Immigrant business owners make up 30% of all self-employed residents of Texas, according to the American Immigration Council, and in many major metropolitan areas, immigrants own a significant share of the businesses. The AIC notes that over 50% of all businesses in the Houston area are immigrant-owned, and in the Dallas-Fort Worth, San Antonio, and Austin-Round Rock metro areas, immigrants own at least 20% of all businesses.
These statistics only begin to show how Texas offers ample opportunities for immigrants to start their own businesses. With some tips below on licensing and permitting, state incentives, finances, and business associations and support available for entrepreneurs in Texas, it’s easy to start planning how to launch a new company in this state.
What businesses are popular for immigrants in Texas?
It may seem hard to choose a new business idea, but some types of businesses are especially popular in Texas. For example, more than 85% of manicurists and pedicurists are foreign-born workers, and some own their own nail salons.
According to the same data, immigrants account for more than 60% of the drywall installers, brickmasons, stonemasons, painters, and roofers working in Texas too. Individuals working in these fields are often self-employed, small business owners who hire teams to assist with projects.
Main street businesses are also popular ventures in Texas. The term refers to those brick-and-mortar businesses situated in the major shopping areas of cities and suburban areas. Examples of these businesses include laundromats, restaurants, dry cleaners, grocery stores, gas stations, liquor stores, and jewelry and clothing stores.
How to get new business incentives and financing in Texas
Anyone who wishes to open businesses in Texas can take advantage of incentive and financing programs to acquire capital to cover startup and operations costs. However, there are some specific programs for special types of businesses or business owners below.
Incentives for immigrant-owned businesses
Incentives and business grants for immigrants provide money to entrepreneurs to start or operate a business that doesn’t need to be repaid in the future. There are several incentive and grant programs in Texas that are open to immigrants.
The Texas Enterprise Fund or TEF offers business grants for all entrepreneurs. This program is open to businesses that are considering Texas and at least one other state as potential locations for a business. It is also a business that will create a significant number of jobs.
TEF grants are contingent on the new venture opening in Texas and meeting its projected job creation forecasts.
State and local governments work together to award grants and incentives through the Texas Enterprise Zone Program. The program establishes job creation zones within the state.
Immigrants who wish to open businesses in these areas may receive tax benefits or grants to help pay for some of their starting costs.
For immigrants looking for ways to fund their businesses beyond traditional loans and grants, the Alliance of Texas Angel Networks is a valuable resource.
The organization’s site allows business owners and entrepreneurs to search for angel investors who are looking to provide alternative financing for small businesses in different regions of the state.
The Texas Workforce Commission (TWC) provides Skills for Small Business grants for businesses with less than 100 employees.
With the money from one of these grants, business owners can pay for training and continuing education for both new and established full-time employees.
Financing for immigrant owned-businesses
Business loans for immigrants provide either a lump sum of money or a revolving credit account that is paid back over time. There are a few financing programs offered in Texas for potential entrepreneurs or current small business owners looking to expand to the state.
The Product Development and Small Business Incubator Fund (PDSBI) is available to existing businesses that wish to develop new products or expand manufacturing in the state.
Approved businesses receive lines of credit funded by bond sales that they can draw from to cover the costs of product development and production.
Founded with funds acquired from the federal government during the pandemic, the Texas Small Business Credit Initiative (TSBCI) is solely focused on providing business loans and lines of credit for small businesses in Texas.
Some of the available funds are set aside for businesses owned by marginalized groups, such as minorities and immigrants.
Community Development Financial Institutions (CDFIs) are nonprofit lenders who provide business loans.
Unlike for-profit lenders, these financial institutions tend to have more relaxed lending standards and lower rates of interest. Many also provide mentoring and business advice for entrepreneurs.
How to get business licenses, certificates, and permits in Texas
Before opening a business in Texas, entrepreneurs must acquire the appropriate licenses, certificates, and permits for their lines of business.
The Governor’s Small Business Handbook provides step-by-step instructions to help prospective business owners navigate the process.
Do you need a general business license in Texas?
