The 5 Top States to Do Business in the USA

If you’re planning to start a new business, expand operations, or relocate your company, one of the most critical decisions you’ll make is where to establish your presence. The state you choose can dramatically impact everything from your tax burden and access to skilled workers to your ability to secure capital and attract customers.

Choose wisely, and you’ll have infrastructure, workforce, and regulatory support that accelerates your growth. Choose poorly, and you might find yourself fighting uphill battles that competitors in other states don’t face.

So which states actually offer the best environments for business success as we speak? According to CNBC’s comprehensive 19th annual America’s Top States for Business study, which evaluated all 50 states on 135 metrics across 10 categories of competitiveness, five states stand out from the pack.

Let’s dive into what makes each of these states exceptional – and what challenges they still face.

The Methodology: What Makes a Top Business State?

Before we explore the winners, it’s worth understanding how these rankings are determined. To rank America’s Top States for Business in 2025, CNBC scored all 50 states on 135 metrics in 10 broad categories of competitiveness. The fundamentals of the study are consistent with its two-decade-old history, identifying the factors companies consider when making site selection decisions.

Each category is weighted based on how frequently states use them as a selling point in economic development marketing materials, with Economy being the most heavily weighted category.

New in 2025, CNBC added metrics to gauge states’ risks from a trade war and a shrinking federal budget, and enhanced Infrastructure metrics to determine how states are delivering on companies’ power and data demands.

The 10 primary categories are:

Economy (most heavily weighted)
Workforce
Infrastructure
Quality of Life
Cost of Doing Business
Technology & Innovation
Business Friendliness
Education
Access to Capital
Cost of Living

Now, let’s look at the top five states and what makes each one worth considering for your business.

#1 North Carolina: The Consistent Champion

North Carolina reclaimed the #1 spot in CNBC’s 2025 rankings for the third time in four years. The Tar Heel State captured top honors in 2022 and 2023, finished as runner-up in 2021 and 2024 (missing the top spot in 2024 by just three points to Virginia), and has now bounced back to reclaim its position as America’s premier business destination.

WHAT NORTH CAROLINA GETS RIGHT

Economic strength: North Carolina finished #3 in the all-important Economy category, behind only Florida and Texas. Since January 2025 alone, Governor Josh Stein announced more than $20 billion of investment producing more than 23,000 jobs.

World class workforce: The state ranks #4 in the Workforce category, reflecting strong talent pools and effective workforce development programs. North Carolina continues attracting skilled workers and maintaining programs that support business talent needs.

Business friendliness: North Carolina ranks #4 for Business Friendliness, creating a regulatory environment that welcomes companies. The state demonstrates remarkable bipartisan cooperation on business issues. As CNBC notes, “While no state is more politically divided than deep purple North Carolina, both parties seem to agree on the importance of keeping business happy.”

Major corporate investments: In June 2025, Amazon announced it would invest $10 billion to build new data centers in North Carolina, on top of the $12 billion the company has invested in the state since 2010. Aviation startup JetZero announced it will build its first factory in Greensboro, bringing 14,500 jobs to manufacture fuel-efficient airliners.

CHALLENGES IN NORTH CAROLINA

Quality of life concerns: North Carolina’s biggest weakness is quality of life, where it ranks #29 – its worst category. The state faces criticism for lack of worker protections, with Oxfam International ranking North Carolina dead last in its annual report on The Best and Worst States to Work in the U.S.

Hurricane recovery: North Carolina is still in early stages of recovery from Hurricane Helene, which killed 100 people and destroyed thousands of homes in the state alone, causing nearly $60 billion in damages.

Future risks: Potential Medicaid cuts could cause hundreds of thousands of state residents to lose health insurance, which could impact the state’s competitive position in future rankings.

THE VERDICT ON NORTH CAROLINA

North Carolina succeeds through bipartisan business cooperation, a world-class workforce, and strategic economic development. The state’s consistency at the top of these rankings – with an average rank of 1.4 over the past five years – demonstrates sustained excellence rather than one-time success.

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#2 Texas: The Workforce Leader

Texas jumped to #2 in 2025 from #3 in 2024, solidifying its position as one of America’s premier business destinations. The Lone Star State continues proving why it’s a magnet for companies and talent alike.

WHAT TEXAS GETS RIGHT

Skilled and productive workforce: Texas claims the top spot for workforce, with educated workers continuing to pour into the state from around the country. The influx of talent creates deep labor pools across industries and skill levels, giving businesses access to the human capital they need to grow.

Economic powerhouse: Texas ranks in the top 10 for Economy, reflecting robust growth, job creation, and diverse industry sectors.

