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Texas is home to some of the best cities to start a business

by Emily Marek

Three cities in the Lone Star State ranked as some of the best in the nation when it comes to starting a business, according to a report from commercial real estate analyst 42Floors.

Using data from the U.S. Census Bureau, 42Floors determined that Austin, Dallas and Houston are among the best cities in the country to start a business.

One major business-friendly perk in Texas is the statewide 0% corporate income tax — but in order to rank each city, 42Floors also looked at each metro’s percentage of startups established between 1 to 5 years ago, percentage of businesses that ceased operating (establishment exit rate), amount of coworking spaces per 100,000 residents, percentage of startup-oriented companies, prices in the area compared to the national average (regional price parity), labor costs and office space costs, as well as income tax and state and local tax.

Austin ranked at No. 3 overall, with startups at a 43.3% share of all businesses citywide. The city also boasts some of the highest amounts of coworking spaces, with 3.5 spaces per 100,000 residents. Austin additionally ranked at No. 3 when it came to the share of startup-oriented companies and third-lowest when it came to companies that had ceased operating. However, the city was also identified as the most expensive place to rent office space.

Dallas ranked at No. 8 overall, despite the fact that the metro had the highest regional price parity of all cities analyzed at 105.1, meaning prices are about 5% more expensive in Dallas than in the rest of the country. The metro had a startup percentage of 40.5%.

Houston came in at No. 9 with a startup percentage of 39.1 and an establishment exit rate of 18.2%. Both Houston and Dallas have just under three coworking spaces per 100,000 residents. Houston also had the lowest cost of labor of all three Texas metros in the top 10 at only $45,750.

Las Vegas ranked as the No. 1 place in the country to start a business — similar to Texas, Nevada has a 0% corporate income tax rate, and costs in the city are about 3% lower than the national average.

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