| "Why should a business invest
Virginia state economic
development professionals who are responsible for the attraction of business
investment and providing site selection assistance to executives and their
consultants were invited in April 2006 to provide an informative article on
this simple topic.
We publish their
point of view here for convenient reference. This reflects their local
market knowledge, project experience, and selective facts about their state business environment
and the competitive business investment climate in their region as presented below.
Additional comments and
research suggestions follow their article.
Who to contact for business investment projects in
article below about the competitive site selection advantages for business
investment projects, and the support services provided as companies grow in
Virginia, is from :
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Virginians provide a vast array of services
and manufactured goods to customers throughout the world. Our manufacturing
base continues to be strong, producing everything from steel beams, wood
flooring and pickup trucks to semiconductors, robots and rocket engines. As
the birthplace of the Internet and one of the leading centers of software
development, Virginia's high-technology economy continues to expand. And as
one of four U.S. states currently licensed and capable of launching
communications satellites and other commercial payloads into space, Virginia
has all the right assets to continue our economic leadership throughout the
- More than 10,900
high-tech companies operate in Virginia.
- Nearly 60 firms with
annual revenue over $600 million are headquartered in Virginia.
- Virginia is headquarters
to 30 Fortune 1000 firms.
- More than 770
foreign-affiliated firms are located in the Commonwealth.
- Virginia ranks third
among the 50 states as a recipient of federal R&D funds and fourth in
federal R&D funds per dollar of gross state product.
- Virginia ranks ninth in
terms of venture capital investment, is among the top 15 fastest growing
states for venture capital investment and places within the top 10 states
for total venture dollars invested.
- Virginia exported $11.6
billion of merchandise in 2004.
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When you combine benefits such as streamlined
business regulations, fair corporate taxes and state-supported workforce
training and export assistance, you get one of the warmest business climates
in the world.
- Streamlined permitting
- Recruitment training
programs to help new businesses become operational faster
- Right-to-work law allows
individuals the right to work regardless of membership in a labor union or
- AAA bond rating
- 6 percent corporate
income tax rate has not been increased since 1972
- Programs at little or no
cost to help businesses increase international sales
- 32 publicly funded and
nonprofit small business incubators
- Norfolk and Richmond
placed within the Top 50 Entrepreneurial Cities in Visa’s most
recent Entrepreneurial Index.
- In terms of economic
vitality, Virginia ranks 5th in the Milken Institute’s 2004 National
State Technology and Science Index.
- In Governing
Magazine’s Government Performance Project, Grading the States
2005 survey, Virginia earned an overall grade of A- for management of
state government. This is a testament to Virginia's long-term planning and
management of money, people, infrastructure, and information. Among all 50
states, an A- was the highest grade earned, and was received by only
Virginia and Utah, with Virginia being the only state to earn A’s in every
- Chief Executive
Magazine ranked Virginia as the 7th Best State for Business in its
2006 CEO Confidence Index.
- In Forbes’
Special Report Best Metro Areas for Business and Careers,
WashingtonDC/Northern VA, Norfolk and Richmond were ranked in the top 15.
In addition, four other Virginia cities ranked within the Best Small Metro
Areas to jump-start a business or a career. Virginia and Texas were the
only states with more than one locale in the Top 20, citing our highly
educated labor force and relatively low business costs as factors
contributing to our remarkable rankings.
Consultants, other professionals
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- Virginia Ad
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Believe it or not, companies have improved their bottom
lines just by locating in Virginia. From soft costs like healthier, more
productive workers, to hard costs like cheaper, available and reliable
electricity, these companies have benefited from the combination of
resources that only a Virginia location can offer.
manufacturers have one of the lowest average workers’ compensation costs
in the country. At $2.20 per $100 of payroll in January 2005, it ranks 4th
nationally and is 47 percent lower than the U.S. average.
tax burden is more than 90 percent lower than the national average.
hourly manufacturing wages that are lower than the national average
construction costs in Virginia are 20-25 percent less than the national
- see our
- see US directory
Time and again, new businesses in Virginia comment about
how pleased they are with their hardworking labor force of Virginians. In
fact, Virginia facilities consistently earn productivity awards within their
organizations. As a result of better-than-average training and education,
combined with a vast diversity of skill sets, Virginia's workforce is one of
our greatest assets, and one of business's greatest advantages.
ranked in the top 10 in labor productivity.
