Texas is emerging as the nation’s leading economic engine and corporate America is following its lead, with companies rethinking where they call home. Beyond attracting investments, creating jobs and encouraging long-term growth, Texas saw 10.1% increase in economic output per-capita from 2021 through 2024.
With the state’s thriving economy, the corporate exodus to Texas is no coincidence. Texas’s economy continues to outpace the national average and ranks No. 1 in job creation. In March alone, 26 new projects were announced in locations across Texas, which are expected to create more than $20.5 billion in capital investment and 1,241 new jobs.
Supported by its pro-growth policies that advance freedom for companies and consumers alike, Texas is opening a new frontier in its growth story: attracting companies’ legal incorporations and their headquarters.
Historically, a company’s decision to redomicile was viewed as a routine business decision. For a century, Delaware has held the corporate crown, being home to at least 60% of Fortune 500 companies. However, increasing opposition toward Delaware’s legal climate has spurred corporate interest in reincorporation, primarily in pursuit of a more predictable legal framework for doing business: enter Texas.
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Over the last five years, many well-known companies, such as SpaceX, Tesla, and Zion Oil & Gas, have decided to redomicile from Delaware to Texas – where they already have substantial assets and operations. Most recently, ExxonMobil announced its plans to redomicile from New Jersey to Texas, where it has its headquarters. In public statements to investors, these companies cite a shared motivation: the desire to unify legal jurisdiction and corporate assets in one place.
For companies like ExxonMobil, Texas makes sense – both logistically and operationally. State regulators have reformed the state’s corporate laws, offering legal and regulatory certainty for shareholders and management. Texas has also invested in its judicial infrastructure and established a specialized Texas Business Court to hear commercial cases, providing assurance to companies that complex disputes will be resolved by experienced judges.
Other companies have chosen to uproot their historic headquarters in favor of physical moves to Texas. Blue states, including California, New York, New Jersey and Illinois, are in the running for biggest losers when it comes to retaining corporate HQs, with Illinois surrendering companies such as Citadel and PEAK6 Investments to Florida and Texas, respectively, over the last five years.
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From 2018 to 2023, California experienced a net loss of eight Fortune 500 companies, seven of which relocated to Texas. In addition to Tesla, Chevron also recently announced its decision to move its headquarters from California, where it based its operations for nearly 150 years, to Texas. According to Chevron, the state already holds the majority of Chevron’s employees, and the company “expects all corporate functions to migrate to Houston over the next five years.”
A headquarters move is more than a symbolic gesture. Moving infrastructure and facilities implies relocating assets, employees and executives, and California has experienced a cumulative net loss in headquarters and headquarter jobs since 2011.
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New Jersey, New York and Illinois follow behind California, losing more companies than they gained over a five-year period. From Q1 of 2020 though Q1 2023, both California and New York lost nearly $1 trillion of assets under management due to company relocations. Meanwhile, Sun Belt states like Florida and Texas are emerging as the business and finance hubs of the future, driven primarily by business-friendly regulatory environments and lower costs of living.
Exxon’s redomiciling proposal shows how investment in physical infrastructure in a state can lead to a formal reincorporation in that same state. Once headquartered in New York City, Exxon relocated its corporate headquarters to Texas in 1989 and has spent decades consolidating its leadership, workforce, and research operations there, while expanding its upstream investments, including in the Permian Basin. And now, it is asking its shareholders to formally bless the company as a legally incorporated Texas business.
In our federalist system, it’s the norm for companies to “venue shop” for the optimal state to headquarter, employ workers, establish a legal domicile and raise capital. States compete with each other for different pieces of the puzzle. But Texas’s recent reforms show that it’s possible for a state to position itself as the full package.
Put simply, companies want to pick a winner. The Texas economy is booming, offering businesses a place to set up shop, hire talent, build factories, raise capital and build long-term investments. The state’s corporate law reforms and investments in judicial infrastructure have poised the state to capture new waves of businesses on the move.