Texas doesn’t require entrepreneurs to obtain a general business license to operate in Texas. Instead, those who wish to open a business must register with the Texas Secretary of State or the county clerk’s office in their counties.
Tips for getting a business registration
Before registering, new business owners must decide which type of business entity is right for their company.
Sole proprietorships, general partnerships, limited partnerships, limited liability partnerships, and limited liability companies are common choices for small businesses. Learn more about these different types of business entities in our article on how to pay taxes for your business type.
The registration process and the registration fees vary depending on which formation structure you choose. Hiring an attorney to assist with the process can help ensure that you have the necessary documents to avoid registration delays.
Partnerships, companies, and sole proprietors who wish to do business under another name in the state of Texas must apply for an assumed name certificate from the county clerk’s office. The certificate ensures transparency and allows consumers to know who owns the companies they do business with.
Once the assumed name certificate is issued, it remains in effect for 10 years. Businesses have the option to renew at the end of that period. Fees for filing an assumed name certificate vary from county to county.
Tax permits and registration
Most companies in Texas must register with the Texas Secretary of State or receive a tax permit to legally operate in the state. Immigrant entrepreneurs can contact the Comptroller of Public Accounts for specific advice regarding which tax permits they need and whether they must register.
Sales and use tax permits
Sales and use tax permits allow businesses to collect Texas sales and use tax from customers. State law requires individuals, partnerships, and corporations to obtain a permit and collect tax if they do one or more of the following:
- Sell personal property in Texas
- Rent or lease personal property in Texas
- Provide taxable services in Texas like laundry, cleaning, and security services
Some remote sellers and online marketplaces who sell to Texas residents must also obtain a Texas sales and use tax permit. The Texas Comptroller offers detailed information about this requirement on the agency’s website.
To protect the public, Texas requires professionals in many fields to obtain licenses before providing services in the state. Professionals who wish to establish businesses in a licensed field may need to be licensed themselves.
Examples of fields that require state licensing include:
- Certified public accountants
- Doctors and nurses
Certain types of businesses must obtain permits to legally operate in Texas.
- Child care facilities
- Dry cleaners
- Gas stations
- Liquor stores
The 2022 Texas Business Licenses and Permits Guide breaks down the necessary licenses, registrations, and permits needed in the state by industry for quick reference.
Other types of business support in Texas
Networking can help immigrant business owners gain referrals, find mentors, and receive advice from successful entrepreneurs in their local area.
In Texas, business owners may wish to consider joining one of the following types of groups. Online portals like CauseIQ can also help immigrant business owners find more organizations in their local areas to join.
Chambers of commerce
Chambers of commerce are organizations made up of business owners in a certain area that offer support like networking events, business development seminars, and workshops.
In addition, many chambers of commerce represent the rights and interests of business owners by lobbying state and local lawmakers. There are more than 500 chambers of commerce located throughout Texas.
Industry-specific business organizations or trade groups offer support and services related to a specific line of business. Texas is home to hundreds of these groups.
Immigrant business owners who join may receive access to industry news, networking events, and educational and business development opportunities.
Ethnic business organizations are open to individuals from a particular ethnic background.
In Texas, organizations include the Hispanic Chamber of Commerce Rio Grande Valley or the Houston Hispanic Chamber of Commerce. There are also industry-specific ethnic business organizations like the Asian Contractor Association in Austin and the Black Contractors Association of San Antonio.
Governor’s Small Business Resource Portal
The Governor’s Small Business Resource Portal is a search tool that allows you to find a variety of programs and services geared toward specific business needs, such as:
- Business advice and mentorship programs
- Growth assistance programs
- Federal grants, loans, and programs
- State grants, loans, and programs
- Traditional and nontraditional business funding services
To use the portal, visit the website and follow the prompts on the screen to answer five short questions. The search tool then uses your answers to generate a custom-tailored list of resources and programs that you may benefit from.
Using this portal as well as other business support systems throughout Texas can save you research time and help you discover opportunities within your professional field that you may not have learned about otherwise.