- More than
430,000 students are enrolled in over 87 institutions of higher education.
- More than
20,000 doctoral scientists and engineers reside in Virginia.
- The Virginia
Community College System, through its 23 colleges, provides occupational
and technical training programs, many of which have been designed
specifically to meet the needs of nearby industries.
- Annually, an
estimated 17,000 highly trained, disciplined and motivated military
personnel separate from the military in Virginia.
personnel receive extensive trade skills in fast-paced, deadline-oriented
of Virginia High-Tech Employment in 2003
- 2nd in Computer Systems
- 4th in Engineering
- 5th in Total High-tech
Buildings, Business Parks
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Parks and Incubators
Technology parks directory
military base closures
Labor With Military Training Possess Valuable
- Quick learning curve
- Teamwork mentality
- Decision-making skills
- Performance under
and cost data
University-Based Economic Development Resources
The Commonwealth is home to many outstanding and
nationally ranked institutions of higher learning. Many of these
institutions actively support economic development collaborations with
industry, non-profit organizations, and government, and are one of
businesses' greatest advantages. They include:
- The College of William
- George Mason University
- James Madison University
- Longwood University
- Old Dominion University
- Radford University
- University of Mary
- University of Virginia
- Virginia Commonwealth
- Virginia Military
- Virginia Tech
The Commonwealth is home to many
internationally recognized research and development (R&D) facilities.
Federally funded R&D facilities, coupled with the research from Virginia
universities, provide Virginia businesses access to leading researchers and
cutting-edge technology. From the automotive industry to medical research to
the next generation of high technology, these research facilities have
something to offer your business.
- Virginia is home to 14
federal R&D facilities, including the new Homeland Security Institute in
Arlington, NASA Langley Research Center, NASA Wallops Flight Facility and
DOE’s Thomas Jefferson National Accelerator Facility
- Langley facilities
include the only wind tunnels in the United States capable of testing
structures in winds up to 17,500 miles per hour
- Wallops Flight Facility,
located on Virginia's Eastern Shore, is a unique research airport and is
NASA's principal center for management and implementation of suborbital
- Energy Efficiency and
Renewable Energy Clearinghouse provides publications, research in response
to your technical and business questions and referrals to energy
- Nine university research
parks offer private companies cooperative relationships with the following
universities and colleges: the University of Virginia, Virginia Tech,
Medical College of Virginia, The College of William and Mary, George Mason
University and Old Dominion University.
- The National Institute
of Aerospace in Hampton is a strategic partner of NASA Langley Research
Center and conducts leading-edge aerospace research and development
through a consortium of research universities including Virginia Tech,
University of Virginia, Old Dominion University, William and Mary, Georgia
Tech, University of Maryland and North Carolina State University.
Virginia offers a wealth of excellent power, water,
telecommunications and other business infrastructure resources necessary to
succeed in today's global economy.
provides a stable energy resource pool utilizing a variety of sources to
serve present and future residential, commercial, industrial and
electric rates are among the lowest in the nation—under the latest
deregulation legislation, the General Assembly capped the rates at the
current levels through 2010.
restructuring act gives residents and companies alike the option to choose
- In 2004, the
average cost per unit of electricity for the industrial sector was 4.04
cents in Virginia, compared to 5.02 cents for the nation.
- Virginia has
more than 50,000 miles of rivers and streams, with a combined total
freshwater flow of 25 billion gallons per day.
- More than
1,000,000 miles of fiber optic cable have been installed by local
Virginia offers unparalleled transportation opportunities
to get you anywhere in the world with ease. Centrally located on the U.S.
