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Opportunities for Connecticut Business

Day Pitney attorneys have assisted our clients in obtaining financial benefits and incentives offered by the state of Connecticut, introducing companies to key Connecticut business networks and service providers and advising these companies on other matters of interest to Connecticut-based employers.

Financial Incentives: Connecticut offers an array of financial incentives to companies relocating into the state or contemplating a move out of state and to businesses seeking to expand their Connecticut-based activities. These incentives include tax breaks, subsidized loans and grants.

  • Angel Investor Tax Credit. Investors can receive an income tax credit equal to 25 percent (up to $250,000) of cash investments made in qualifying small or startup businesses. A minimum investment of $25,000 is required for an entity to qualify as an angel investor. 

  • Corporate Business Tax Credits. Companies that hire at least 10 new employees for a minimum of 12 months can receive a business income tax credit of up to 60 percent of the state income tax withheld from the employee’s wages. The state also offers a 5 percent tax credit for fixed capital investments in tangible personal property and, for companies with fewer than 250 employees, a 10 percent tax credit for investment in machinery and equipment.

  • Enterprise Zone Projects. Projects located within a designated Enterprise Zone, or within a community that contains such a zone, are eligible for a five-year tax abatement on real and personal property taxes and a 10-year tax credit tied to a business relocation, expansion or renovation project.

  • Financial Services Tax Credit. Financial services companies can receive substantial income tax credits, up to 50 percent in some cases, for building facilities and hiring new employees in Connecticut. 

  • CTNext has created the Entrepreneur Innovation Awards—grants of up to $10,000 available for an array of specified purposes. Applicants have to be members of CTNext and submit an application form, all as described on CTNext's website here.

  • Job Expansion Tax Credits. The state offers a tax credit of $500 per month for each new Connecticut resident employee and $900 per month in the case of certain workers.

  • Research and Development Tax Credits. Companies can be eligible for income tax credits up to 20 percent for research and development expenditures in Connecticut. Any unused research and development credits can be carried forward and, in some cases, sold to the state. See here and here.

  • The Small Business Express Program (EXP).
    Eligibility: Companies that have been operating in Connecticut for at least a year, are in good standing and have fewer than 100 employees are eligible.
    • EXP Revolving Loan Fund. Loans of up to $100,000 at a 4 percent interest rate for the purchase of machinery and other preapproved expenses.
    • EXP Job Creation Incentive Loan. Loans of up to $300,000 to small businesses for, among other things, training and marketing expenditures.
    • EXP Matching Grant Program. Up to $100,000 as a dollar-for-dollar matching grant to employers for expenses such as relocation costs, investment in equipment and construction, or leasehold improvements.
    • Urban and Industrial Sites Reinvestment Tax Credit. Connecticut offers an income tax credit of up to 100 percent for an investment of between $5 million and $100 million in a designated urban area or an industrial project.

The state has general discretion to provide outright grants to cover relocation, machinery, equipment and construction costs. In addition, loans are available at below-market rates, with the state also having discretion to convert the loan to a grant if certain minimum employment and investment thresholds are achieved. Cities and towns in Connecticut have the discretionary authority to provide financial incentives, real and personal property tax abatements the most important among them.

Networks: Connecticut is home to a number of business- and industry-specific associations and organizations. These groups provide valuable networking resources.

  • Association for Corporate Growth - Connecticut Chapter (ACG). The ACG is an association of corporate professionals involved in corporate growth and corporate development for midsize and large companies throughout Connecticut. The group holds monthly meetings with speakers and networking opportunities.

  • BEACON. A consortium of academic and private organizations developing medical technology, promoting collaborative research, and building bridges to other organizations interested in biomedical research and development.

  • Business Council of Fairfield County. The Business Council, formerly known as SACIA, is an association of businesses of all sizes located in Fairfield County. Like the CBIA, the Business Council hosts forums and events to create a more vibrant and commercially viable region. The Business Council has recently begun the Center for Growth Resources, to assist Stage 2 companies (10 to 99 employees) in finding state and private funding and in growing their businesses.

  • Connecticut Business & Industry Association (CBIA). The largest business organization in Connecticut, the CBIA represents companies of all sizes, hosts numerous forums and events across Connecticut, and lobbies the General Assembly on behalf of the state's business community.

  • Connecticut Technology Council (CTC). The CTC is a statewide association of technology-oriented companies. The CTC's mission is to promote innovation, growth and community among technology companies in Connecticut.

  • CONN/STEP: Non-profit organization helping Connecticut manufacturers apply advanced manufacturing and management techniques.

  • CTNext. A developing initiative to create a globally competitive environment for emerging technology companies and to assist Stage 2 companies (10 to 99 employees) grow in Connecticut. Formerly called "The Innovation Ecosystem", CTNext will create and link infrastructure to support innovation, company formation and growth through state-funded programs statewide, but focused in four major areas -- Stamford, New Haven, Hartford, and Storrs.

  • CURE. An education and business support network for the bioscience community in Connecticut, CURE works to build a vibrant bioscience industry in the state and to position Connecticut as a leader in the bioscience community.

  • Entrepreneurial Center, University of Hartford: The Entrepreneurial Center (EC) provides hands-on coaching and business training for new and expanding small businesses, as well as aspiring entrepreneurs in Connecticut and Western Massachusetts. Our cost-effective, high-quality services, offered to both women and men, enable businesses to compete and prosper.

