On-hold: Expanding to the U.S.A. – New York City

In this article, we delve deeper in the city of New York. Start spreading the news, you’re leaving today… A sequel to our previous article, we will go over some basic information to peak your interest in this amazing city. Whether you call it New York, The Big Apple or The City That Never Sleeps, the question is: Do you want to be a part of it?

For clarification, we will talk about the county named New York City, which happens to share the same name as the state of New York but is not considered the state’s capital. That honour goes to Albany.

Key Takeaways

• New York is a city of various industries and offer a playground for virtually any business.
• People are available in abundance, interesting for those who need talent or a customer base.
• Overcome barriers with incentives, available in all sizes, for a variety of startups.

New York, New York

Originally founded and occupied by the Dutch, the city began as New Amsterdam and quickly became a key hub for intercontinental trade. Today, New York remains the largest port on the East Coast and the third largest in the United States. It is precisely this port that has contributed to the city’s thriving environment, fostering a diverse range of industries and opportunities.

New York maintains a pragmatic approach to the global economy, consistently investing in renewal and rebranding to embrace new opportunities. For this reason, it ranks as the number two city in the Global Startup Ecosystem Ranking by Startup Genome. NYC is home to more than 25.000 tech-enabled startups with an ecosystem value above $647 billion. Total VC funding from 2019 to 2023 is estimated at $145 billion.

While all sectors are welcomed, Tech, Health and Climate startups fare well in NYC. The former seems to fare well anywhere, but the latter two get special attention in NYC. Health becomes increasingly important in this dense city, so much even, that last year the Health Innovation Week was introduced. Little over 20% of the jobs in NYC are related to Health.

Climate, on the other hand, fares well with the progressive nature of NYC.Last year, the Climate Innovation Hub was opened with the aim of accelerating Climatetech, along with a ¢100 million investment to facilitate the ecosystem evolving around climate.

Make a Brand-New Start of It

Expanding a business to New York is almost a safe bet. The city offers a vast consumer base, a six-hour time difference which makes communication manageable, and as you wrap up your workday, your U.S. hub can start its day—potentially covering the West Coast as well when needed.

Depending on your business strategy, New York also provides access to highly specialised talent eager to contribute to your expansion and success. However, there is a downside: New York is notoriously expensive, and top talent expects compensation that reflects the high cost of living.

Some key considerations include:

• The cost of living index is 172.5, with 100 as the national average.
• The income tax rate is currently 10.90%.
• Scoring the “worst tax state” according to the Tax Foundation.
• The corporate income tax rate is set at 7.25%.
• Personal income per capita averages $85,136.

These factors should not be taken lightly. If financial concerns are a priority, there are viable alternatives to New York!

Be Incentivised!

While building your future in NYC, why not apply for grants or incentive to help your business boom. Bear in mind, there is one that some cases permanent residency is required.

• SBIR provides general grants for a broad variety of industries. but requires an American or permanent citizen as controlling party.
• START-UP NY grants are focussed on technology. It requires a partnership with a NY state college or university in order to become eligible.
• Female entrepreneurs can apply for an Amber Grant, to boost female entrepreneurs in NYC.

Gathering Talent

The common narrative is that Americans tend to be less loyal to their jobs and switch every 2-4 years, though debated by some. It feels safe to say that in comparison to Belgian employees, Americans do switch more often.

Because job sites tend to make wild claims about available positions, we’re going to have a look at the percentages of active jobs in NY to gauge the size and likelihood of finding talent in the area.

Note: hover or tap on the chart to see more information. (Un)select categories in the legend.

Excluding “Health Care and Social Assistance” and “Government”, the next five largest industries in NYC are “Professional, Scientific, and Technical Services” (9,77%), “Finance and Insurance” (7,8%), “Accommodation and Food Services” (7,74%), “Retail Trade” (6,72%) and “Administrative and Support and Waste Management and Remediation Services” (5,37%)

Worthy alternatives for NYC

Boston, Massachusetts

If you’d prefer to stay on the East Coast, Boston offers a very stimulating climate for tech and finance startups. Only about 350km away from New York and it all comes at a sweeter price. Highway 128 is developping itself as Silicon Valley’s little brother over the last decade. Though it isn’t necessary a hidden gem with a Cost of Living around 158 and just slightly lower tax rates.

Arlington, Texas

Arlington is neatly squeezed between the giant cities of Dallas and Fort Worth. It’s main selling point is a Cost of Living around 100 (around the mean) and the absence of personal income tax. However, we’ve mentioned in the previous article that Texas does not allow the pass-through status for LLCs and thus are subjected to a complex gross receipt tax. Nonetheless, the Lone Star state attracts financial players like Goldman Sachs, JPMorgan Chase and Deloitte to expand its business in Dallas.

Wrapping it up!

New York remains to be the undisputed capital in the Western hemisphere for Finance, Fashion and Media. Though, its flexibility to adapt allows for a broader variety of industries to take a foothold with it’s ready customer-base and its location allowing for a mixed expansion where a foothold on the European continent is still required. So get ready, gather your team and explore the possibilities New York has to offer for your business! Paraphrasing the famous lyrics: if you can make it here, you’re gonna make it anywhere. It’s up to you!

Taking the first steps in expanding your business to the U.S. or looking for a partner to guide your expansion? At CFOrent, we have our own nice hub across the Atlantic and we are no strangers to New York’s environment. Our team feels confident in assisting you to create your first subsidiary in the United States of America.

Get in touch today!

Sources

• New York’s notable SaaS players.
• Best places: Cost of Living.
• Personal Income per capita: source.
• State of New York’s tax index.