During the Antebellum period, the Palmetto State’s economy was based almost entirely on the exportation of cotton and rice to Europe and by the onset of the Civil War, South Carolina (SC) was one of the wealthiest regions in North America.
Today, SC’s economy depends heavily on foreign investment. There is a heavy presence of global companies in the state such as BMW, Mercedes Benz and Volvo. At one point, South Carolina had the highest diversified foreign investment per capita in the United States.
While there are a lot of positives in South Carolina’s business environment, there are still some drawbacks such as the rising real estate costs, particularly in the coastal area which can make it difficult for entrepreneurs and small business (SMB) owners to upgrade to a larger space. And despite the increase in per capita personal income, it remains far lower than the national average of $59,642.
The state administration offers statutory incentives to cushion small businesses from the rising cost of living such as no state property tax, no local income tax and no sales tax on manufacturing machinery, industrial power or materials for finished products.
Below is a list of interesting statistics on South Carolina’s small businesses:
- There are 431,835 small businesses in South Carolina. They represent 99.4% of all businesses in the state.
- The median income for self-employed individuals who run their own incorporated businesses is $50,000. Those without incorporated businesses have a median income of $23,000.
- South Carolina SMBs employ a total of 817,008 people – 43.8% of the entire state labor force.
- The top five industries with the highest numbers of small businesses are:
- Other Services (except Public Administration) – 71,424.
- Professional, Scientific, and Technical Services – 50,231.
- Construction – 46,982.
- Real Estate and Rental and Leasing – 44,658.
- Administrative, Support, and Waste Management – 41,716.
- There are 5,661 small firms in the export business that generate 10.2% of South Carolina’s $31.1billion worth of export revenue.
- In order to form a corporation, you need to file your Articles of Incorporation with the South Carolina Secretary of State’s office. The filing fee is $110 when filing by mail and $125 when filing online.
- South Carolina’s corporate income tax has a flat rate of 5%. Personal income is taxed at marginal rates ranging from 0 to 7%.
- The state has a corporate license fee which is basically a franchise tax based on net worth. The fee is based on capital stock and paid-in or capital surplus, at a rate of $1.00 for every $1,000 or fraction thereof, plus a flat additional charge of $15.
- Small businesses generated 44,307 net jobs in 2019. Businesses with fewer than 20 employees added 25,011 net jobs while firms with 20-99 employees added 8,994 net jobs.
- State law requires that every new South Carolina LLC designates a South Carolina registered agent that will be available during regular business hours at a physical address within the state.
- In the fourth quarter of 2018, 4,548 businesses started up, creating 16,667 net jobs. During the same period, 3,262 businesses closed down resulting in 11,533 lost jobs.
- In 2018, while reporting under the Community Reinvestment Act, South Carolina banks issued 79,529 loans to small businesses, a total value of $1.3 billion.
- Private-sector employment in South Carolina decreased 13.6% during the 12-month period ending in April 2020.
- The top three industries with the largest share of small business employees are:
- Accommodation and Food Services – 144,632.
- Health Care and Social Assistance – 108,261.
- Retail Trade – 78,126.
- Out of over 430,000 small business owners, 57,623 are self-employed minorities.