Why are Companies Choosing to do Business in Charlotte?
Charlotte, North Carolina has garnered a lot of attention over the last few years as a prime destination for companies to do business in, with the city appearing on the radar for many of our international clients.
As a state, North Carolina has grown to have the 8th highest revenue in the US staffing industry. Within PGC’s own internal data, we witnessed client activity in the state in terms of contractors placed skyrocket by 381% from 2021 to 2022. Therefore, we wanted to uncover more about the state’s most populous city and why it is gaining popularity.
We spoke with Alexis Gordon, International Business Manager for The City of Charlotte, and learned that there is a whole lot more to Charlotte than meets the eye. Keep reading to find out more about the quirky commerce city with an uptown rather than a downtown, and a name origin used to curry favour with royalty.
Growth of Charlotte and recovery post-pandemic
“I jokingly tell delegates and visitors that the crane is our city bird, because you see cranes in the skyline everywhere!”
Over the past decade, Charlotte, North Carolina has experienced significant growth and has emerged as a thriving economic hub. With its diverse economy, strong job market, and attractive quality of life, the city has become an increasingly popular destination for businesses and individuals alike.
When the pandemic hit in 2020, Charlotte, like many other cities, faced significant economic challenges. The shutdowns and restrictions imposed led to job losses, business closures, and a decline in tourism and travel. However, the city quickly adapted and implemented strategies to recover economically.
Charlotte's recovery has been supported by the city's efforts to diversify its economy further. The city has actively attracted new industries, particularly in the technology and clean energy sectors. These investments have created new job opportunities and fostered innovation, contributing to the city's overall economic recovery. The cranes that Alexis refers to reinforces the growth and innovation that is happening in Charlotte with continuing construction projects.
The population of Charlotte is just under 900,000, making it the 15th biggest city in the US. Charlotte's population is on an upward trajectory; the Queen City was the 5th fastest-growing US city in 2022. Moreover, at the time of writing, the city’s unemployment levels are at 3.5%, lower than the national average of 3.8%.
Why do business in Charlotte, North Carolina?
There are many reasons why companies decide to do business in Charlotte. Charlotte has a very business-friendly environment with a wide range of industries, and is strongly connected to other key cities on the eastern seaboard of the US.
Let’s break that sentence down to provide a bit more detail.
North Carolina is a business-friendly state
North Carolina is widely recognized as one of the most business-friendly states in the United States. The state's pro-business environment and strong economy make it a highly desirable destination for companies seeking to establish or grow their operations.
Some reasons why North Carolina is business-friendly include its low corporate tax rate of 2.5%, streamlined regulatory processes, and highly skilled workforce. The state also offers a variety of economic incentives to businesses, including job creation grants, tax credits for investment, and infrastructure development programs.
Charlotte has a diverse range of industries
Although Charlotte is first and foremost a financial city (it is the 2nd largest banking financial centre in the US after New York City), and home to the Bank of America headquarters, the economy of the city is not solely dependent on this huge industry.
The city’s tech scene is growing, particularly in fintech, whilst other industries such as life sciences, and manufacturing are prospering. We will discuss these specific industries in more depth shortly.
Charlotte is a very connected city to do business in
North Carolina’s geographical position means it has great connections to some of the biggest hubs in the US.
Charlotte is located in the southern part of the state and is directly at the border with South Carolina making it a gateway to the south-eastern part of the country. This is particularly appealing as the latest figures from the US Census Bureau demonstrate that between 2021-2022, 5 of the top 6 states for US state migration were all in the south-east of the country.
Charlotte offers close proximity to the fastest growing region of the US whilst remaining in striking distance of key hubs in the US. As a matter of fact, you can fly from Charlotte to one of New York, Boston, Chicago, Washington DC, or Miami, in around two hours making it an ideal location if you are looking to penetrate different locations across the eastern seaboard.
