In this page: FDI in Figures | What to consider if you invest in the United States | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
According to UNCTAD's World Investment Report 2023, FDI flows to the U.S. stood at USD 285 billion in 2022. Albeit a 26.5% decrease year-on-year (due to the halving of cross-border M&A values), the U.S. were still the biggest recipient of FDI worldwide. The decline in mergers and acquisitions directly influenced the equity portion of FDI, experiencing a 35% drop. Inflows notably decreased in the chemicals, computer and electronic products, and finance sectors. However, the information and communication industry maintained its status as the largest recipient, with a USD 51 billion influx, marking a 21% rise from 2021. For the year as a whole, a total of 2,075 greenfield investment announcements were made, the largest number globally. The U.S. FDI stock reached USD 10.46 trillion in 2022, around 41.1% of the country’s GDP. According to data from the U.S. International Trade Administration, the main investing countries in the U.S. are Japan (USD 721 billion), Canada (USD 607.2 billion), Germany (USD 498.6 billion), and the United Kingdom (USD 439 billion), with Europe as a whole accounting for USD 2.8 trillion. Foreign direct investment in the United States remains centred on the manufacturing sector, representing 42.4% of the total investment. Additionally, substantial investments are observed in finance and insurance (10.6%) as well as wholesale trade (9.7%). The latest data available from the OECD shows that in the first semester of 2023, FDI inflows to the U.S. totalled USD 189.5 billion, marking an 8.4% increase compared to the same period one year earlier.
Investing through FDI in the United States offers several advantages, including access to a large and diverse market, a stable political environment, advanced infrastructure, a skilled labour force, and robust legal protections for investors. Additionally, the U.S. has a culture of innovation and entrepreneurship, fostering opportunities for growth and development. However, there are also potential disadvantages to consider, including high operational costs, complex regulatory requirements, fierce competition, and potential cultural and communication challenges when operating in a diverse and dynamic market like the U.S. Additionally, political and policy changes can impact investment conditions and may introduce uncertainty for foreign investors. On 15 September 2022, President Joe Biden issued an Executive Order providing formal guidance to the Committee on Foreign Investment in the United States (CFIUS) on factors to be considered when conducting national security reviews of FDI. Executive Order 14083 “Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States” directs CFIUS to consider five specific factors: i) the transaction's effect on the resilience of critical U.S. supply chains; ii) the transaction's effect on U.S. technological leadership in specified industries; iii) investment trends that may have consequences for a given transaction's impact on national security; iv) cybersecurity risks; v) risks to U.S. persons' sensitive data.
The U.S. ranks 3rd among the 132 economies on the Global Innovation Index 2023, 25th out of 184 countries on the 2023 Index of Economic Freedom, and 24th in the latest Corruption Perception Index.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 95,882 | 387,780 | 285,057 |
FDI Stock (million USD) | 10,292,403 | 13,056,382 | 10,461,684 |
Number of Greenfield Investments* | 1,655 | 1,691 | 2,075 |
Value of Greenfield Investments (million USD) | 69,275 | 95,635 | 163,858 |
Source: UNCTAD, Latest data available.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Main Investing Countries | 2022, in % |
---|---|
Japan | 13.5 |
United Kingdom | 12.6 |
The Netherlands | 11.7 |
Canada | 11.2 |
Germany | 8.2 |
Luxembourg | 6.2 |
Switzerland | 5.8 |
France | 5.7 |
Ireland | 5.6 |
Main Invested Sectors | 2022, in % |
---|---|
Manufacturing | 42.4 |
Financial and insurance | 10.6 |
Wholesale trade | 9.7 |
Information | 5.3 |
Professional, scientific, and technical services | 4.3 |
Real estate | 4.2 |
Banking | 3.8 |
Source:
Bureau of Economic Analysis (BEA)
, Latest data available.
The United States' strong points include:
Weak points for FDI in the US:
Country Comparison For the Protection of Investors | United States | OECD | Germany |
---|---|---|---|
Index of Transaction Transparency* | 7.0 | 6.5 | 5.0 |
Index of Manager’s Responsibility** | 9.0 | 5.3 | 5.0 |
Index of Shareholders’ Power*** | 9.0 | 7.3 | 5.0 |
Source: The World Bank - Doing Business, Latest data available.
At a federal and state level, foreign investors may be granted funding allowances such as long-term subsidised loans. In order to encourage new businesses in their territories, the states have started a competitive battle aimed at offering investors the best services and advantages possible. The main types of programs in the United States are tax credit, grant, loan and tax exception.
Foreign companies can benefit from aid, granted by three federal agencies:
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Latest Update: November 2024