Relocation of Base Operations

Texas is once again making headlines as a top destination for businesses, with Forbes ranking it as the second-best state for businesses in the country, just behind North Carolina. The Lone Star State's reputation as the "best state for business" is well-earned, thanks to its lack of personal and corporate state income tax, reasonable regulatory climate, and various business incentives.

One of the most significant recent moves was Tesla, Inc.'s decision to relocate its headquarters from Palo Alto, California, to Austin, Texas, in 2021. The company cited the business-friendly climate as the number one reason for its relocation.

Tesla's move was not an isolated incident. According to a report by CBRE, a global real estate services and investment firm, 96 new corporate relocations were added to its list last year. Other prominent companies that have made the move from California to Texas include Oracle, Hewlett-Packard, and CBRE itself.

Oracle, a multinational computer technology corporation, moved its headquarters to Austin in 2020. The company is currently planning to relocate to Nashville, Tennessee, in 2024, citing a desire to be closer to the health care industry. However, Oracle received about $250 million in tax breaks to make the move, part of which was approved by the state in 2021.

Many companies are moving to Texas to be closer to their current or future consumer base for potential growth. Dallas, Austin, and Houston are popular destination cities in Texas, each offering their own Economic Development Incentive Policies.

The CBRE report found that most companies moved for reasons such as finding office space that better suits their needs or supporting hybrid work. Dutch Brothers Coffee, a popular coffee company, is one such example. The company initially moved 40% of its corporate roles to the Phoenix area earlier this year and plans to relocate even more roles to Tempe, Arizona.

International companies made up 25% of headquarters relocations in the CBRE report last year, demonstrating Texas' appeal to businesses worldwide. As the most common destination for headquarters relocations, Texas continues to solidify its position as a hub for businesses in the United States.