relocating business Archives

Texas continues to add successful projects to its economic development portfolio, and Global Site Location Industries (GSLI) continues to spearhead efforts supporting businesses gearing up to expand or relocate operations.

GSLI’s Choose Texas program focuses solely on connecting these expanding or relocating businesses with Texas-specific markets that best meet their project needs and goals without the costs and hassle of traditional site locators.

The following 11 Texas communities represent GSLI’s latest roundup of Choose Texas partners that offer companies unique opportunities for business – from competitive locations to robust infrastructure and skilled workers.

TexAmericas Center

Known for being a Top Ranked Business Facilities Location in 2021, the Texarkana region’s mixed-used industrial parks offer 3.5 million square feet and 12,000 acres of commercial and industrial property to expanding businesses. From its low operational costs, flexible facility options and access to Texas’ primary freight corridor (Interstate 30), TexAmericas Center brings 150 years of solid economic development experience to support the needs of its current and prospective tenants.

Most recently, TexAmericas Center announced efforts to combat the trucker shortage through a truck training partnership with Texarkana College. Through this partnership, space is offered to support the initiative to beef up the labor pool and continue to meet the increasing demand for drivers. Thanks to TexAmericas Center’s ideal location, students can benefit from the area’s space to practice and access multiple interstates and rail lines.

“We have tenants who need commercial truck drivers directly or need to make sure raw materials can be brought in and shipped out for finished products,” Scott Norton, CEO and executive director of TexAmericas Center, said recently. “We want to do everything we can to support a trained workforce.”

To learn more, visit texamericascenter.com.

Dumas

Located in the Texas panhandle, Dumas has a reputation for being one of the busiest and most historical small towns in the Lone Star State. In fact, Dumas was an essential production point for wartime products (including the largest helium deposit in the world) during World War II.

The city’s industrial park, located along the Ports to Plains International Trade Corridor, represents variety and opportunities. Current companies found in Dumas include Frito Lay Area Distribution Center, Equipment Supply Company, Inc. and Specialized Dairy Services.

Dumas offers expanding or relocating businesses a diverse range of industries to grow among, competitive transportation access points and a proactive approach to workforce development.

Through its partnership with Amarillo College-Moore County Campus, the city prepares the labor pool with resources relevant to industry needs. The Career Skills & Technical Training Center offers custom-based training to further develop skills needed to support growing businesses. Most recently, Dumas Economic Development Corporation worked with Beach Coders Academy to create a program specifically designed for web development skills and certification.

To learn more, visit dumasedc.org.

Laredo

Best known for its globally-minded business climate, Laredo is home to the No. 1 inland port along the U.S.-Mexico border, Port Laredo. The diverse city is about 150 miles from San Antonio and two hours from Monterrey, Mexico. Laredo represents the third position among the nation’s top five ports, after the Port of Los Angeles (No. 1) and runner-up Chicago O’Hare International Airport.

In terms of international trade, Port Laredo reported $205.88 billion of total global trade last year alone. Mexico, China and Japan are recognized as the top three trading partners of the city, with motor vehicle parts, gasoline/other fuels and diesel engines among top exports and motor vehicle parts, passenger vehicles and tractors among top imports.

There is an alphabet of transportation options for businesses located in Laredo. From air, water, highways, motor freight, rail, bus, parcel services and trade handling services, the options are equally efficient as they are competitive.

To learn more, visit laredoedc.org.

Sulphur Springs

Heading northeast, Sulphur Springs/Hopkins County offers a unique blend of small-town history and thriving business environment. The city is located just outside of the Dallas-Fort Worth (DFW) region along Interstate 30. The name Sulphur Springs is self-explanatory of the city’s history. Among the city gems still found there is the city courthouse, originally built in 1895, adding to the area’s traditional flair.

Looking at the business side of things, Sulphur Springs offers a robust and diverse industry presence with companies including Ocean Spray, We Pack Logistics, Aero Space Aluminum and B.E.F. Foods. The city’s advantageous transportation options offer businesses short and main line rail, air and NAFTA corridor access via Interstate 30. Did we mention the city’s municipal airport was named airport of the year?

