Regulatory Climate Index 2014: Dallas

Regulatory Climate 2014

Dallas’s history marks it as perhaps one of the more resourceful cities in the United States. Dallas grew due to its proximity to and development of major transportation networks. First, railroad lines in the late 1800s shipped oil and cotton across the country from Dallas. Then the city’s economy expanded further with the creation of the national interstate system. The city and region worked to create a major inland port at the Dallas/Fort Worth International Airport—now one of the busiest airports in the world.

Dallas’s diverse economy is a mix of financial services, computer technology, energy, research and development–intensive industries, and transportation sectors, among others. In 2012, Dallas’s economy produced $420 billion in gross metropolitan product. Dallas’s metro area is home to 6.7 million people, with 1.2 million within the city limits. The region has a dozen four-year universities and a half-dozen community college districts. The city is home to 18 Fortune 500 companies and 12 of Forbes top private companies. The city has 148 companies ranked in the Inc. 5000 fastest-growing private companies. Dallas’s vibrant business and cultural communities make it one of the most rapidly growing cities in the country.

Benchmarking Against Others

Among the cities under review, the 2014 Regulatory Climate Index ranks Dallas in first position, representing the most efficient regulatory environment.

Dallas ranks at the top across all areas of business regulation of the cities covered in this report. The city performs evenly across all five areas of business regulation and the measures of procedures, time, and cost.

What Dallas is Doing Well

  • Dallas is the best-ranked city for business in Paying Taxes. Dallas is one of two cities with a total tax burden under $200,000 annually, based on the assumptions used in our analysis. Dallas and other cities in Texas have no corporate income tax and low employment tax, a factor that significantly reduces the tax burden on entrepreneurs and small businesses.
  • Dallas performs near the top for Dealing with Construction Permits. The city achieves the best performance for costs of permits and high marks for procedures and time. These data reflect a streamlined permitting and licensing process that is expedited as businesses apply and attain construction permits.
  • Dallas is also a top performer in the area of Registering Property. There are no real estate transfer taxes at the state and local levels, which significantly lowers the transactional costs for small businesses.

Where Dallas Needs Improvement

  • Dallas, despite its ranking as the top city in business regulation, does not fare well in Starting a Business when benchmarked against the other cities in this report. Dallas’s performance is outside the top-performing city in terms of waiting time and costs of licenses for starting a professional service LLC.
  • Dallas is strong across all areas of business regulation covered in the report. The city’s lowest performance is fifth in Enforcing Contracts. Dallas is given a value of 77 out of 100 to enforce contracts. While this number may look satisfactory in absolute value, it falls short in the context of and comparison with other cities. Four cities—St. Louis, Chicago, Boston, and Atlanta—achieved higher scores. Dallas’s position in the ranking is largely driven by the number of procedures for Enforcing Contracts in comparison with the other cities.

City Initiatives

The city of Dallas and its business community, institutions of higher education, and community organizations are collaborating to make the city one of the most dynamic 21st-century economies in the world. Dallas has a big advantage over other cities due to its lack of state and local income taxes. Using this advantage, the Dallas Regional Chamber has developed an innovation initiative to increase technology jobs and capital investment in the city.

The Dallas Regional Chamber and the business community are working with local universities to create regional research alliances, supporting start-up incubators and accelerators, and hosting networking events for entrepreneurs. The Dallas Regional Chamber has helped launch the Dallas Entrepreneur Center to aid high-growth start-up companies. Other programs include the Texas Research Alliance, which works with local universities to connect research institutions with industry in the energy, life sciences, technology, and telecom sectors.

Dallas has also seen a wave of venture capital and new sources of start-up funding emerge in recent years—a promising sign for the future. The city’s venture capital network is led by the established firms of Trailblazer Capital and Silver Creek Ventures. The business community has helped launch VentureSpur—a seed accelerator that will provide funding options for launching technology start-ups. Other newly launched firms include tech-focused Dallas Venture Partners; Remeditex Ventures, which invests in life sciences; and ORIX Technology and Infrastructure Fund, which focuses on tech companies and infrastructure projects in Texas and surrounding states. This growth in financing and access to capital is yet another reason why Dallas is committed to being a top place to do business and is well equipped for the 21st-century economy.

Conclusion

Dallas is the best-ranked city on the Regulatory Climate Index thanks to its efficient local regulations. Entrepreneurs and small businesses can expect a welcoming business environment across all five areas of local regulation. Dallas scores above average across each meaningful measure of an interaction that a business has with a local government agency through procedure, time, and cost. These rankings reflect the city’s continuing efforts to develop programs and initiatives to strengthen the business environment, provide access to capital, and encourage economic growth at the local level. 

See the attached PDF below for more detailed charts and graphs relating to Dallas and the 2014 Regulatory Climate Index 

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