No state income tax: Texas remains one of the few states with no personal income tax, making it attractive for both businesses and the employees they’re recruiting.

Technology and innovation: Texas scores well for technology advances, reflecting its emergence as a major tech hub, particularly in Austin, Dallas, and Houston.

Access to capital: The state ranks in the top 10 for access to funding, with robust venture capital and financing ecosystems supporting business growth.

CHALLENGES IN TEXAS

Quality of life: Texas ranks #49 for quality of life – second worst in the nation and just above NC – scoring poorly on healthcare access, uninsured rates, crime rates, and worker protections. This creates potential challenges for talent recruitment, particularly for professional workers prioritizing quality of life.

Infrastructure gaps: While Texas has improved, infrastructure remains a concern, particularly regarding power grid reliability that has made national headlines.

Rising costs: Rapid growth has driven up housing and living costs in major metros, potentially reducing the state’s traditional cost advantages.

THE VERDICT ON TEXAS

Texas offers an unmatched workforce, strong economy, and business-friendly environment with no state income tax. As site selection expert John Boyd told Newsweek, “Texas has a superior state business climate and has been a popular landing spot for companies and job creators exiting costly and difficult markets like New York City, San Francisco and Los Angeles.”

#3 Florida: Supercharging Economic Growth

Florida climbed to #3 in 2025 (up from #5 in 2024), demonstrating remarkable improvement after ranking #17 in 2021. The Sunshine State’s trajectory shows sustained economic momentum making it one of America’s fastest-rising business destinations.

WHAT FLORIDA GETS RIGHT

Best economy in the nation: For the third consecutive year, Florida’s ranked #1 in the Economy category. The state demonstrates solid economic growth, strong job creation, and a housing market that has performed well despite national headwinds.

No state income tax: Like Texas, Florida levies no personal income tax, providing significant advantages for both businesses and employees.

Demographic growth: Florida continues attracting new residents at a remarkable pace, creating expanding consumer markets and growing labor pools.

Strategic location: Florida’s position as a gateway to Latin America and the Caribbean provides unique advantages for companies engaged in international trade.

CHALLENGES IN FLORIDA

Cost of living pressures: Despite economic strength, Florida now ranks third highest in Cost of Living. The state’s strong growth and lingering insurance crisis are forcing up costs significantly.

Insurance crisis: Property and liability insurance costs have skyrocketed in Florida, creating significant cost burdens for businesses, particularly in coastal areas. This insurance crisis shows no signs of abating.

Infrastructure concerns: Florida’s infrastructure faces serious challenges, including climate risks and power grid issues that threaten long-term reliability.

Quality of life: Florida ranks poorly for quality of life, with concerns about healthcare access, environmental risks, and insurance affordability.

THE VERDICT ON FLORIDA

Florida offers the nation’s strongest economy, no income tax, and tremendous growth momentum. For businesses targeting Florida’s large and growing consumer market or seeking tax advantages, it remains highly attractive. However, rising costs, infrastructure reliability concerns, and insurance challenges require serious evaluation.

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#4 Virginia: Achieving Educational Excellence

Virginia slipped to #4 in 2025 from its #1 position in 2024, marking the state’s lowest ranking since 2018. The Old Dominion remains a business powerhouse but faces new challenges from federal policy shifts.

WHAT VIRGINIA GETS RIGHT

Superlative education: Virginia ranks first nationally for education, encompassing both K-12 and higher education. The state offers five historically Black colleges and universities (HBCUs) and has seen state support for higher education surge significantly in recent years.

Infrastructure excellence: Virginia ranks #2 for infrastructure, excelling particularly in “virtual infrastructure” through Northern Virginia’s massive data center presence. The state’s investments in infrastructure have been substantial and strategic.

Balanced Performance: Virginia maintains strong rankings across most categories, demonstrating consistency that few states can match.

Quality of life: Among the top five states, Virginia’s quality of life ranking stands out positively, performing significantly better than its competitors in this important category.

CHALLENGES IN VIRGINIA

Impact of federal job cuts: Virginia’s #4 ranking represents its lowest position since 2018, primarily due to new CNBC metrics measuring federal budget cut risks. Virginia’s economy is heavily dependent on federal employment, making it vulnerable to federal policy shifts. As Trump administration budget cuts loom, this dependence becomes a significant risk factor.

Workforce outmigration: Despite strong workforce rankings, Virginia faces concerning trends with slowing net migration of college-educated workers, creating potential talent shortages.

Cost of doing business: Virginia struggles with high costs of doing and staying in business, presenting challenges for budget-conscious companies.

