pic: Joel J Gonzalez @joeljgonzalez (Unsplash)
The Covid-19 pandemic has changed our lives. Its dynamics and the crisis it has caused has also reached large technology companies, which are beginning to accelerate their plans to seek new challenges. Silicon Valley, considered the paradise for startups and the undisputed cradle of the technological revolution, is no longer attractive to many large companies which are considering the tax advantages that states like Texas or Florida are offering them.
More flexible tax conditions
Thus, California has received harsh criticism from industry figures such as Elon Musk, Tesla CEO and founder of Space X. In recent statements to the Wall Street Journal he stated that “bad policies discourage business and innovation, stifle opportunity and make life in major cities ugly and unpleasant”.
Like Texas, Florida is one of the few states with no income tax. This is very attractive for employee relocations. Meanwhile, the combined corporation tax (state and federal), which is 28% in California, stands at 24.6% on the beaches of the southern state.
It’s not just tech companies that find these perks attractive: about 70 financial services companies have already moved from New York to Florida. On top of that, the presence of three international airports, one of the most important ports in the world and an advanced transportation system, add attractions to this booming state.
In recent weeks, the mayor of Miami, Francis Suárez, has stated that he is currently holding conversations with senior Silicon Valley executives about the advantages of Miami as a new technological hub. Among them are not only Elon Musk but Jack Dorsey, Eric Schmidt, Peter Thiel and many others.
Miami promises a more business-friendly environment, as California looms as an inhospitable territory for regulation and taxation. To make it happen, Miami will appoint its first technology director who will provide counseling services to streamline the bureaucratic procedures necessary for the transfer of high-tech companies to the city.
Although Silicon Valley will continue to be the center of the technology industry, this pandemic-accelerated migration has brought personalities such as Shervin Pishevar, Jonathan Oringer, Keith Rabois, and David Blumberg to Florida.
In addition to tax advantages, other incentives such as lower costs of living and the avoidance of existing state and municipal laws in California explain the interest in many companies to move their headquarters, which is forecast to accelerate in 2021.