So I went down a rabbit hole trying to figure out the best state to start a business, and what started as a quick Google search turned into me staring at spreadsheets like I was about to solve a murder mystery.
You ever do that? You start with one simple question and suddenly it’s 1:14 AM and you’re comparing corporate tax rates in three different time zones?
Yeah. That was me.
I live in the US, and if you’ve ever tried starting something here, you’ve probably heard the usual advice:
“Just incorporate in Delaware.”
“Move to Texas.”
“Florida has no income tax, bro.”
Everyone has an opinion. Nobody agrees.
So I decided to actually look at all 50 states. Not just taxes. Not just hype. Real-world stuff like cost of living, filing fees, regulatory headaches, workforce, and—this part’s underrated—the general vibe.
Because yes, vibe matters.
First, Let’s Admit Something
There is no magical “perfect” state.
Sorry.
If you’re hoping for one clear winner where angels sing and the Secretary of State personally hands you a gold LLC certificate… that’s not how this works.
But some states do make it easier.
And some states? Whew.
Let’s just say they test your patience.
The Heavyweight Champion: Delaware
We have to start here.
If you’ve Googled “best states for entrepreneurs,” you’ve seen Delaware’s name pop up approximately 47 times.
Why?
- Business-friendly laws
- The Court of Chancery (fancy business court, no juries)
- Investors love it
About 60% of Fortune 500 companies are incorporated there. That’s not random.
Even giants like Walmart and Amazon are Delaware corporations.
But here’s the catch.
If you’re running a small local bakery in Ohio, incorporating in Delaware might just mean extra paperwork and fees.
It’s amazing for venture-backed startups.
Less exciting for local service businesses.
The No-Income-Tax Darlings: Texas & Florida
You can’t talk about the best state to start a business without mentioning these two.
Texas has:
- No state income tax
- Huge economy
- Growing startup scene (Austin is wild right now)
Florida also has:
- No state income tax
- Lower regulatory friction in many industries
- Tons of population growth
I’ve visited Austin a few times and you can feel it. Coffee shops full of founders. People talking about funding rounds like they’re ordering tacos.
But cost of living in Austin? Not as cheap as it used to be.
And Florida’s insurance situation? Complicated.
See what I mean? Trade-offs everywhere.
The Quiet Overachiever: Wyoming
Wyoming doesn’t shout.
It just quietly offers:
- No corporate income tax
- No personal income tax
- Low filing fees
It’s like the introvert of business-friendly states.
If you’re running an online business or holding company, Wyoming can be very attractive.
But if you’re building a physical operation? Workforce size becomes a factor.
You can’t hire what doesn’t exist.
The Startup Ecosystem Kings: California & New York
Okay. Deep breath.
California is expensive. Taxes are high. Regulations can feel like a maze.
But.
Silicon Valley exists for a reason.
Companies like Apple and Google didn’t grow in a vacuum.
Access to investors, talent, accelerators—it matters.
Same with New York.
Media. Finance. Tech. Proximity to opportunity.
But if you’re bootstrapping with limited runway? The cost can be brutal.
I once priced out office space in San Francisco and almost spit out my coffee.
The Affordable Climbers: Tennessee & North Carolina
These states are interesting.
Lower cost of living. Growing tech scenes. Solid infrastructure.
Nashville and Raleigh are quietly becoming hotspots.
If I were starting a mid-sized tech company today and didn’t need Silicon Valley proximity? I’d seriously consider them.
What Actually Matters (Besides Hype)
After analyzing all 50 states, here’s what kept coming up:
1. Taxes (Obviously)
Corporate tax. Personal income tax. Franchise tax.
Some states like Nevada also advertise no income tax—but watch the other fees.
2. Cost of Living
If you’re bootstrapping, lower rent = longer runway.
It’s math.
3. Industry Fit
Starting a farming business in Manhattan? Probably not ideal.
Fintech in rural Montana? Also… maybe not optimal.
4. Workforce Availability
You need talent.
Or at least Wi-Fi.
5. Your Actual Life
This one gets ignored.
Do you want to live there?
Because building a startup is hard enough without hating your surroundings.
The States That Surprised Me
I didn’t expect to be impressed by Utah, but its startup ecosystem is growing fast.
I also underestimated Colorado—strong tech community, quality of life is high.
Meanwhile, some traditionally “big” states weren’t as founder-friendly as I thought once you factored in total costs.
It cracked me up how much the narrative differs from the numbers.
My Honest Take on the Best State to Start a Business
If you’re:
- Raising venture capital → Delaware incorporation, maybe physically in California, Texas, or New York
- Bootstrapping online → Wyoming, Texas, Florida look appealing
- Building a local service → Your home state might actually be best
There’s no universal answer.
I know, I know. Not dramatic enough.
But it’s true.
A Quick Reality Check
Back in 8th grade, I wore two different shoes to school. Not on purpose. It was a Monday.
I survived that.
You’ll survive picking a state.
The decision feels enormous at first. But most founders adjust, pivot, restructure if needed.
Companies relocate all the time.
You’re not signing a blood oath.
If You Want My Personal Bias
If I were starting fresh today, bootstrapped, online-focused?
I’d look hard at:
- Texas
- Florida
- Wyoming
If I were building a venture-backed tech startup?
Delaware incorporation. Probably base in a strong ecosystem state.
If I wanted balance between cost and growth?
Tennessee or North Carolina feel underrated.
Final Thought (Not Polished. Just Real.)
The best state to start a business isn’t just about taxes.
It’s about momentum.
It’s about where you’ll feel energized instead of drained.
Because building something from scratch? That’s already chaotic.
Your state should support you—not feel like another obstacle.
And if you’re currently staring at Zillow listings in three different states while comparing franchise tax tables…
You’re not overthinking it.
You’re just building thoughtfully.
And honestly?