Additionally, Sulphur Springs is known for its outstanding academic reputation, bragging state recognition every year since 1999, and preparing its workforce via the Sulphur Springs Higher Education Center. It is clear there is nothing “small” when it comes to doing business there.

To learn more, visit ss-edc.com.

Lancaster

The “Shining Star of Texas” lives up to its name, particularly when talking business. In 2020, Lancaster took the No. 1 position on Dallas Business Journal’s list of highest value deals by Economic Development Agencies, with an impressive $1.41 billion secured.

Expanding and relocating businesses can benefit from the city’s competitive job investment consisting of 1,000 jobs by 2023 offering wages between $30,000 and $76,000. Location is everything when deciding on where to grow your company, and Lancaster provides ideal access to rail and multiple interstates within a three-mile radius (including IH20, IH35E and IH45) in addition to Lancaster Regional Airport, Dallas Love Field and DFW International Airport all within a 35-minute drive or less.

Distribution and manufacturing are two driving forces behind the city’s economy with opportunity for artificial intelligence companies, cold storage, food processing & manufacturing and motor vehicle parts. Among Lancaster’s top employers are AT&T, Quaker Oats, Brasscraft, Oncor, LGS Technologies and DSV Logistics.

To learn more, visit lancaster-tx.com.

Andrews

If you have ever wondered what a successful micropolitan region looks like, the City of Andrews is one of the best examples. Known for being among the fastest-growing micropolitan areas in the state, Andrews was recognized as the fastest-growing county in the nation between 2010 and 2015.

Business development is supported several ways, one of which focuses on advanced training and postsecondary education opportunities through the Andrews Business & Technology Center. A result of a partnership between Odessa College, University of Texas Permian Basin, College of the Southwest and the city and county governments of Andrews, this training center is a prime example of how the area commits to preparing its workers.

The small-but-mighty community is home to companies looking for long-term options. Andrews has been the home of The Kirby Co. since 1972 and currently employs 162 workers. Advance Cooling Towers is another example of longevity in the area, with 20 years of business in Andrews. Salazar Service & Trucking Corp. has more than two decades of business in Andrews while Chemical Service Co., which was originally established in 1967, expanded operations in 2014, adding 15 new jobs over five years.

To learn more, visit andrewstxedc.com

Crockett

Known for being the county seat of the oldest county in the state of Texas (Houston County), Crockett is between Tyler and Houston, east of Waco. Incorporated in 1837 and named after legendary folk hero Davy Crockett, the City of Crockett embodies small-town culture, big business opportunity and a collaborative approach to development.

Industrial manufacturing is one of the primary economic drivers in Crockett. Among companies currently found there are Elastotech, Quantex, Alloy Polymers and Vulcraft.

Thanks to the town’s advantageous location, Crockett provides a multimodal transportation channel via: the Union Pacific freight rail; Highways 7, 21, 19 and 287; and DFW International Airport, George Bush Intercontinental Airport and Crockett Municipal Airport.

To learn more, visit crockettedc.org.

Harlingen

Located in the heart of the Rio Grande Valley, Harlingen is known for its diverse business portfolio and highly competitive access to international markets. In fact, the Port of Harlingen generates $1 billion in economic activity via import and export activity alone.

And we must point out the robust infrastructure available for businesses. Multiple telecommunications and fiber optic services, 15 electricity providers, natural gas & propane, and high-quality water/sewer make a critical difference for businesses located here.

The city consists of 3,545 establishments and a labor force of 33,482. Among top employers, those in education, healthcare, technology and manufacturing take the lead in Harlingen. Companies such as L&F Distributors, Valley Baptist Medical Center, Penn Aluminum International LLC and United Launch Alliance are all found there.

To learn more, visit harlingenedc.com.

Sunnyvale

Known for offering expanding and relocating companies a “business climate that shines,” Sunnyvale is east of Dallas, slightly northeast of Mesquite and within the DFW market, approximately 36 miles from DFW International Airport.

