Reviewed by Joanne M. Farquharson · Last reviewed: September 21, 2026
This article is for general information only and does not constitute legal, tax, or HR advice. Consult a qualified professional for your situation.
One question decides this, and it is not about cities.
Does your US business plan depend on selling to the federal government? If yes, Northern Virginia is close to unavoidable, and there is an ownership problem you need to solve early. If no, Texas is cheaper, and the choice between Austin and San Antonio comes down to economics rather than law.
That last point is worth stating plainly. Austin and San Antonio sit in the same state, so the employment rules are identical. Anyone comparing them on employment law is comparing them on nothing.
Four questions to answer before you pick a city
Do you want federal contracts? Federal work concentrates in Virginia to an extent that has no parallel in other sectors. It also brings requirements that a British-owned company cannot meet by default.
Do you need cleared staff? Security clearances are sponsored, take months, and cannot simply be recruited for. Where cleared people already live is therefore a hard constraint, not a preference.
Are you selling to enterprises or to government? Commercial cyber buyers are spread across the country. Government buyers are not.
What can you afford to pay? Cleared talent in Northern Virginia commands a premium. Demand is structural, and supply is limited by process rather than by training.
Northern Virginia: where the federal money is, and the hardest to enter
Virginia’s position in US cybersecurity is not a marketing claim. More than 50% of total federal contract spending on cybersecurity services occurs in the state, according to the Virginia Economic Development Partnership, citing USASpending data.
The talent picture is equally concentrated. Virginia has the highest concentration of cybersecurity and technology talent on the East Coast, more than double the US average, with over 270,000 relevant occupations. Tech graduate numbers grew 47% over five years.
Two figures matter more than the rest for a UK company. Virginia holds the largest cleared workforce in the nation, and over 9,000 skilled workers leave the US military in Virginia every year. Those people arrive with clearances already in place.
The surrounding infrastructure reinforces it. Virginia data centres generated nearly $40 billion in economic activity in 2025 and support more than 112,000 jobs. That is from a Northern Virginia Technology Council report published in March 2026.
Washington DC ranked sixth in CBRE’s Scoring Tech Talent 2026 and sits among the four largest US clusters for AI-specialty talent.
Why clearances are a timeline problem, not a recruiting problem
A cleared hire cannot be solved by paying more, because the constraint is process rather than price.
DCSA publishes quarterly data on investigation timeliness. For the fastest 90% of industry cases in the first quarter of financial year 2026, Tier 3 investigations took 156 days, which covers Secret. Tier 5, covering Top Secret, took 227 days.
That is why hiring someone who already holds a clearance carries such a premium, and why Northern Virginia’s existing cleared population is its real asset. A UK company planning to sponsor Top Secret clearances from scratch should budget well over half a year before that person can start cleared work.
The ownership problem British companies hit
A UK-owned US subsidiary cannot simply apply for a facility security clearance and start bidding on classified work.
Under the Defense Counterintelligence and Security Agency’s rules, FOCI arises when a foreign interest holds power over a US company. That power need not be exercised. What matters is whether it could direct company matters in a way that risks unauthorised access to classified information.
A company in that position cannot initially qualify for a facility clearance. It may be granted one if the risk can be mitigated in conformity with the national interest, using one of several formal instruments. These run from a Board Resolution through a Security Control Agreement and Special Security Agreement to a Proxy Agreement or Voting Trust.
Each of those changes how much control a UK parent retains over its US business. A Voting Trust, at the most restrictive end, transfers ownership to trustees.
That is a board-level decision, and it needs taking before you sign a lease in Reston, not after. It also interacts with how you incorporate, which our US company registration guide covers.
Employment rules in Virginia
Virginia sets a statutory earnings floor for non-competes. For 2026 the threshold is $78,364.52 a year, equivalent to $1,507.01 weekly, according to Epstein Becker Green. The employee must also be exempt under the Fair Labor Standards Act.
That figure is low enough to catch a real part of a cyber team. Junior analysts and many SOC roles will sit below it, which means non-competes will not bind them.
Protecting client information in Virginia therefore relies on confidentiality and trade secret provisions instead. Our guide to hiring US talent while safeguarding IP assets covers the terms that carry the weight, and our state-by-state non-compete guide compares the thresholds.
Virginia’s minimum wage is $12.77 per hour and adjusts annually by formula, per the US Department of Labor.
Austin: commercial cyber, at a premium
Austin is the right answer for UK cyber companies selling to enterprises rather than agencies.
It ranked fifth in CBRE’s 2026 study, with more than half its tech talent working inside the tech industry itself. Software engineers make up 63% of that concentration.
For a product company that needs engineers who understand shipping software, that density is the attraction. Austin also has an established commercial security presence, and we covered it alongside other US cyber locations in our cyber-tech expansion hubs guide.
The cost is the same issue every sector faces in Austin. You are bidding for people against well-funded US companies, and a UK firm without local brand recognition pays a premium or loses the candidate. Our US salary benchmarking guide covers how to set a range that holds.
