Thinking of starting a business in Iowa, but not sure if it is the right thing for you? Well, Iowa is one of the best places in the USA to start and run a business. But that is not all; it is also the place where you can live there affordably, where the quality of life is high. As per the CNBN, Iowa was ranked as the ninth place in America for business in 2016. Since then, Iowa has grown into a business hub where many entrepreneurs now prefer to open their startups here.

This state offers the best for every business starting from the low-cost in doing business to the business-friendly environment. There are many reasons as to why people usually stay in Iowa and many have moved here too. Moreover, a lot of companies have been incorporated in the state due to the benefits that the state offers to these companies. Below shared are the main advantages that the state offers due to which many new companies tend to choose Iowa as their home.

The People of Iowa

Even though this doesn’t seem like an important reason, but people play a huge role in running a business. You need to hire people, make connections to other tasks your company cannot do and also need people as customers to buy what you are selling. The people of Iowa are what makes the state a great one.

In short, Iowa is filled with productive, well-educated and professional people who are well-known for their work ethics. This is also the reason why Iowa has the highest labor participation rate in the country. So, if you are planning to open your business in Iowa, you can be sure to get the best and most valuable employees that would help your company grow.

Lower Business Costs, Higher Profits

Other than the great and highly educated people in Iowa, the state is also known for boasting low operational costs for businesses. The professional business environment allures many businessmen into the state and convinces them to open their startup here. Moreover, if you are about to build your own office here, the construction costs are very low in Iowa.

And if you decide to rent a place, the office rent starts at $1 per square feet per month. The rent and construction costs usually depend on the area where you have chosen to open the business. But compared to the rental costs in other states like California or so, the costs in Iowa are the lowest. The costs also fall below the national average cost to rent a business space or to construct a business place.

Additionally, the other things that make Iowa a low-cost area to open a business are the low utility costs, the low compensation costs for the workers and the low payroll costs. All these parts make Iowa the perfect choice to open and run a business. Moreover, top leaders like Microsoft, Facebook and Google have invested a lot to expand their businesses in Iowa. If these companies can find Iowa great, your company can do excellent as well.

Location / Transportation

Sitting in the center of a seven-state market of nearly one million businesses and thirty-six million people, Iowa’s Midwest location offers a distinct advantage to businesses with both domestic and international markets and suppliers.

Iowa’s central geographic location and abundance of transportation options provide businesses with multiple distribution channels for their goods. Three interstate highways — I-35, I-80 and I-29 — pass through Iowa offering coast-to-coast, border-to-border access in the U.S. transportation grid. Iowa has nearly 4,000 miles of rail freight track operated by 18 railroad companies — five are major, national carriers. There are 60 barge terminals that ship and receive tonnage in Iowa — 55 on the Mississippi River and five on the Missouri River.

Iowa is a Right-To-Work State

As per the Section 14(b) of the Taft-Hartley Act in the country, the states have the rights to pass the Right to Work laws in their state. And the state of Iowa has enacted the Right to Work law. To explain it better, the right-to-work law allows the workers in Iowa to have the freedom of choice regarding whether they want to join a union in a workplace or not. This means that it is optional for the employees to pay any union dues or any other membership fees that might be needed for the union representation in the unionized workplaces, regardless of if they are in a union or not. This law is also known as workplace freedom or workplace choice.

Although this rule doesn’t directly help the company, it is a great thing about the state of Iowa. This is because employees would be happy to move from their state here due to such laws. And this means that you can easily hire the best talents from out of the state if needed. People would be easily ready to move into the state and work with your company.

No Personal Property Tax

Iowa does not have any personal property tax, which includes the properties like goods-in-process, raw materials, and inventories of finished goods. These properties are not taxed at all in the state of Iowa.

Workers’ Compensation

For the companies who worry a lot about paying huge amounts for the workers’ compensation, Iowa is the place for you. With an 11% lower cost of workers’ compensation as compared to the national average, you can both offer great benefits to the employees and pay less for it here. In short, the cost of running your business would be much less.

Tax Benefits in Iowa

Now that we know all the other reasons as to why Iowa is a great place to start a business, let us talk about the tax benefits. There are many tax advantages that also add to the reasons why Iowa is the right place for you to start a business. These tax benefits include:

Property Tax on Industrial Machinery and Equipment

Iowa doesn’t impose any equipment and machinery tax. Hence, you would not have to pay any taxes for the equipment you need to run your business in Iowa. This would help you save a lot and use the money for other things that would help in growing the company.

Iowa Corporate Income Tax

Other than the other tax benefits that the state of Iowa offers, there are many corporate tax benefits as well. The advantages that Iowa offers for the businesses as compared to the other states include:

From Iowa’s corporate income tax, 50% of federal taxes are deductible. The state enjoys a benefit of single factor apportionment. This means that the tax in Iowa is based entirely on the percentage of sales income within Iowa.The elimination or the reduction of Iowa corporate income tax by the New Jobs Tax Credit.

Sales and Utilization Tax on Machinery and Equipment

Another tax benefit that you can enjoy if you open a business in Iowa is the exemption from paying any sales and use taxes. This means that if you purchase any computers or industrial machinery, which are taken as real property and would be used in any industry such as the manufacturing industry, insurance companies, or the financial industry, you would not have to pay any sales and use taxes on it.

Workforce / Education 

Iowa has all of the key elements to provide a smart, productive workforce necessary to foster business growth. Not only does the K-12 public education system consistently lead the nation in graduation rates, students also place at the top of ACT and SAT tests. Lifelong learning is paramount in personal and professional growth. Iowa has a network of technical colleges, public and private colleges and universities to produce the workforce necessary to support Iowa’s employers. Workforce training programs are also readily available through our extensive community college network. 


In the end, from the above benefits listed about starting a business a Iowa, you now know how great-an-idea it would be if you decided to open your business there. All you need is a hit business idea that you know would work perfectly in Iowa, and some cash for opening your business. With these, you can easily start your business in Iowa and then grow it to earn a lot of profits.

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