East Coast, our integrated transportation system of highways, railroads,
airports and seaports ensures that you can reach every one of your markets
and get shipments from suppliers more efficiently.
railroads operate on more than 3,600 miles of railway in Virginia, of
which over 3,100 miles are Class I. One of the nation's largest railroads
is headquartered in Norfolk, Virginia: Norfolk Southern Corporation.
commercial airports serve Virginia, including two of the nation's busiest:
Washington Dulles International and Ronald Reagan Washington National.
- The Port of
Virginia offers world-class shipping facilities and a schedule of over
5,100 sailings annually to over 250 ports in 100 foreign countries. The
Port offers one of the largest intermodal networks on the East Coast,
handled 1.98 million TEUs (Twenty-Foot Equivalent Units) in 2005, and
moved over 244,000 rail containers.
- The Virginia
Inland Port in Front Royal serves as an intermodal collection point for
containers from West Virginia, Ohio, Pennsylvania, Northern Virginia and
- The Port of
Richmond is a multi-modal freight and distribution center located on the
James River, adjacent to I-95, in Richmond.
- There are
more than 70,000 miles of interstate, primary and secondary roads,
including six major interstate routes: I-95, I-85, I-81, I-77, I-66 and
offers six foreign trade zones designed to encourage businesses to
participate in international trade by effectively eliminating or reducing
customs duties. Numerous subzones are designed to enhance the trade
capabilities of specific companies. Also, numerous subzones are provided
and additional ones can be designated to enhance the trade capabilities of
The regulatory environment in Virginia is one of the most
fair and least complicated of all U.S. states. On the other hand, the
process can seem daunting at times. The VEDP works diligently with our
allies in other state organizations to help make the permitting process
smooth and simple for new and expanding businesses. Listed below is an
outlined overview of potential regulations that may affect new businesses.
Most environmental regulations on business are under the stewardship of the
Department of Environmental Quality. Created in 1993, DEQ consolidated the
functions of four former agencies to streamline both the environmental
permitting process and communications with business, government and the
The Virginia DEQ has primacy over the U.S. Environmental
Protection Agency; as such, our permitting process is much quicker and
easier than when dealing directly with the federal government. Once a
satisfactory permit is forwarded to the DEQ, an expeditious turnaround is
likely to follow. This allows for little time lost to waiting for approval(s)
so that a company can proceed with its plans. Virginia administers its
environmental programs through the Department of Environmental Quality and
the Virginia Marine Resources Commission.
It is highly recommended that any business or industry
that is new to Virginia seek early guidance from the appropriate regulatory
agency before proceeding with modifying an existing facility or modifying a
process. This can be done directly, or with our help. Regardless, permits
must be obtained before construction or installation of equipment can begin.
The Virginia Marine Resources Commission is the primary point of contact for
joint local, state and federal applications for all wetlands and navigable
waterways permitting requirements. All localities in Virginia have erosion
and sediment control ordinances that establish soil conservation
requirements for land-distributing activities associated with new
construction. Information concerning these requirements may be obtained from
the local government or from the Virginia Department of Conservation and
Recreation's Division of Soil and Water Conservation.
The Virginia Department of Professional and Occupational Regulation issues
state licenses and regulates many businesses and occupations, including
architects, barbers, geologists, land surveyors, opticians and real estate
Some occupations require certification, such as plumbers,
electricians and building-related mechanical workers. The Virginia
Certification of Tradesmen Standards is a uniform statewide regulation that
ensures the competency of the certificate holders.
Producers of agricultural products, chemicals, and many
other goods and services are required to satisfy particular regulations or
obtain special permits.
Virginia Occupational Safety
and Health Program
Motor vehicle transporters of loads exceeding statutory size and weight
limits must obtain a hauling permit from the Virginia Department of
Transportation's permit and truck weight manager. The permit controls time
of travel, day, location, and the type of road used. It also controls load
overhang, maximum speeds, lights, warning signs, and flags.
