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North Carolina has received another top-10 ranking for its business climate, this time listed as seventh in a report focused on business startups during 2022.
According to business consulting firm Venture Smarter, North Carolina had a business growth rate of 9.20% from 2021, or from 325,058 to 354,823.
For comparison sake, Georgia ranked first for 2022 with a business growth rate of 13.5, or from 350,189 to 397,515. Virginia was second at 10.5%, or from 305,345 to 337,394.
The firm cited North Carolina having the lowest corporate income-tax rate in the country at 2.5% for states that have such a tax.
“With the key benefits of starting a business in the states mentioned, it will be fascinating to witness the business growth rate over time and see how many more entrepreneurs thrive with the available support,” Venture Smarter said in its news release.
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“However, regardless of your state, it’s vital to research the fees you will be expected to pay as they can vary significantly across states — not to mention, there are many incentives to take advantage of if you are eligible that can make the process of starting a business smoother and cheaper.”
In May, the N.C. Secretary of State Office said there were about 61,000 new businesses established during the period of January through April in 2021, 2022 and 2023.
A prevailing economic theory has been that the COVID-19 pandemic spurred a surge of business startups in North Carolina as employees opted to work for themselves or pursue an entrepreneurial dream.
“North Carolina’s entrepreneurial spirit is alive and well as new business creation filings remain historically high compared to pre-COVID creations,” Secretary of State Elaine Marshall said.
“We recognize that small businesses are the lifeblood of our communities and the foundation of a strong North Carolina economy.”
Marshall said her office is “aggressively looking for ways to help these business owners get across to available resources to help their new ventures become successful.”
A year ago when the Secretary of State’s office released the 2022 business filings, N.C. State economics professor Michael Walden questioned whether the interest in startups was at a peak.
Fast forward to May 2023 and Walden says startups remain an attractive alternative. Walden explained that because of North Carolina’s strong economic growth and nationally recognized business climate, “the state is a natural for people who want to start new businesses.”
Winston-Salem, in particular, is at a near record pace for business startups.
Wallethub, a national economic research group, determined Winston-Salem to be the best large city for business costs and 13th overall for new businesses.
Other rankings
North Carolina rose slightly — going from 10th to ninth — in the annual Tax Foundation report comparing state corporate tax costs across the country.
The study, released Oct. 26 and covering 2024, ranks states in five primary tax categories: corporate; individual income; property; sales; and unemployment insurance. The state ranked fifth for corporate, sixth for unemployment insurance, 12th for property, 15th for individual income and 20th for sales.
In July, CNBC listed North Carolina as its top state for business for the second consecutive year. It’s only the second time a state has repeated in the CNBC rankings.
However, CNBC’s coverage did not shy away from citing two divisive issues facing the state: secondary and higher education funding; and the Republican-sponsored abortion ban bill that went into effect on July 1.
In explaining North Carolina’s return to the top, CNBC touted North Carolina’s top-ranked workforce quality and political collaborations between Democratic Gov. Roy Cooper and Republican legislative leaders on high-level socioeconomic projects.
That includes the GOP-controlled state legislature passing a Medicaid expansion bill that is projected to benefit between 450,000 and 650,000 North Carolinians, some starting as soon as Dec. 1.
In May, North Carolina was ranked as the nation’s top state for economic and business development projects, claiming the 2023 Prosperity Cup from Site Selection magazine for the third consecutive year.
The award is shared by the Economic Development Partnership of N.C. and N.C. Commerce Department.
In January, N.C. received another No. 1 economic designation from a media outlet, this time the 2022 State of the Year from Business Facilities magazine.
rcraver@wsjournal.com
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