The Best States to Start Your Business in the US

The Best States to Start Your Business in the US

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As America is a federal state, the rules, regulations, and socio-economic and demographic factors for new business formations vary by state. Changing variables such as taxation, working-age population, government funds, and many more affect the establishment and development of companies. Therefore certain States draw more capital and investment than others.

By evaluating different content from sources such as seeking capital and tax foundation and considering various economic, social, political, and demographic factors that play into the success and sustainability of business operations. We have selected the ten best states to start your business in the United States:

  • Utah
  • Texas
  • Georgia
  • Colorado
  • North Carolina
  • Florida
  • Oklahoma
  • California
  • Montana
  • Wyoming

This is not news; America is renowned for its business-friendly environment, where numerous start-ups are initiated each year, and companies become internationally recognized brands. This is because the U.S. has long been a center of investment and innovation in various sectors ranging from technology to media. It continues to attract business individuals and their projects by creating convenient immigration opportunities and viable financial incentives. Furthermore, through the continuous flow of investment and bright ideas, America can race past the world's leading economies. It can provide its citizens and nonimmigrant residents with various employment opportunities.

Read Starting Your Business in the USA on our blog.

In that regard, let’s explore how certain states spearhead this business diversity and sustain the leading position of the U.S. in business productivity!

*Please be reminded that the states below are in no particular order.

Which State Should You Start Your Business?

Utah is one of the prominent states that rank high on several factors for the success of start-up businesses. The steady increase in the working-age population, easy access to venture capital, and angel investors make Utah a “go-to place” for corporate foundations. Recently, companies in Utah have achieved a total of $1.16 billion and $11.5 million per entity in funding. This is in line with the growth rate of start-up companies in Utah which shows overall business success and creates abundant employment opportunities.

Though Utah imposes corporate, individual, and sale taxes, they are at a comparatively low rate (4.95), enabling businesses to operate without the burdensome cost of taxation.


Texas is amongst the most popular states for entrepreneurs to start their businesses. This is because Texas doesn’t levy corporate or individual income tax, making the foundation of various company types easy and cost-effective. Besides, Texas rates high on venture capital investment with approximately $3 billion and has a dramatic 8 percent increase in the working-age population with 8 percent. These factors, together with the low cost of living and affordable property prices, allow beginning businesses to have a good start and prosper quickly in Texas.


Georgia and Atlanta are leading the recent ascent of Southern states as beautiful places to start businesses. Though Georgia has corporate and individual income taxes, their rates are low. Furthermore, these taxes are compensated by factors such as the high venture capital investment ($10.2 million per company), being rated well above the average in population percentage that started a new business (with 0.42 percent), and entrepreneurs' share that started their businesses out of opportunity instead of necessity.


Though Colorado doesn’t rate high on the venture capital invested in new businesses, it makes up for the lack of money with the early survival rate of its companies (81.12 percent). Besides, Colorado ranks excellent on the number of jobs created in the first year of start-up businesses with 6.45 and has a promising working-age population increase of 7.2 percent. Lastly, Colorado has one of the lowest corporate and individual income taxes throughout the United States, with 4.55 percent for each!

North Carolina:

One of the shining stars rising from the South, North Carolina’s venture capital invested in start-up businesses is one of the nation’s best, with $15.1 million per company. Easy access to capital and a solid 4 percent increase in the workforce enables Colorado businesses to have a survival rate of 81.2 and attract investors from both inside and outside the United States. This is strengthened by the fact that North Carolina has the third-lowest corporate income tax in America with only 2.50 percent, and one of the lowest individual income taxes with 4.99 percent!


The admiral ship of Southern states, Florida, is renowned for its one of the lowest actual labor compensation costs per hour and “no individual income tax” policy. Though Florida levies corporate income tax (5.5 percent), its rate is comparatively low and doesn’t affect the fact that Florida has the highest population percentage of new entrepreneurs, with 0.46 percent. The prevalence of unique business formations also makes Florida one of the leading states, with start-up companies creating 6.41 employment opportunities annually on average.


Even though the working-age population increase in Oklahoma is only 0.7 percent, its venture capital invested in new businesses is quite impressive, with $4.39 million per company. Moreover, Oklahoma is prone to entrepreneurship, with 0.39 percent of its population, which is higher than the national average, starting a new business. Cost-efficiency of doing business in Oklahoma also makes it the third-best state in the rating of early business survival rate (81.51 percent). Lastly, Oklahoma has modest corporate and individual income tax rates, which are 4 and 4.75 percent, respectively.


The start-up heaven for Americans as well as immigrants, California is by far the leading state when it comes to venture capital investment amount. Thousands of new businesses are initiated yearly, yet California provides a fantastic $27 million per company in funding.
Easy access to capital makes California an attractive hub for entrepreneurs whose population share is 0.45 percent. This rate is second-best in the country and designates the Golden State as a unique destination for start-up employment opportunities, with an average of 6.47 new jobs created annually. On the other hand, California's biggest and only downside is its high corporate and individual income taxes rates of 8.84 and 13.30 percent, respectively.


What makes Montana great for new business formation is its favorable tax rates. Montana has a comparatively low corporate and individual income tax rate (6.75 each) and no state income tax! Montana's other critically important opportunity is its inexpensive yet qualified workforce. “Montana has the second-lowest cost of real labor compensation at 31.56 per hour on average."


When it comes to being tax-wise business-friendly, no other state beats Wyoming as it levies neither corporate nor individual income tax at all! This makes the entrepreneur share rate of Wyoming's population one of the highest in America (0.45 percent). Though the working-age population of Wyoming is declining, it achieves a solid amount of venture capital investment per company. It has one of the highest early business survival rates, with 81.66 percent.

As we explained, starting a new business in the U.S. is a multifaceted journey with many factors contributing to the entrepreneurs' final decisions. Though America is a business-friendly country and supports local and foreign investments to improve its economy and create new employment opportunities, it is still a federal state with 50 different governments, making the business-formation processes much more challenging.

In that regard, it is best to consult an expert team of U.S. business law professionals to assist you throughout this long and bumpy road. As Grape Law Firm PLLC, we are here to be the experienced and quality legal assistance you need and can't wait to tend to your questions and inquiries. Please don't hesitate to send your emails to [email protected] or schedule a meeting via our Calendly calendar!


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