Virginia has also adopted several unique state standards
to protect employers and employees. These include standards for the
construction and telecommunications industries concerning entry into
confined spaces such as manholes and tanks.
The confined space standards require employers to
establish a written permit entry system and to provide training, atmospheric
testing, mechanical ventilation, and personal protective equipment.
Building Code and
Construction of new buildings requires a building permit, which effectively
implements a number of local and statewide regulations. State building codes
require building construction to conform to the Uniform Statewide Building
Code, which is based on the Building Officials and Code Administrators
International, Inc. (BOCA), Code. The Uniform Statewide Building Code is
adopted by the Virginia Department of Housing and Community Development and
is enforced by the local building departments.
The Uniform Statewide Building Code, Volume II Building
Maintenance Code is based on the BOCA Property Maintenance Code. The USBC
regulations require compliance in all buildings to protect the occupants
from health and safety hazards that might arise from improper maintenance
Compliance is also required with the Virginia Statewide
Fire Prevention Code. It is intended to protect life and property from the
hazards of fire or explosion. Local enforcement of the Fire Prevention Code
is optional; the State Fire Marshall has enforcement authority in
jurisdictions where the local government does not so choose.
Clearance from the Virginia Department of Environmental
Quality is required before a local building permit may be issued to
construct a heating system, exhaust system, incinerator, or refuse chute.
Since the issuance of a clearance may require a public hearing, it is
advisable to contact the department early in the facility-planning process.
The Virginia health laws require authorization by the
Virginia Department of Health prior to issuance of a construction permit.
For wastewater discharging systems, this involves the issuance of a Virginia
Pollutant Discharge Elimination System (VPDES) construction approval by the
Department of Environmental Quality.
Manufactured buildings are governed by the Virginia
Industrialized Building Safety Regulations and Virginia Manufactured Home
Safety Regulations, which are administered by the Department of Housing and
Community Development. The regulations provide for the voluntary
participation of manufacturers in a state-approved labeling program for
manufactured buildings. Labeled buildings are accepted as meeting the
building code in all localities of the state. Local building officials
perform field enforcement of the regulations to ensure that installed
buildings comply with the code.
Virginia Certification of
In Virginia, trade licenses are required for plumbers, electricians, and
building-related mechanical workers. The Board for Contractors Tradesman
Licensure regulates the certification and standards of practice for
tradesmen. This statewide regulation uniformly gauges a worker's ability,
proficiency, and qualifications, and ensures the competency of licensed
Virginia's moderate corporate income tax has not been
raised in nearly thirty years. At 6 percent, our rate is one of the lowest
in the nation. The combined state and local sales tax is 5.0 percent.
Counties and cities are separate taxing entities. Consequently, companies
pay taxes to either a county or a city, not to both. In some instances towns
do assess local taxes which would be added to county taxes.
Virginia's long tradition of fiscal discipline has earned
the Commonwealth a coveted AAA bond rating.
Corporate Income Tax
- Tax rate of
6%, not raised in over thirty years
- Has a
three-factor apportionment formula of payroll, property and sales (with
double-weighted sales factor, which has the effect of reducing tax
liability for firms with significant sales to customers outside Virginia
- Tax credits
for job creation and investment in economically stressed areas
- No franchise
or net worth tax
Sales and Use Tax
- The total tax
is 5 percent (4 percent state and 1 percent local)
- A seller is
subject to a sales tax on gross receipts derived from retail sales or
leases of taxable tangible personal property.
do not pay tax on purchases used for production; distributors do not pay
tax on items purchased for resale.
Virginia works enthusiastically with new and expanding
Virginia employers that create a higher standard of living for Virginians,
enhance the local and state economies, and increase revenues to state and
local governments. Incentives are Virginia's investment in her economic
future and a business decision for both the Commonwealth and the company. As
a result, they must make good fiscal sense for all parties.
Designed to target the needs of the company and the
development plans of localities and the state, Virginia offers a variety of
performance-based incentives. From tax credits to tax exemptions, Virginia
continues to demonstrate her willingness to invest in those who invest and
reinvest in the Commonwealth.
