Top 5 States for New Businesses Revealed
New data from the U.S. Census Bureau reveals the top five states where entrepreneurs are starting businesses at the highest rates.
While business applications have slowed slightly from last year’s record numbers, certain states continue to attract new business owners at impressive rates. We’ve analyzed the latest figures to highlight which states are leading the way.
Factors such as tax benefits, business-friendly regulations, and economic opportunities affect where people choose to form their companies.
Wyoming, Delaware, and Florida continue to rank high, while Montana and Colorado also show strong numbers. These states offer unique advantages, making them hotspots for new businesses.
Here’s a closer look at the top states for business applications and what makes them stand out.
The Top 5 States for Business Applications
Despite a nationwide dip in new business filings, certain states continue to see high rates of entrepreneurship.
The latest data from the U.S. Census Bureau shows that business formation remains strong in specific regions, with some states even experiencing year-over-year growth. Based on business applications per capita, here are the top five states where new businesses are being created at the highest rates.
1. Wyoming – The Nation’s Business Formation Leader
Wyoming takes the top spot with 10 new business applications per 100 people, more than any other state. In total, 59,356 businesses were registered in 2024, marking a 0.20% increase from last year. Despite its small population, Wyoming continues to punch above its weight in business activity.
2. Delaware – A Strong Runner-Up
Delaware ranks second with 5 new businesses per 100 people. The state saw 57,343 business applications in 2024, reflecting a 3.44% increase from 2023. Known for its corporate-friendly policies, Delaware remains a hotspot for business registration of publicly traded companies.
3. Florida – High Volume, Slight Decline
Florida recorded 631,900 business applications last year, the highest total of any state. However, when measured per capita, Florida ranks third, with 2.75 new businesses per 100 residents. The state saw a 5% drop from 2023, indicating a slight slowdown after years of rapid growth.
4. Montana – The Fastest Growth Among the Top 5
Montana stands out with 26,666 new business applications in 2024 and 2 businesses per 100 people. More notably, the state saw the biggest year-over-year increase among the top five, with a 13.40% jump compared to 2023.
5. Colorado – Holding Steady Despite a Decline
Colorado rounds out the top five with 2 new business applications per 100 people and a total of 130,086 business filings in 2024. However, the state experienced a 6.52% decline from the previous year, making it the hardest hit among the top states for business formation.
Why Does Wyoming Attract Entrepreneurs?
Wyoming continues to lead the nation in business applications per capita, and it’s not by chance. Entrepreneurs are drawn to the state for several key reasons, making it a top choice for new business formation.
1. No State Income Tax
One of the biggest advantages Wyoming offers is its lack of state income tax. This appeals to business owners looking to maximize their earnings while keeping operating costs low. Unlike states that impose high tax burdens, Wyoming allows entrepreneurs to reinvest more of their profits back into their businesses.
2. Low Filing Fees and Ongoing Costs
Wyoming has some of the lowest business registration and maintenance fees in the country. The cost to form an LLC is just $100, and the annual report fee is as low as $60. These affordable rates make Wyoming an attractive option, especially for small business owners and startups.
3. Strong Asset Protection Laws
Business owners looking for liability protection often choose Wyoming for its strong corporate and LLC laws. The state offers protections such as charging order exclusivity, which shields business assets from personal legal claims. This level of protection is particularly appealing to entrepreneurs who want to safeguard their businesses from lawsuits and creditors.
4. Privacy for Business Owners
Wyoming allows for anonymous LLC ownership, meaning business owners don’t have to publicly disclose their names. This added level of privacy is a major draw for entrepreneurs who value discretion in their financial and business dealings.
5. A Business-Friendly Regulatory Environment
Wyoming consistently ranks as one of the most business-friendly states in the country. The state government takes a hands-off approach, with fewer bureaucratic hurdles compared to other states. Entrepreneurs can form and operate businesses with minimal red tape, making the process fast and efficient.
These factors combined make Wyoming a top choice for business owners across the country. With low costs, strong legal protections, and favorable tax policies, it’s no surprise that more entrepreneurs continue to form businesses in the state each year.
Business Applications See a Slight Decline Nationwide
While some states continue to attract a high number of new businesses, overall business applications in the U.S. have dipped slightly in 2024. According to the U.S. Census Bureau, total filings are down 4.76% compared to last year. This marks a slowdown after several years of record-breaking business formation.
Several factors may be contributing to the decline. Economic uncertainty, rising interest rates, and shifting market conditions have made some entrepreneurs more cautious about starting new ventures. The surge in business applications seen in recent years, partly driven by the pandemic and remote work opportunities, appears to be leveling off.
The slight decrease in applications does not necessarily signal a downturn in entrepreneurship. Many businesses registered in previous years are still growing, and new startups continue to emerge in key industries. As economic conditions stabilize, business formation trends may shift again, influencing where and how new businesses are created in the years to come.
Sources
https://www.census.gov/econ/currentdata
https://www.census.gov/popclock
