Buy a Business in Texas: A Guide for Foreign Investors

To buy a business in Texas as a foreign investor, you define criteria and budget, find and screen operating companies, verify them through due diligence, negotiate price and structure, and close through an attorney and escrow. Texas has no state personal income tax, but most entities owe the franchise (margin) tax, and licenses are set by industry and city.

TealBridge is based in Dallas, Texas, and works on the buyer side only. This page explains what is specific about buying in Texas; the general sequence is in our guide on how to buy a business in the U.S..

Why do foreign investors buy a business in Texas?

Texas combines a large, growing population with a relatively light tax burden and a broad base of small service businesses. For an investor who plans to live in the state, the absence of a state personal income tax matters, and the cost of living outside the central parts of Austin and Dallas is still moderate compared with the coasts.

The market is also deep. Texas has several of the largest metro areas in the country, which means more operating businesses to choose from and more buyers competing for good ones. A business for sale in Texas with clean books and a stable team often attracts several offers, so preparation and speed matter.

What should you know about buying a business in Houston, Dallas, San Antonio or Austin?

Each metro has its own character, and the right city depends on the business type and where your family wants to live.

• Houston: the largest metro in the state, with an economy tied to energy, the port, health care and a large international population. Home services, construction trades, logistics and B2B services are well represented.
• Dallas-Fort Worth: a corporate and logistics hub with many headquarters and fast suburban growth (Plano, Frisco, McKinney). Cleaning, facility services, franchises and B2B companies are common acquisition targets. TealBridge is based here.
• San Antonio: lower costs, military and health care employers, and steady demand for local services. Prices for comparable businesses are often lower than in Austin.
• Austin: a technology and university economy with high growth and higher rents. Service businesses serving new households can do well, but valuations and lease costs tend to be higher.

Suburban growth corridors around these cities often offer better value than city centers, because demand for home and business services follows new housing.

How do you form a company in Texas and what does it cost?

Most buyers acquire through a new Texas LLC or corporation formed for the deal. Entities are registered with the Texas Secretary of State, which charges a filing fee for the certificate of formation; fees change, so check the official site before filing. The entity then obtains an EIN from the IRS, opens a U.S. bank account and registers for the taxes that apply.

In an asset purchase, the new entity buys the assets and the seller keeps the old company and its liabilities. In a stock or membership interest purchase, you take over the existing entity with its history. The trade-offs are covered in our guide to asset vs stock purchase.

What taxes does a business in Texas pay?

The franchise tax is administered by the Texas Comptroller, and thresholds and rates are updated periodically. Your CPA should model the tax position of the specific deal.

One Texas point matters at closing: a buyer can become liable for the seller’s unpaid state taxes, such as sales tax, unless the seller provides evidence from the Comptroller that those taxes are paid. A tax clearance request belongs on the closing checklist.

Which licenses and permits will you need in Texas?

There is no general state business license. Requirements depend on the activity: alcohol permits through the Texas Alcoholic Beverage Commission, state licensing for certain trades such as HVAC and electrical work, health permits for food businesses, and child care licensing. Cities and counties add their own certificates of occupancy, signage and health permits.

Licenses often do not transfer automatically in a sale, so we confirm early which ones the new owner must obtain in their own name. Texas also allows private employers to opt out of workers’ compensation insurance, which a buyer should check, because a non-subscriber business carries a different liability risk.

Which businesses suit Texas for an E-⁠2 investor?

The E-2 visa requires a real, operating business that is not marginal, with the investor in control. In Texas, businesses that often fit include:

• Commercial and residential cleaning companies with recurring contracts.
• Construction and renovation firms and specialty trades such as HVAC.
• Franchise resales with an established location and staff.
• Logistics and B2B services around Houston and Dallas-Fort Worth.

Whatever the type, the business should support more than a minimal living for your family and ideally employ U.S. workers. See how we screen businesses for E-⁠2 requirements.

How does TealBridge help you buy a business in Texas?

We act for the buyer only. Our business search defines criteria with you, sources candidates from brokers, marketplaces and off-market owners in Texas, and screens them before you spend money. Our due diligence rebuilds the P&L from three years of bank statements and reviews operations, team, customers and liabilities.

We then support price and structure negotiations, coordinate closing with your attorney, CPA and escrow agent, and prepare the handoff documents for your immigration attorney. Because our team is in Dallas, we can visit sites and meet sellers in person.

Next step

If you are considering a business in Houston, Dallas, San Antonio, Austin or elsewhere in Texas, contact us for a first consultation. We will review your budget and goals and give you a fixed quote for the buyer-side work.