The state government actively promotes a pro-business climate. Conservative traditions, low tax rates, low wage rates, a weak labor movement, and excellent access to eastern and overseas markets are the general incentives for companies to relocate into Virginia. Five duty-free foreign trade zones have been established in Virginia.
The Virginia Economic Development Corp. (VEDCORP), a privately financed and privately capitalized lending facility operating under special charter from the general assembly, extends low-interest loans to creditworthy companies to purchase land, buildings, and machinery if conventional financing is not available. The state also issues revenue bonds to finance industrial projects—a popular method of financing because the return to investors is tax-free. The bonds are issued for small as well as large companies and may be used to finance the installation of pollution control equipment. Localities allow total or partial tax exemptions for such equipment and for certified solar energy devices. The Virginia Small Business Financing Authority's loan guarantee program helps small companies obtain working capital by guaranteeing up to $150,000 of a bank loan.
Counties, cities, and incorporated towns may form local industrial development authorities to finance industrial projects and various other facilities, and may issue their own revenue bonds to cover the cost of land, buildings, machinery, and equipment. The authority's lease of the property normally includes an option to buy at a nominal price on the expiration of the lease. In addition, some 110 local development corporations have been organized. The Virginia Department of Housing and Community Development offers grants for projects which will generate employment in economically depressed areas, and the Virginia Coalfield Economic Development Authority extends loans to new or growing companies in southwestern Virginia. For minority-owned entrepreneurships, Virginia maintains the Office of Minority Business Enterprises to give advice on special problems. In 2003, the Governor announced new jobs and investments for Halifax County, and launched a Virginia Motorsports initiative. With Delaware, Maryland and Washington DC, Virginia has been recognized as part of an international life sciences hub, dubbed the BioCapital hub. In 2003, Virginia companies and agencies participated in bioscience "hotbed" campaigns, concerted efforts by groups made up of government development agencies, pharmaceutical and bioscience companies, research institutes, universities, and nonprofits to attract capital, personnel and resources to develop a life sciences cluster.