Governor's Opportunity Fund
Discretionary funds available to the Governor to secure a business location
or expansion project for Virginia. Grants are awarded to localities on a
local matching basis with the expectation that the grant will result in a
favorable location decision for the Commonwealth.
A program that offers customized recruiting and training assistance to
companies that are creating new jobs or experiencing technological change.
The program is designed to reduce the human resource development cost of new
and expanding companies.
Partnership Grant Fund
A discretionary investment performance grant program for existing Virginia
manufacturers, research and development services supporting manufacturing
and large basic employers. The program is targeted to companies that have
operated in Virginia for at least five years and that are proposing
expansion projects that meet certain criteria.
Sales and Use Tax Exemptions
Virginia offers some of the broadest sales and use tax exemptions in the
Property Tax Exemptions
Virginia does not tax intangible property, manufacturers' inventory, and
manufacturers' furniture, fixtures and corporate aircraft.
Virginia Small Business
Financing Authority (VSBFA)
VSBFA offers programs to provide businesses with access to capital needed
for growth and expansion. The programs are as follows:
Development Bonds and the Umbrella Bond Program
Economic Development Loan Fund
- Loan Guaranty
- Child Day
Care Financing Program
Capital Access Program
Business Environmental Compliance Assistance Fund
Region Tobacco Capital Access Program
Virginia's Enterprise Zone program provides state and local incentives to
businesses that invest and create jobs within Virginia's enterprise zones,
which are located throughout the state.
Virginia authorizes its communities to establish technology zones to
encourage new technology business to develop. Presently, 16 localities have
created zones throughout the state.
Foreign Trade Zones
Virginia offers six foreign trade zones designed to encourage businesses to
participate in international trade by effectively eliminating or reducing
customs duties. Numerous subzones are designed to enhance the trade
capabilities of specific companies. Also, numerous subzones are provided and
additional ones can be designated to enhance the trade capabilities of
If you live in Virginia, you'll know why visitors spend
billions of dollars each year to enjoy our beautiful state. Boundless
outdoor and cultural activities and one of the nation's highest
concentrations of historic resources all combine to provide limitless
opportunities for recreation and relaxation. Add in Virginia's variety of
amusement parks and countless local attractions, and you and your family
will discover just how rewarding living in Virginia year-round can be.
ranked 5th in the nation in 2005 for being the most livable state, as
rated by Morgan Quitno Press.
- Virginia is
blessed with beautiful mountains, rivers and beaches and offers abundant
outdoor opportunities in 34 state parks, 33 natural areas and 30 national
highways and towns are filled with historic markers and attractions,
including those at Colonial Williamsburg, the Jamestown Settlement,
Yorktown National Battlefield Monument, Monticello, the National D-Day
Memorial and numerous Civil War sites.
enjoy a wide array of cultural activities, through institutions such as
the Virginia Museum of Fine Arts, the Chrysler Museum, the Virginia Opera
and the Barter Theatre.
- Virginia is
home to over 330 golf courses located throughout the state, many of which
are consistently ranked as some of the best in the country by Golf
Magazine and Golf Digest.
contribution to Virginia’s economy reached $15.2 billion in 2003, up 5.6%
Quitno's Health Care State Ranking 2005 ranks Virginia as the healthiest
state among South Atlantic states.
- Four Virginia
cities were named in Money Magazine’s 2005 list of best places to live in
the United States.
provided by :
Christie (Collins) Miller
Virginia Economic Development Partnership
Please let them know if you found this article to be
helpful, or if you have suggestions for improvement.
- Virginia news, press releases
- US Mid-Atlantic
directory of resources
to the above article : May 5, 2006. Requested April 18, 2006
||The above is
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This article was prepared by professionals who are responsible for the attraction of
business investment projects to the state, such as for new offices,
factories, distribution centers, etc. These articles are not edited to
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the assertions which they have made in the article, or make any warranty about such
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