ANNAPOLIS, Md. — Maryland has been ranked the second-worst state in the nation to start a business in 2026, according to a new study by personal-finance website WalletHub, a finding that adds new urgency to ongoing debates about the state’s business climate and economic competitiveness.
The report evaluated all 50 states across multiple factors tied to entrepreneurship, including access to financing, industry costs, labor market conditions and business environment metrics. Maryland landed in the 49th spot nationwide, ahead of only Rhode Island.
The ranking is grounded in WalletHub’s broader analysis of business friendliness, which measures indicators such as the ease of securing a business loan, corporate tax rates, regulatory burdens and the economic environment. According to the study, Maryland’s ranking reflects high operational costs, relatively heavy tax structures and regulatory complexity, which WalletHub identified as challenges for startups and small businesses looking to launch and grow in the state.
However, other aspects of the state’s economy remain strong, including a highly educated workforce and robust innovation sectors in biotech, cybersecurity and federal contracting. Maryland has also earned high marks in other measures, including support for minority-owned businesses and overall innovation rankings, underscoring that the state’s strengths in some areas do not always translate into favorable startup conditions.
The WalletHub findings come at a time when state leaders are wrestling with a projected budget deficit and efforts to bolster Maryland’s economic competitiveness. Lawmakers and the governor’s office have pressed for initiatives to attract investment, streamline permitting and support growth in strategic industries, but the new ranking has renewed calls from some business groups and advocates for policy changes to make Maryland a more welcoming environment for entrepreneurs.
The Maryland Chamber of Commerce will be presenting Maryland’s 2026 business outlook on Feb. 26 at the Westin in Annapolis. In the meantime, lawmakers and stakeholders alike are likely to debate how best to balance competitiveness with the state’s policy priorities, with the WalletHub ranking adding fresh data to those discussions.
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