Silicon Valley is losing its appeal among technology companies, as evidenced by the march of the San Francisco Bay of giants of the sector such as Tesla, Oracle or HP. The golden age of what has been the global tech mecca of the last decades could be coming to an end, and there are several cities and states that choose to keep a piece of the succulent cake. The territory to which more IT companies have left is, at the moment, Texas, but the city of Miami, in Florida, has also presented its candidacy through its mayor, Francis Suarez.
The head of the Miami city council began to gain prominence in the technology sector at the end of 2020, when a San Francisco engineer suggested on Twitter that they should move their activity from Silicon Valley to Miami. Suarez replied “how can I help?”, Y your tweet it soon generated 2.3 million organic impressions, according to data from the US television network CNBC. From that moment, almost unwittingly, he unleashed a wave of tech interest in the city washed by the Atlantic that he has tried to capitalize on in the last five months.
Since then, Suarez has launched different proposals to attract companies and technology investment. Some, like the idea of paying public salaries and collecting taxes with cryptocurrencies, something extravagant, and others, like tax incentives and the promise of a higher quality of life, much firmer.
Suarez’s interest in attracting technology companies to Miami is not new, since he has been working on it for a decade, but in the last year he has found an unexpected ally: the coronavirus. The pandemic has changed the mindset of many Silicon Valley companies, which are increasingly in favor of telecommuting, which has also made it rethink the need for large offices in San Francisco, one of the most expensive cities in the world and that have spent a good part of 2020 empty, in a state that also has high tax burdens.
In this way, and spurred on by the sudden viralization of his tweet, Suarez has held meetings with executives of large technology companies in recent months so that they move their companies to the city.
Collect your salary in Bitcoins
One of the Suarez ads that has generated the most noise in recent months has been that he wants make Miami the Bitcoin capital of the world. For this, it intends to normalize the use of cryptocurrencies in the city and has proposed that officials have the option of collecting part of their salary in cryptocurrencies, and that taxes can also be paid with this type of currency. In February we already reported that the first draft of this initiative had been preliminarily approved by the local government commission.
And there is more. Suarez also wants part of the city’s funds are kept in Bitcoins, which has generated some controversy between the political forces of the city in the face of volatility and the lack of clear regulation of cryptocurrencies.
Beyond the visibility that this is generating, the truth is that the city has already begun to attract investment from companies in the sector. Thus, for example, the cryptocurrency company FTX reached an agreement in March with those responsible for the stadium of the city’s basketball team, the Miami Heats, to change its name to FTX Arena, according to the EFE Agency. Until the end of 2020 it had been called the American Airlines Arena.
Taxes are the real draw
However, beyond the fact that Bitcoin can become a common currency or the always attractive prospect of working by the sea, lSuarez’s real weapon to attract technology companies is the low corporate tax rate in the State of Florida. Low taxes to which we must add that the mayor has announced tax incentives for companies that settle in Miami.
And is that the combined corporate tax rate -state and federal- in Florida it is approximately 24.5%, while in California it is 28% and in New York it is just over 26%, according to the newspaper El Economista. In Texas, for its part, it is 21%, which explains why many technology companies have already packed their bags to the southern state. With the tax incentives announced by Suarez, Miami could get pretty close to the Texas numbers.
For the rest, Suarez also is trying to strengthen the technological ecosystem through the financing of startups in the sector based in Miami, for which it has created, through an agreement with SoftBank, an investment fund of 100 million dollars.
Many of these measures have been announced in the last five months, in which the mayor has also held meetings with representatives of a multitude of technology companies, according to several local media. Therefore, it is still too early to know if your proposal will hit the market in front of the Texan, which is more attractive from an economic point of view. Because the truth is that, to date, no major technology company has announced its intention to move offices to the city of Florida, and the noise generated is more than the concrete proposals.