🇺🇲 The Business Case for Staying

Big Business Likes to Complain About Overreach Here in the U.S., But Nowhere in the World is it More Hospitable to Build an Empire — Plus, Trade War Pause

Author

Katie Perry
May 13, 2025

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The Big Story: Why the U.S. is the Delaware of the World

It’s a beautiful afternoon in San Francisco. I’m out here with the Agree.com for the SaaStr Annual conference, which can only and best be described as the Super Bowl for software-as-a-service companies.

After getting the booth set up for tomorrow’s merriment, I joined Agree’s co-founders Marty and Will for a Fruity Pebbles flavored sour beer at a local brewery. We got to talking about big companies being HQ-ed in the Bay Area, and then, in the U.S. in general. Collectively, none of us knew the definitive answer for why established businesses decide to stay put in the U.S. versus moving to somewhere else — Switzerland, the UK, Australia, whatever. We each had plausible theories about taxes, regulation, government relationships, and the like … but what’s the big reason? Or is it a combination of all these factors?

Cloudflare HQ in San Francisco

I had a 90-minute window to catch up on email and recharge my social battery before team dinner, so I looked into it. Here’s what I found.

It’s no coincidence that the biggest, most established companies — especially publicly traded ones — tend to set up shop in the United States. It’s NOT because the U.S. is always the cheapest or the simplest. Rather, it’s because the U.S. offers a rare combination of legal, financial, and operational advantages that no other country matches. It’s not one single factor. It’s a powerful mix.

Start with capital markets. The U.S. is home to the largest and most liquid stock exchanges in the world. The NYSE and NASDAQ together make up over 45% of global stock market value. They offer deep pools of institutional investors, high trading volume, and higher average valuations. Even companies based outside the U.S. often choose to list here for better access to capital.

U.S. securities law is another draw. Regulations from the SEC — like those under the Sarbanes-Oxley Act — require transparency, regular reporting, and strong internal controls. While that creates more work for companies, it also builds trust with investors. And that trust translates into higher valuations and lower costs of capital. It’s one reason foreign companies like Alibaba and NIO list in the U.S. instead of in their home countries.

Legal structure is another reason companies stay. Over 65% of Fortune 500 companies are incorporated in Delaware, although some companies like Tesla and Dropbox have moved to places like Texas and Nevada. Delaware’s court system, especially the Court of Chancery, specializes in corporate law. Judges are experts, cases move quickly, and outcomes are predictable. The rest of the U.S. benefits from a similarly strong legal system — contracts are enforced, shareholder rights are protected, and corporate governance is clearly defined. Other countries, even stable democracies, don’t have anything quite like it.

Taxes used to be a major reason to consider leaving. But that changed after the 2017 Tax Cuts and Jobs Act, which cut the federal corporate tax rate from 35% to 21%. It also shifted the U.S. to a territorial system, meaning companies don’t pay full U.S. taxes on foreign earnings anymore. Other countries like Ireland still offer lower rates (12.5%), but the cost, complexity, and risk of moving often outweigh the savings.

The statutory corporate tax rate is the official tax rate set by law, while the effective corporate tax rate is the actual percentage a company pays after deductions, credits, and loopholes.

And then there’s the U.S. market itself. With nearly $20 trillion in annual consumer spending, it’s the biggest in the world. Companies that move risk losing government contracts, falling out of favor with American consumers, or drawing political backlash. Plus, moving means more than changing addresses. Companies have to follow foreign labor laws, pay new taxes, and comply with different financial regulations.

Agree poking the bear in the Bay

The U.S. also has unmatched access to talent. It’s home to the top universities, the deepest tech and finance talent pools, and the most experienced executives and advisors. Moving abroad would mean giving that up. It would also separate companies from the venture capital firms, banks, and consulting networks that support them. These are intangible advantages, but they’re real — and they compound over time.

That’s why companies almost never move once they’re established. Elon Musk moved Tesla’s operational HQ to Texas, but not out of the U.S. He didn’t relocate to Australia or Singapore. Those markets are too small. The Australian Securities Exchange (ASX), for example, has a total market cap of around $2.5 trillion, less than 10% the size of U.S. exchanges. Not to mention, Australia requires that at least one company director be a resident to incorporate there.

Some companies have tried moving. Burger King merged with Tim Hortons and moved to Canada. Medtronic acquired Covidien and moved to Ireland. But those cases were tied to large M&A deals and have become harder after the U.S. tightened rules on “corporate inversions” in 2016.

Even when companies consider other countries, they usually don’t leave. It’s not because they’re inherently patriotic. It’s because the U.S. still offers the most complete package for global business success. It has the world’s investors, the world’s courts, the world’s consumers, and the world’s playbook for corporate governance. The costs of leaving are high. The benefits of staying are compounding.

So, it’s not one reason. It’s a confluence of factors. And until another country matches the U.S. across capital, legal, tax, talent, and prestige, most big companies won’t go anywhere. The U.S. isn’t just where business gets done. It’s where business gets scaled.

Daily Rip Live: Show Me Your Moat! Markets Go Green on Positive Trade News, Making Sense of the Altcoin Landscape, and VC Trends

Catch us LIVE every weekday M-Th at 9 AM EST!

Every weekday, we run down the biggest market news and events LIVE on Stocktwits’ morning show, The Daily Rip Live. Here’s what we covered during Monday’s episode, which featured the always friendly and familiar Shay Baloor and our special guest, Nicky Montana, investor and founder of Spot, an altcoin trading app.

TL;DR: Stocks rose on Sunday news from Secretary Bessent that the U.S. and China had reached an interim trade deal, putting the ongoing drama on ice for at least 90 days. For its part, the Dow added 1,100 points and successfully exited correction territory (over 10% of all-time highs). Bitcoin spiked as high as $105K, before falling to $102K at the time of this publication.

Now Here’s a Chart

B2B banking tech company Ramp released new data that shows the specific pockets where vendor momentum is building — e.g. what are the main categories of “new vendors that customers are purchasing from for the first time?" The monthly read-out shows momentum among specialized AI vendors, in particular.

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Tuesday Thursday Saturday is written by Katie Perry, owner of Ursa Major Media, which provides fractional marketing services and strategy in software, tech, consumer products, professional services, and other industries. She is also the co-host of Stocktwits’ Daily Rip Live show.

Disclaimer: The contents here reflect recaps and summaries of pre-reported or published data, news, and trends. I have cited sources and context for the information provided to the best of my ability. The purpose of the newsletter is to inform and educate on larger trends shaping business and culture — this is NOT investment advice. As an investor, you should always do your own research before making any decisions about your money or your portfolio.