San Antonio: the cheapest route to serious cyber depth
San Antonio is the city UK companies overlook, and on a cost-per-capability basis it is arguably the strongest of the three.
The military cyber presence is substantial. The 16th Air Force, which is Air Forces Cyber, is headquartered on the Port San Antonio campus and oversees Air Force digital asset security worldwide. The 688th Cyberspace Wing operates there too.
Around 2,000 cyber professionals work on the Port San Antonio campus alone, according to Port San Antonio. The major contractors present include Accenture, Booz Allen Hamilton, CACI, General Dynamics Information Technology, Leidos, Northrop Grumman and Peraton.
Why the pipeline matters more than the headcount
The supply here is institutional rather than incidental. UTSA runs one of the country’s leading cybersecurity programmes at both undergraduate and graduate level, which means a steady local supply rather than a reliance on relocation.
Military separations add to it. People leaving cyber roles in the armed forces often stay in the city, arriving with operational experience that is difficult to hire for commercially.
San Antonio gives you access to people with defence-grade cyber experience without Northern Virginia salaries. The trade-off is a thinner commercial software scene, so it suits services and operations teams better than product engineering.
We covered San Antonio alongside other under-priced markets in our tech talent hotspots guide.
Employment rules in Texas, for both cities
Austin and San Antonio are governed identically. Texas has no state personal income tax and applies the federal minimum wage of $7.25.
There is no state pay transparency law, so adverts need not disclose salary. Non-competes are governed by case law rather than a statutory earnings threshold, unlike Virginia.
Employment is at-will, as explained in our at-will employment guide.
For a UK company, this means the Austin versus San Antonio decision is purely about talent, cost and customer proximity.
Vetting staff: what you can and cannot check
Cyber companies tend to assume US background screening works like the UK. It does not, and the rules vary by state and city.
Ban-the-box laws restrict when criminal history can be asked about, and some jurisdictions limit it entirely until after a conditional offer. Reference checking is also more constrained than most UK employers expect, because former employers often confirm only dates and job title.
Our guides to US background check requirements and what international employers can and cannot ask in reference checks cover the limits.
This matters more in cyber than in most sectors, because the instinct to vet heavily runs into rules designed to restrict exactly that.
Northern Virginia, Austin and San Antonio at a glance
| Northern Virginia | Austin | San Antonio | |
|---|---|---|---|
| Best for | Federal contracts and cleared work | Commercial product and engineering | Cyber operations and services at lower cost |
| Cleared talent | Largest cleared workforce in the US | Limited | Strong military pipeline |
| Federal cyber spend | Over 50% of national total | Low | Moderate, via contractors |
| Salary pressure | Highest, clearance premium | High | Lowest of the three |
| Non-compete threshold | $78,364.52 for 2026, FLSA exempt only | No statutory threshold | No statutory threshold |
| State minimum wage | $12.77 | $7.25 | $7.25 |
| State income tax | Yes | None | None |
Decide on the federal question first, then everything else follows
The mistake we see most often starts with a UK cyber company choosing a city on talent data alone. Eighteen months later it finds the contracts it wanted require an ownership structure its board will not accept.
Work in the other order. Decide whether federal business is part of the plan. If it is, get advice on FOCI mitigation before you commit to a location or a corporate structure, because the two decisions are linked.
If federal work is not the plan, Virginia’s premium buys you very little, and Texas is materially cheaper for the same commercial capability.
In either case you can hire before you incorporate. An Employer of Record lets you place a first commercial hire in any state while the structural questions are still being worked through. Our guide to how an Employer of Record works explains the mechanics, and the EOR versus own entity comparison covers when to switch.
Note that an EOR arrangement is not a route to holding a facility clearance. It is a way to build commercial presence and revenue while the cleared-work question is resolved separately.
Talk to us before you commit to a city
We help UK and European cybersecurity companies hire US staff without setting up an entity. We also advise on which state suits the roles being recruited.
Get in touch with our team to talk through your options.
Frequently Asked Questions
Get answers to all your questions and take the first step towards a US business expansion.
Northern Virginia suits companies pursuing federal contracts and needing cleared staff. Austin suits commercial product companies hiring engineers. San Antonio offers defence-grade cyber experience at the lowest cost of the three.
Not without mitigation. A company under Foreign Ownership, Control or Influence cannot initially qualify for a facility security clearance. It may be granted one using instruments such as a Special Security Agreement, Proxy Agreement or Voting Trust.
DCSA reported 156 days for Secret and 227 days for Top Secret in the first quarter of financial year 2026. Those figures cover the fastest 90% of industry cases. Hiring someone who already holds a clearance avoids that wait.
Only above the statutory threshold, which is $78,364.52 for 2026, and only for employees exempt under the Fair Labor Standards Act. Many junior analyst and SOC roles fall below it, so confidentiality terms carry the weight instead.
No. Both are in Texas, so the same rules apply on minimum wage, pay transparency and non-competes. The decision between them rests on talent mix, salary levels and proximity to your customers.
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