Main industries in Charlotte
Finance
Charlotte is regarded as a top financial hub in the United States, with over 90,000 people employed in the financial industry. The city is home to some of the largest names in banking and is a competitive hub for the booming fintech sector. Some notable companies operating in the finance sector in Charlotte include Bank of America, Wells Fargo, and Ally Financial. The city's financial services sector has been growing steadily, and it continues to be a key driver of economic growth in the region.
Tech
The tech industry in Charlotte, North Carolina has been experiencing significant growth in recent years. Often overshadowed by nearby tech hubs like Raleigh, Charlotte has been steadily establishing itself as a thriving tech ecosystem, driven by the financial sector’s increasing reliance on technology.
Several big companies in the tech sector have recognized the potential of Charlotte and have established a presence in the city. One notable example is Microsoft, which invested more than $20 million into the development of its regional headquarters in Charlotte.
Tech occupations in Charlotte increased by 3% in 2022 and are expected to increase by a further 3.1% in 2023, which translates into an additional 2700 jobs.
Medical and Life Sciences
Charlotte, North Carolina, has a rapidly growing medical and life sciences industry, with several big companies operating in this sector. The region is home to more than 200 life science companies, employing over 56,000 people.
This industry witnessed a 72% growth between 2010 and 2019, and looks set for continued growth after the recent development of the city’s Pearl District, a life sciences innovation district home to Charlotte’s first four-year medical school. In addition to this, the Pearl will also include medical office spaces, labs, retail, residential space, affordable housing, community gathering and academic spaces.
Manufacturing and Engineering
The manufacturing industry in Charlotte is a significant contributor to the region's economy, acting as the 3rd largest industry for employment. Some of the big companies operating in the manufacturing sector in Charlotte include Albemarle, a manufacturing facility involved in research, development, and full-scale manufacturing, and Duke Energy, which has significant operations in energy generation and distribution.
The city's manufacturing sector is diverse, covering industries such as automotive, aerospace, chemicals, and more. Charlotte’s ongoing population growth continues to feed the region with new talent. In our conversation, Alexis highlighted that employers in Charlotte are attracting workers from surrounding counties and even across the state border in South Carolina.
A strong pipeline of talent for this industry is also being generated by the University of North Carolina at Charlotte (UNC Charlotte), which has a highly regarded engineering school.
Cost of doing business in North Carolina vs New York
“We try to be really fiscally responsible as the city and as a state.”
Charlotte is more than a suitable alternative to New York for businesses in the financial sector so it’s only fair we offer a comparison of doing business in the states of North Carolina and New York.
When it comes to business tax rates, North Carolina is generally considered highly attractive compared to New York. According to the Tax Foundation, North Carolina ranks as the 14th best state for business tax climate, while New York ranks 49th. This is due to several factors, such as North Carolina's flat corporate tax rate of 2.5% compared to the state of New York rate, which ranges from 6.5% to 7.25%.
Speaking of that flat corporate tax rate of 2.5%, did you know that there are plans in place to completely abolish corporate tax in North Carolina by 2030? Moreover, personal income taxes are being phased lower to 3.99% by 2026.
Comparing office costs makes for delightful reading if you are choosing to do business in Charlotte over New York City. The cost of office space in The Big Apple is around $80 per square foot. The same space in Charlotte costs a fraction of the price; around $30.
In our conversation, Alexis commented how the state’s business incentives mostly revolve around taxes. This is seen with the state’s Business Investment Grants; a reimbursement of incremental ad valorem property taxes paid as a result of a company’s investment. These grants range from 50% to 90% reimbursement with term periods between 3 to 10 years.
Alexis makes the point that on first appearance, it may look like other states are going to offer more money as an incentive but in reality, they will be commanding higher tax rates after the initial incentives have ended.
Overall, the Charlotte region's business tax rates and incentives are some of the most attractive in the country. Charlotte offers a competitive tax structure and robust incentives that make it an ideal location for businesses looking for a business-friendly environment.
