Why Big Companies Are Moving From Delaware To Texas

A Significant Shift in Corporate Headquarters

Coinbase has announced its decision to relocate its headquarters from Delaware to Texas. This move is notable as Delaware has long been the preferred state for business incorporations. However, Texas is increasingly becoming an attractive destination for companies.

Why the Move?

The primary reason for the shift is Texas's more business-friendly environment. Coinbase's legal chief highlighted that Delaware's courts are no longer as dependable as they once were. Additionally, Texas offers a balanced combination of efficiency, predictability, and fairness.

A Growing Trend

Coinbase is not alone in this transition. Other major companies, including Tesla and SpaceX, have also reincorporated in Texas. This trend gained momentum after Delaware's courts ruled against Elon Musk's pay package, prompting other businesses to reconsider their locations.

Texas's Efforts to Attract Businesses

Texas has been proactive in drawing companies to the state. New laws have been introduced to protect businesses from shareholder lawsuits and provide tax incentives. Governor Greg Abbott has played a key role in these efforts.

A Challenging Decision

Coinbase's CEO and legal chief stated that the decision was not made lightly but was deemed best for customers, employees, and shareholders. It's also important to note that both Coinbase and Andreessen Horowitz are currently facing a lawsuit in Delaware related to Coinbase's public listing in 2021.

The Impact on Delaware

This move is a significant setback for Delaware, traditionally known for its strong corporate governance. However, Coinbase's legal chief views the competition among states as beneficial, as it empowers businesses and innovators.