Is Phoenix, Arizona a Good Place to Start a Business?
Phoenix is one of the best cities in the country to start a business. It was recently ranked as the ninth-best U.S. city to start a business in 2020 by Inc. Magazine. Notable companies located in Phoenix include mattress maker Tuft & Needle and meal delivery service Freshly. Below are some of the many reasons why Phoenix is a great place to set up shop.
Start-up Friendly Regulations and Low Taxes
Arizona lawmakers have made a concerted effort in the past years to create a business-friendly environment with little regulation and low taxes. Arizona has a corporate income tax of 4.9%, which is significantly lower than other U.S. cities like New York City or San Francisco. Additionally, property and personal income taxes remain low as compared to the national average, and there is no franchise tax, no business inventory tax, and no estate tax.
Arizona also offers several tax credit programs to local businesses, including:
- The Quality Jobs Tax Credit. This program provides tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona.
- Angel Investment Tax Credit. This program gives investors a 30% state credit on qualifying investments or a 35% state credit for investments in rural or bioscience start-ups.
- Research and Development Tax Credit. This program provides Arizona income tax credit for increased in-state research and development activities.
Phoenix has a skilled and available workforce. The city has a growing population and added more than 25,000 new residents between 2017 and 2018. Nearby Arizona State University is a nationally recognized university, and its recent graduates feed the local talent base.
Low Cost of Living
As compared to other large cities like New York City and San Francisco, Phoenix has a low cost of living. In particular, housing costs are significantly lower than in other cities.
Support from the City of Phoenix
More than 95% of Phoenix’s businesses have fewer than 50 employees. The City of Phoenix is committed to supporting the small business community, and it provides numerous services at no cost.
- Consulting and Mentoring
- SCORE Greater Phoenix offers mentor service to guide small businesses at every stage.
- Maricopa Community Colleges Small Business Development Center provides workshops, mentoring, and one-on-one business problem-solving.
- Phoenix Management Technical Assistance connects small businesses to consultants for assistance in loan packaging, accounting and finance, human resources, technology, and other business operations.
- Phoenix Office of Customer Advocacy assists businesses in understanding the permits they need.
- S. Small Business Administration hosts workshops, webinars, luncheons, and loan programs.
- Financing Assistance
- Phoenix Community Development Investment Corp. assists small businesses and nonprofits in low-income areas with commercial loan participation.
- Small Business Administration Loan Clinic teaches small businesses how to approach lenders, find interested bankers, and improve capital acquisition success.
- Phoenix Neighborhood Commercial Revitalization offers grants to eligible small business owners for exterior improvements or improving neighborhood stability.
Your Phoenix Business Planning Attorney
Nicole Pavlik is an experienced business planning attorney based in Phoenix, Arizona. Call Nicole Pavlik Law Firm today at 602-635-6176 to schedule a free consultation and discuss your business planning needs.