What is it like to live in Charlotte?
“Charlotte is a front porch city!”
Charlotte, North Carolina offers a high quality of life with its favourable climate, affordable cost of living, vibrant culture, and various amenities.
Experience all seasons in Charlotte
The climate in Charlotte is generally mild, with four distinct seasons. Summers are warm and humid, while winters are typically mild with occasional snowfall. The city's pleasant climate allows for outdoor activities year-round, including hiking and biking, allowing you to explore the numerous parks and green spaces.
Affordable cost of living
One of the biggest draws of Charlotte is its affordable cost of living compared to many other major cities in the United States. Housing costs, in particular, are relatively reasonable, with a range of options from apartments to single-family homes. The cost of groceries, transportation, and healthcare is also lower than the national average, making it an affordable place to live and raise a family.
Vibrant culture and communities
Charlotte's cultural scene is vibrant and diverse, offering a range of entertainment options. The city is home to various professional sports teams, including the NFL's Carolina Panthers and the NBA's Charlotte Hornets. Additionally, Charlotte hosts a variety of cultural events and festivals throughout the year.
Charlotte's strong sense of community and southern hospitality contribute to its quality of life. The city has a welcoming atmosphere and is known for its friendly residents. It also offers a wide range of neighbourhoods, each with its unique character and amenities, giving residents a variety of choices when deciding where to live. Alexis describes Charlotte as a “front porch city”, referring to the idea of sitting out on your front porch, enjoying the weather while your neighbours walk by.
A commutable city with reliable transportation
Transportation infrastructure in Charlotte is well-developed, with an extensive road network, public transportation options, and an international airport. Commuting within the city is relatively easy, with reliable public transportation services and bike-friendly roads.
Charlotte is the only city in North Carolina that has a light rail, and also a tram (what you’ll hear called a streetcar in Charlotte). Alexis comments that this helps keep traffic rates down and helps contribute to the high walking score many of Charlotte’s neighbourhoods have.
Strong UK connections
With an average of 266 days of sunshine and a thriving craft beer scene with over 70 breweries, the pieces are coming together as to why many of our UK recruitment agency clients choose to do business in Charlotte!
Interestingly, Charlotte’s link to the UK dates back to its time as British colony. To gain favour with royalty, the settlement was named after Charlotte of Mecklenburg-Strelitz who became Queen Consort of Great Britain after marrying King George III in 1761.
With all of these factors taken into consideration, it is not difficult to understand why more than 110 people per day are moving to the Charlotte region.
Universities in Charlotte
The quality universities in Charlotte, North Carolina, play a crucial role in developing a diverse, educated talent pool. These institutions provide a wide range of academic programs and opportunities for students to develop their skills and knowledge in various fields.
UNC Charlotte offers over 200 undergraduate and graduate degree programs, emphasizing STEM fields such as engineering, and computer science. Queens University focuses on providing a liberal arts education whilst Johnson & Wales University is known for its programs in culinary arts, hospitality management, and business.
The presence of these quality universities in Charlotte not only attracts talented students from across the country but also encourages graduates to remain in the area and contribute to the local workforce. The city's robust job market benefits from the diverse skill sets and expertise brought by these graduates. In our conversation, Alexis commented that the city has a high student retention rate. “The average age in Charlotte is 34 because we attract so many students and people stay”.
Ready to start doing business in Charlotte North Carolina?
“Whether you are a company bringing in thousands of jobs or a company bringing in five people, our team is here to help work with you.”
If you’ve decided that Charlotte is the right location for your business, reach out to Alexis Gordon from The City of Charlotte who can help set you in the right direction whether you want to find out more about anything from business incentives to real estate.
Additionally, if you’re ready to start hiring workers in North Carolina or elsewhere, PGC has got you covered to ensure you remain compliant with the state's different employment benefits and requirements.
Disclaimer: PGC does not endorse any personal views or opinions of the interviewee. All information here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.