Many states target high-growth sectors, so align your expansion with states that prioritize your industry.
The Biden Administration’s Infrastructure Act: A Boost for Certain Industries
The Infrastructure Investment and Jobs Act, passed into law by the Biden Administration, allocates $1.2 trillion to rebuild and modernize U.S. infrastructure. International companies in industries such as clean energy, electric vehicles, construction, and telecommunications stand to benefit from this historic investment. By strategically positioning your U.S. headquarters, you can tap into these opportunities and align your business with state and federal priorities.
- Incentives by Industry: States often tailor their incentives to specific industries. Research which states prioritize your sector.
- Proximity to Customers and Partners: Being close to your stakeholders can enhance collaboration and logistics.
- Workforce Availability: Assess the local labor market for the skills you need.
- Infrastructure and Connectivity: Ensure the state’s infrastructure supports your business operations.
- Regulatory Environment: Understand state-level regulations and how they impact your business.
How We Can Help
Navigating the complexities of doing business in the U.S. can be challenging. From evaluating incentive programs to understanding local markets and workforce availability, Factum Global is here to guide you every step of the way.
Contact us today to learn how we can help you establish your U.S. presence, optimize your location strategy, and position your business for long-term success.
If you’re looking to explore opportunities or navigate the challenges of operating in the U.S., we’d be happy to have a conversation.
Let’s work together to turn the uncertainties of today into the business successes of tomorrow.