THE VERDICT ON VIRGINIA

Virginia continues offering world-class education, superior infrastructure, and strong overall business conditions. The state’s six total #1 finishes since 2007 demonstrate long-term excellence. However, federal policy risks and workforce migration challenges represent legitimate concerns that businesses must weigh.

#5 Ohio: The Infrastructure Top Dog

Ohio joined the top five for the first time in CNBC’s 2025 rankings, earning the #5 spot and demonstrating that traditional industrial states can compete effectively in the modern economy.

WHAT OHIO GETS RIGHT

#1 in infrastructure: Ohio claims the top infrastructure ranking in America, a remarkable achievement reflecting the state’s strategic investments in transportation, utilities, and connectivity.

Strategic location: More than 142 million people live within a day’s drive of Ohio – more than any other state. This provides unmatched access to markets and makes Ohio ideal for distribution, logistics, and manufacturing operations serving national markets.

Diverse economy: Ohio successfully maintains diverse industry sectors including manufacturing, logistics, healthcare, and financial services, creating resilience against sector-specific downturns.

Competitive costs: Ohio offers more affordable costs of doing business and living compared to many competing states, making it attractive for cost-conscious businesses.

CHALLENGES IN OHIO

Workforce development: While Ohio’s infrastructure leads the nation, the state must continue investing in workforce development to compete with states like TX and NC for top talent.

Demographic trends: Ohio faces slower population growth compared to Sun Belt states, potentially limiting workforce expansion and consumer market growth.

Economic transition: As a traditional industrial state, Ohio is still continuing the transition to a more diversified, modern economy.

THE VERDICT ON OHIO

Ohio’s first-time appearance in the top 5 represents a significant achievement. The state’s infrastructure leadership and strategic location make it particularly attractive for businesses where logistics and market access are critical. Ohio proves that traditional industrial states can compete effectively by investing strategically in the infrastructure and business environment that companies need.

Pennsylvania: Strong Regional Contender

We simply can’t do a top state list without telling you about our very own Pennsylvania. While PA hasn’t cracked the top five in CNBC’s 2025 rankings, finishing at #17 overall (unchanged from 2024), the Keystone State deserves special attention – particularly for businesses considering the Mid-Atlantic region. PA offers several compelling advantages that make it worth evaluating alongside the national leaders.

PENNSYLVANIA’S RISING STRENGTHS

Tax Competitiveness: Pennsylvania continues on a path of lowering its top corporate tax rate to 4.99%, making it increasingly competitive with neighboring states and demonstrating commitment to business-friendly tax policy.

Strategic location: Pennsylvania’s geographic position provides unmatched access to major markets, sitting within a day’s drive of nearly 40% of the U.S. population and 60% of U.S. manufacturing capacity. This makes it ideal for distribution, logistics, and manufacturing operations.

Diverse economy: Pennsylvania maintains strong sectors including financial services (particularly in Philadelphia), healthcare, manufacturing, technology, and professional services, providing resilience and opportunities across multiple industries.

Education and workforce: Pennsylvania continues investing in education and workforce development programs, creating long pipelines of skilled personnel for businesses operating in the state.

CHALLENGES IN PENNSYLVANIA

Infrastructure needs: Pennsylvania’s infrastructure requires ongoing investment and modernization to remain competitive with top-tier states. Roads, bridges, and utilities surely warrant more attention.

Regional disparities: Pennsylvania faces economic disparities between its major metropolitan areas (Philadelphia, Pittsburgh) and rural regions, creating different business environments depending on location.

Competitive pressure: With Virginia at #4 and Ohio at #5, Pennsylvania faces strong regional competition from neighboring states that have achieved top-five status.

THE PENNSYLVANIA OPPORTUNITY

For businesses in the lending and financial services sector specifically, Pennsylvania offers several advantages. The state’s strong financial services presence in Philadelphia, combined with improving tax competitiveness and strategic location, creates an excellent environment for business lending companies.

Pennsylvania’s unchanged #17 ranking demonstrates stability, and the state’s continued tax policy improvements suggest a positive trajectory. The state particularly appeals to businesses seeking a Northeast presence without the premium costs of states like New York or Massachusetts, while maintaining access to major markets and boasting of a well-educated workforce.

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Common Threads Among Top States

Looking across these five top business states, several patterns emerge:

Workforce Excellence

Every top-five state prioritizes workforce quality, whether through education systems, training programs, or attracting talent from other states.

Infrastructure Investment

All five states recognize infrastructure as foundational to business success and continue investing strategically in transportation, utilities, digital infrastructure, and power reliability.