Manufacturing, warehouse & distribution and healthcare sectors can all be found in Sunnyvale, with other sectors sprinkled in. Healthcare and social services, construction, administrative and support services and retail are the leading industries. Among the city’s major employers are Texas Regional Medical Center, Dal-Tile and FedEx Distribution.

Sunnyvale’s labor force stands at 4,828 employees among 484 establishments

To learn more, visit townofsunnyvale.us.

Clyde

If you have not already caught on to the vast number of small towns driving business in Texas, the City of Clyde should do just that. This small and highly charming town started with the building of a log cabin sometime around 1876 before people from Fort Worth would become the first to officially settle in Clyde.

A mix of public-private employers make up the business roster. A unique aspect of the city is that it is the opposite of what one would find in an unpredictable business environment. This city takes pride in the stability of its major employers and a quality of life-focused approach to business development.

Air, highway and rail access provide ideal logistics for companies seeking immediate access to multiple transportation options. Additionally, Clyde’s workforce and low operating costs support businesses looking for a competitive edge.

To learn more, visit clyde-tx.gov.

Paris

Last, but certainly not least, is the City of Paris, a.k.a. “The Best Small Town in Texas.” Paris is where one can find that classic small town feel without compromising opportunities for business.

Healthcare leads the industries in this town, with Paris Regional Medical Center and multiple outpatient facilities. The town’s 200-acre industrial park is another significant asset, offering several shovel-ready options.

Served by the Kiamichi Short Line Railroad Co. and the host of Cox Field, Paris offers a variety of competitive transportation options, including multiple motor freight carriers. Looking for competitive wages and a skilled industrial labor shed? Paris has those, too.

To learn more, visit parisedc.com.

A confluence of economic, political, and logistical issues is coming together that is changing the dynamics of doing business internationally for many U.S. companies. The result: China may be falling out of the top spot as a location for American companies looking to establish foreign operations, with several other low-cost countries vying to replace it. But the situation is complicated. American companies that already have operations in China are not leaving, at least not in large numbers.

The complex dynamics that are influencing U.S. companies considering establishing foreign operations include the fact that certain countries are more advantageous than others for certain industries. While the popular perception is that American companies take their manufacturing abroad primarily to save labor costs, in reality, they often establish foreign operations to serve growing foreign markets. If you have a burgeoning customer base in Germany, it may be more cost-effective to manufacture your goods in Poland than in Thailand. And if your company is in the technology space, China still may be a better destination for you than if you manufactured consumer goods.

In other words, there is no one-size-fits-all solution. American companies eyeing foreign operations must do their homework and talk with advisors both at home and abroad to determine the best course. Once they do their homework, most companies will find that four broad trends are driving decisions about establishing foreign operations these days.

Digital Game Essential

First, due to the COVID-19 pandemic, remote work has become a worldwide phenomenon. The more digital and cloud-based your operations are, the more successful you will likely be with your foreign operations. Some general guidance would include:

-Before considering going abroad, evaluate your company’s commitment to technology and determine where upgrades should be made.

-Learn about the technology infrastructure in your target country and make sure it can support your company’s technology profile and needs.

-Don’t forget about workers; you’ll need to ascertain the level of technology skills possessed by your potential new workforce.

Incentives Change with Landscape

Second, every country has a set of incentives in place to attract foreign companies to their shores. Most incentive programs favor certain industries above others.

The Chinese government currently has highly preferential policies to encourage technology businesses to locate in China, especially those related to artificial intelligence and semiconductors. While China is falling out of favor with other manufacturers, if you are operating in one of its favored industries it may still be worth consideration.

While technology companies still find China a viable place to establish or maintain operations, traditional manufacturers in such industries as textiles and apparel are looking elsewhere. Wages in China have doubled in the past 10 years, so labor costs – once the dominant attraction for American companies – no longer provide an advantage.

