If you’re considering moving or investing in franchising in the United States, you’ve probably wondered: North Carolina or South Carolina? Although these two neighboring states share history and culture, there are key differences in cost of living, business opportunities, taxes, and quality of life.
For franchise investors, choosing the right state can influence the profitability and stability of the investment. This article takes a detailed look at each state’s advantages for residing and investing, providing up-to-date information for 2025 and helping you make an informed decision.
North Carolina vs. South Carolina: Main Differences
1. History and reasons for the separation
Originally, North Carolina and South Carolina were part of the same British colony, but in 1712 they were divided due to economic, administrative, and political differences. While North Carolina was characterized by a small-scale economy based on subsistence agriculture and manufacturing, South Carolina prospered with large plantations and strong international trade, which generated different development models.
Today, these historical differences continue to influence the culture, economy, and business opportunities in each state.
2. Economy and investment opportunities
North Carolina has a highly diversified economy, with key sectors in technology, research, education, biotechnology, and financial services. One of its main development hubs is Research Triangle Park (RTP), an innovation hub where large technology companies such as IBM, Cisco and Lenovo operate.
In addition, Charlotte is a major financial center in the U.S., home to major banks such as Bank of America and Wells Fargo, making it one of the best cities to start businesses related to financial services and consulting.
In contrast, South Carolina is more geared toward manufacturing, tourism, and agriculture. Global companies such as Boeing and BMW have established factories in the state, which has led to a high demand for labor in the automotive and aerospace sector.
In addition, tourism is a key economic driver thanks to destinations such as Myrtle Beach and Charleston, attracting millions of visitors annually. This tourism growth has boosted the profitability of franchises in the restaurant, hotel and entertainment sectors.
Where is it best to invest?
- If you’re looking for opportunities in technology, financial services, or education, North Carolina is the best option.
- If you prefer manufacturing, tourism, or traditional commerce, South Carolina offers better conditions.
3. Taxes and cost of living: Where is it most accessible to invest?
One of the main concerns of investors is the impact of the country’s taxes and the cost of living on the profitability of their business. Both of these factors can significantly influence a franchise’s profit margins, expandability, and long-term sustainability.
Cost of Living and Real Estate Accessibility
Generally speaking, South Carolina is more affordable than North Carolina, making it an attractive option for investors looking to reduce operating costs and maximize their profitability. According to data from BestPlaces, the cost of living in South Carolina is 11% lower than the national average, while in North Carolina it is 9% lower compared to the US average. This difference can represent considerable savings for those looking to set up franchises, especially in sectors where the profit margin depends largely on fixed costs.
One of the factors that most impact the cost of living is the price of housing and commercial real estate. Housing and commercial premises in South Carolina are more affordable compared to North Carolina, benefiting investors who want to acquire property instead of renting. This advantage can be key for franchises that require physical locations, such as restaurants, gyms, retail stores, or service centers.
In North Carolina, although the cost of living is still lower than the national average, cities like Charlotte and Raleigh have seen an increase in property values in recent years due to economic growth and the arrival of tech companies. This has led to an increase in real estate rental and purchase prices, which could affect a franchisee’s initial investment.
Income taxes
Income taxes are another determining factor for investors, as they affect both personal income and franchise profits. In North Carolina, the income tax rate is fixed and stands at 4.75%. This provides predictability for investors, as they know exactly how much they will have to pay on their income regardless of their level of profit.
In South Carolina, income tax is progressive, ranging from 0% to 6.5% depending on income level. This means that investors who generate less income may benefit from lower tax rates, while those with higher profits could pay a higher rate compared to North Carolina.
For franchisees, the choice between a flat tax or a progressive tax may depend on their revenue structure and growth projection. An investor who plans to expand their franchise quickly and generate higher revenues may find more benefits in North Carolina’s 4.75% stability, while a new entrepreneur with lower initial income could take advantage of the lower rates in South Carolina.
Real Estate Taxes and Investor Advantages
One of the most favorable aspects for investors in South Carolina is that it has one of the lowest property tax rates in the United States. This represents a significant advantage for those looking to buy commercial or residential real estate, as it reduces the annual expenditure on property taxesand increases the net return on investment.
By comparison, North Carolina has moderate property taxes, but they can represent an additional cost for investors looking to acquire real estate for their franchises. In growing cities like Charlotte and Raleigh, where real estate demand is high, property taxes can account for a sizable percentage of a franchise’s operating budget.
Since real estate represents a significant fixed cost in the operation of any business, investors looking to reduce expenses in the long term may find South Carolina a more favorable environment for the purchase of commercial and residential real estate.
4. Quality of life and education: Which state offers the best living conditions?
In terms of climate and geography, North Carolina has a greater diversity of landscapes, from mountains in the west to beaches in the east, which offers multiple options for those looking for variety in their lifestyle. In contrast, South Carolina has a warmer, more humid climate year-round, with mild winters and elevated temperatures in summer, making it easier to engage in outdoor activities year-round.
The education system also varies between states. North Carolina is home to highly regarded universities, such as Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University, which have been recognized for their academics and research programs. On the other hand, South Carolina has recognized institutions such as Clemson University and University of South Carolina, although in terms of quality and competitiveness, its educational system is less solid than North Carolina’s.
For those looking for access to top-notch education and increased job opportunities in high-skilled sectors, North Carolina is the best option. However, if the priority is a warmer climate and a more affordable cost of living, South Carolina offers an attractive alternative.
Where is it best to live?
If high-level education and access to tech companies are a priority, North Carolina is the best option. If you prefer a warm climate, lower cost of living, and lower property taxes, South Carolina is ideal.
5. How much money do you need to live comfortably in each state?
- North Carolina: It is estimated that a person needs between $55,000 and $65,000 annually to live comfortably, depending on the city.
- South Carolina: With an income of $50,000 to $60,000 per year, you can have a comfortable standard of living.
If you’re looking for more affordable living and downtime, South Carolina offers a better cost-benefit ratio.
So, where is it best to invest and live?
There is no right answer.
If you prioritize a strong economy, better job opportunities for your family, and a high-level education, North Carolina is the best option. If you’re looking for lower cost of living, lower taxes, and warm weather, South Carolina is more convenient.
For franchise investors, both options have advantages, but it is essential to analyze the local market, the demand of each sector and the tax conditions before making a decision.
Ready to invest in franchising in the U.S.? We help you choose the best option.
At Interlink FBC, we are experts in advising investors looking for the best franchises in the United States. Our team analyzes each opportunity based on your profile, helping you make the best decision.
Schedule a free initial consultation with our specialists and find out what is the ideal state for your franchise investment.