  • MIT Enterprise Forum of Connecticut, Inc.: Not-for-profit organization helping entrepreneurs develop and refine business plans through monthly forums.

Early Stage Resources: Connecticut is home to numerous financing organizations for startup and young companies.

  • Angel Investor Forum (AIF). AIF is a group of Connecticut-based angel investors who pool their resources to invest in promising startup companies. This group makes investments primarily in the $500,000-to-$2-million range.

  • Connecticut Center for Advanced Technology (CCAT). CCAT is a nonprofit organization that offers a wide range of services to a diverse base of customers, including manufacturers, high-technology firms, small businesses and entrepreneurs, educators, and public policymakers.

  • Connecticut Economic Resource Center (CERC). CERC, a nonprofit corporation and public-private partnership, provides market research and economic development resources to Connecticut businesses.

  • Connecticut Innovations (CI). CI provides capital and other resources to companies in the energy, biotechnology, information technology and photonics fields.
    • Pre-Seed and Seed Funding. Up to $150,000 for pre-seed expenses (50 percent match from private sources required); up to $500,000 for seed funding.
    • Additional funds to make targeted investments in emerging high-technology, clean tech, and bioscience companies.

  • Crossroads Venture Group (CVG). CVG is a voluntary group that provides funding to high-growth companies in Connecticut. Unlike CI, CVG receives most of its funding through private individuals and corporate memberships.

  • Connecticut Department of Economic and Community Development (DECD): State agency charged with developing and growing Connecticut's economy. 

  • The IP Factory. The IP Factory is a nonprofit organization that finds investors and funds to exploit dormant intellectual property in Connecticut. Its goal is to encourage entrepreneurs to build businesses in Connecticut through the creation of new technologies. 
Other Connecticut Statutes of Note

Anti-Discrimination Statutes:

  • The Connecticut Fair Employment Practice Act prohibits employers with three or more employees from discriminating against job applicants and employees on the basis of race, color, religious creed, age, sex, marital status, national origin, ancestry, present or past history of a mental disorder, mental retardation, learning disability, and physical disability. This act also now prohibits employers from discriminating on the basis of "gender identity or expression," defined as a person's gender-relating identity or appearance, which might be at odds with such identity or appearance traditionally associated with the employee’s assigned sex at birth. In addition, the act now includes an employee's sexual orientation as a protected classification. Of significance, the act sets forth numerous protections for pregnant employees, making it an actionable discriminatory practice to take any of the enumerated actions based solely on the fact of the employee's pregnancy.
  • State law now protects a Connecticut employee from discrimination or any other adverse action by an employer because the employee is a family violence victim or attends any proceeding as a family violence victim. Similar protections exist for employees participating in proceedings as a crime victim. In addition, employers must allow an employee to take paid or unpaid leave to seek help in connection with being a family violence victim. 

Family and Medical Leave Act: 

  • Applies to Connecticut employers with 75 or more employees.
  • Entitles employees who have worked for an employer for at least 12 months and 1,000 hours in the preceding 12-month period to take up to 16 weeks of unpaid leave within any two-year period.
  • Leave may be used (i) for the birth of a child and to care for that child; (ii) in connection with the placement of a child for adoption or foster care; (iii) to care for a parent's, in-law's, spouse's or child's serious health condition; or (iv) because of an employee's own serious health condition.
Paid Sick Leave:
  • Nonmanufacturing employers with 50 or more employees are now required to provide paid sick leave to a service worker on account of that employee's sickness, a close relative's sickness, or issues of family violence or sexual assault.
  • Paid sick leave accrues on an hourly basis for hours worked and is available for up to a maximum of 40 hours per year. Covered employees must have worked at least 680 hours in order to obtain paid sick leave.
Required Sexual Harassment Training:
  • All Connecticut employers with 50 or more employees must provide at least two hours of training and education to all supervisory employees within six months of an employee’s becoming a supervisor.
  • The training must be conducted in a classroom-like setting and shall include a description of the laws against sexual harassment, definitions of sexual harassment and examples of conduct that might constitute sexual harassment.
Other Employment-Related Laws:
  • Connecticut has other employment-related laws and regulations, including those dealing with (i) the maintenance, use of, access to and disclosure of employees’ personnel files and medical records; (ii) drug testing; (iii) medical screenings of employees; (iv) weekly payment of wages; (v) payment of wages on termination of employment; and (vi) use of criminal records and electronic surveillance in the workplace.
Regulation of Franchises and Business Opportunities:
  • Connecticut has laws requiring franchisors to comply with certain disclosure and other mandated aspects of promoting and terminating franchises.
  • Connecticut's Business Opportunity Investment Act governs the offering and sale of so-called business opportunities in the state. The act covers a broad array of business activities being offered to investor/operators, and care should be taken not to overlook its stringent statutory provisions when contemplating the sale of business opportunities to state residents.
Connecticut's Transfer Act:
  • Under this act, any proposed sale or change in ownership of a property or operating facility in Connecticut might require certain filings with the state Department of Environmental Protection if "hazardous waste" had been generated at the site.
  • The act provides various levels of required filings with the Department of Environmental Protection, depending on the nature and scope of the release of hazardous materials at the site.
  • Failure of the transferor to comply with this act can result in the transferee becoming liable for all remediation and waste-removal costs.