Consequently, countries like Thailand, Cambodia, Vietnam, India and Mexico are rapidly rising as sites for American companies due to many of the same factors that once made China attractive. Low labor costs, skilled workforces and fewer regulations are attracting American companies.

Moreover, because of the rising costs in China as well as increasing political tensions between China and the U.S., other countries are stepping up their incentives for American companies to locate within their borders.

Each country has unique advantages and disadvantages, and U.S. companies need to weigh the value that these locations would bring depending upon their industries, products and services.

For example, Mexico offers the benefit of being close to American markets, reducing shipping costs and avoiding tariffs. In Southeast Asia, Vietnam makes it easier than China to move goods into and out of the country and offers the most knowledgeable workforce. India is not far behind in terms of workforce. However, India prohibits the export of many goods to protect supplies for its own massive population. Currently, the material used to make surgical masks cannot be exported out of India – a significant disadvantage for American companies with Indian operations that tried to pivot to respond to the worldwide need for protective equipment during the COVID-19 pandemic.

Companies Re-evaluating Supply Chain Strategies

Third, the supply chain and the ease with which goods move in and out of countries must be a part of the evaluation process when establishing operations abroad.

For the most part, U.S. companies moving to the emerging Asian countries and Mexico are those that are establishing foreign operations for the first time. American companies with operations already in China are staying put for now, even though steep tariffs that the U.S. has placed on goods shipped from China are impacting their profitability.

In part, they are staying in China due to supply chain issues. When large companies like Apple went to China, their supply chains went with them. Companies that supply those large manufacturers find it more cost-effective to be where they are. But if a large company decides to pull out of China, its supply chain remains there, and it must deal across borders with suppliers. Hence, companies that are already planted in China – even those much smaller than Apple – can find it very hard to leave.

U.S.-China Trade War

The fourth trend is the ever-increasing tariff war between the U.S. and China, which has significantly impacted American companies looking to establish operations in Asia. Companies already located there are seeing their profitability drop because of the tariffs, and deterioration of the political relationship between the two countries – complicated by COVID-19 – has contributed to China falling out of favor with American companies.

The increasing tensions between the U.S. and China also have started to impact immigration rules, making it difficult for some U.S. companies to get their American employees into China. This is a real-world example of how geopolitical considerations can impact the day-to-day operations of American companies.

Beyond these four trends, U.S. companies considering establishing operations abroad to serve growing global markets should look at several important factors:

Location of customer base

The location of your international customer base is a big driver in determining which country to choose for your foreign operations. You want to minimize transportation and shipping costs, and you also need to consider where your supply chain is concentrated.

Entity structure

Creating a separate entity from your U.S. entity will help keep the domestic and international operations distinct, protecting you from legal and liability issues. A subsidiary structure may be best, depending on the type of operation you are establishing.

Consider the local laws in each country that govern foreign operations, and how they may impact you. For instance, in China and India it’s very difficult for a foreign company to own 100% of a business, depending on the type of company and industry. Those countries, and several others, require foreign businesses to set up entities with at least some minimal local national ownership.

Taxes

Your entity structure will largely determine how tax-efficient your foreign operations are from both the U.S. and local countryside, but it is still advantageous to locate in a country with a low-income tax rate.

Beyond income tax, you need to consider the tax consequences of repatriating cash back to the U.S.

If you select a country with which the U.S. has a tax treaty, you will find a more friendly attitude toward repatriation. When repatriating funds from foreign operations, withholding taxes often can reach 30%, but if there’s a tax treaty in place the repatriation cost can sometimes be reduced to zero.

Taxes can’t always be the driving consideration in deciding where to locate a foreign operation. There are a lot of moving parts, including workforce, overall costs, logistics (can you get a product in and out easily), quality of internet and technology infrastructure, immigration policy for your American workers, and more.

If you are considering establishing a foreign operation for your company, reach out to your Windham Brannon advisor. Even if you expect to wait until after the global COVID-19 pandemic is safely behind us, now is the time to start planning.

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This article was written by International Tax Partner, Nicole Suk

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