Virginia’s economy is supported by diverse industries including agriculture, defense, life sciences, manufacturing, and technology. The largest data center market in the United States is located in Northern Virginia.
Reasons for doing business in Virginia
One of Virginia’s main competitive advantages is its educated and skilled workforce. According to the Virginia Economic Development Partnership (VEDP), nearly 40% of the population has a bachelor’s degree or higher. Virginia also has a community college system that produces graduates who are prepared to work in tech, manufacturing, wind energy, and other specialized industries.
For companies needing access to national and global markets, Virginia provides a strategic, central location on the Eastern Seaboard. Arlington, located in the northern part of the state, is only a few miles away from Washington, D.C. The close proximity to the nation’s capital is just one of the reasons why Boeing and Raytheon Technologies Corp. decided to move their global headquarters there.
Virginia also offers business incentives in the form of tax credits and exemptions, grants, and financial assistance that go towards reducing the costs of opening or expanding business facilities.
How is the infrastructure in Virginia?
In CNBC’s Top States for Business report, Virginia was ranked number two overall. This high position was due in part to Virginia’s infrastructure, for which the state received a grade of B. CNBC weighted this category more heavily than in previous years due to the importance of building up the nation’s supply chain. Virginia is an important supply chain destination and is currently home to hundreds of major supply chain companies and logistics companies.
CNBC also took into consideration broadband accessibility due to the increase in employees working from home. Virginia had previously invested hundreds of millions of dollars into expanding affordable, high-speed internet to more homes.
What is the cost of doing business in Virginia?
Virginia has a 6% corporate income tax and an individual income tax ranging from 2% to 5.75%. The state sales tax rate is 5.3%. Some jurisdictions levy an additional local sales tax.
The costs of doing business are generally at or below average compared to the rest of the U.S. Living costs have risen in recent years, especially in areas with a more competitive housing market. But overall, costs are still lower when compared to places like New York and California.
What are the challenges of doing business in Virginia?
Northern Virginia in particular has been experiencing a decline in population due to higher living costs. This may make it difficult for some businesses to find workers.