Business-friendly Approach

All five states cultivate reputations for regulatory approaches and tax policies that support rather than hinder business operations.

Economic Strength

Each top-five state demonstrates robust economic performance and policies, reflecting job creation, GDP growth, and sustainable business environments.

Strategic Location

Geography matters. Each top-five state offers strategic location advantages for different business needs – whether market access, logistics, or specific industry clusters.

The Critical Trade-Offs

No state is perfect, and the top five demonstrate important trade-offs that businesses must consider:

Quality of Life vs. Business Climate

Three of the top five states (Texas #49, North Carolina #29, Florida poorly ranked) struggle with quality of life metrics. While this may not directly impact business operations, it significantly affects talent recruitment and retention, particularly for professional workers with options.

Federal Policy Vulnerability

Virginia’s drop from #1 to #4 demonstrates how external factors beyond state control can impact competitiveness. Federal policy shifts can dramatically affect states with heavy federal employment presence.

Growth vs. Affordability

High-growth states like Florida and Texas are experiencing rising costs that erode traditional advantages. Florida now ranks third-highest for cost of living despite no income tax.

Worker Protection vs. Business Freedom

States with business-friendly regulations often rank poorly for worker protections, creating tension between attracting businesses and attracting workers.

Looking Ahead: Trends Shaping State Competitiveness

Several trends will likely influence state rankings in coming years:

Federal Policy Impact: The metrics measuring federal budget cut risks reflect how national policy shifts can dramatically affect state economies. States dependent on federal spending face new vulnerabilities.

Trade War Risks: The new metrics gauge states’ risks from potential trade wars, considering international trade importance and China dependence. States heavily dependent on international trade may face headwinds.

Power and Data Demands: Enhanced infrastructure metrics reflect growing importance of abundant, reliable power for data centers and manufacturing. States that can’t meet these demands will fall behind.

Climate Resilience: States must address climate risks or face declining business investment. Florida’s insurance crisis and North Carolina’s hurricane recovery demonstrate how climate events impact business competitiveness.

Workforce Migration: States successfully attracting skilled workers gain compounding advantages, while those experiencing outmigration face growing challenges.

Making Your State Selection Decision

The top states for business – North Carolina, Texas, Florida, Virginia, and Ohio – each offer compelling advantages for different business needs. Choosing where to locate or expand your business needs an in-depth assessment of the factors matter that most for your specific situation:

Technology Companies – Virginia’s data center infrastructure, education system, and workforce make it compelling despite higher costs and federal policy risks.

Manufacturing – North Carolina’s workforce, Ohio’s infrastructure and location, and Texas’s talent pools all offer distinct advantages depending on your supply chain and market needs.

Consumer-Focused Businesses – Florida’s population growth and strong economy create opportunities that may outweigh infrastructure and insurance concerns.

Logistics and Distribution – Ohio’s infrastructure leadership and strategic location (140+ million people within a day’s drive) provide unmatched advantages for companies where transportation is critical.

Cost-Conscious Businesses – Texas and Florida’s no-income-tax policies provide budget advantages, though you’ll need contingency plans for quality of life challenges in recruiting talent.

Mid-Atlantic Access – Pennsylvania offers regional advantages with improving tax competitiveness and strategic market access, particularly appealing for financial services and businesses serving the Northeast corridor.

Remember, rankings are starting points, not endings. Before making location decisions,

Identify critical factors that matter to you. Which ranking categories matter most for your specific business model and industry? A logistics company has different priorities than a software startup.
Visit the state/city and do your own research. Rankings can’t capture everything. Visit potential locations, talk to businesses already operating there, and understand the on-the-ground reality beyond statistics.
Run the numbers. Calculate actual costs for your business in each location, including taxes, labor costs, real estate, utilities, insurance, and financing availability.
Consider your people. Will you be able to attract and retain the talent you need? How do employees view quality of life factors? Can you recruit top talent to a state ranking #49 for quality of life?
Plan for the long term. Don’t just look at where states rank today. Consider trajectories and trends that will shape competitiveness over your planning horizon.
Evaluate external risks. Consider factors beyond state control – federal policy changes, trade policies, climate risks, and national economic trends that could impact your chosen location.

The best state for business isn’t the same for every business. It’s the state where your specific company can access the resources, talent, infrastructure, and market conditions needed to succeed. Use these rankings as a framework for investigation, but make your decision based on your unique business requirements and strategic objectives.

The right state choice won’t guarantee success, but it can certainly give you a tremendous head start. Choose wisely, and you’ll have the foundational advantages that let you focus on building your business rather than fighting your location.

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