United States

Investing

FDI in figures

In 2004, total accumulated foreign direct investment (FDI) in the United States was USD1.5 trillion on a historical cost basis, or some USD2.7 trillion at today’s market value. This represents approximately 10% of the total current market value of all publicly traded firms. Total outlays to acquire or establish U.S. businesses were USD96 billion in 2004 alone. This includes both funding from foreign parents or from existing U.S. affiliates.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	135,826	101,025	175,394
FDI inward stock (millions USD)	n.c.	n.c.	1,789,087.0
Performance Index*, world ranking	120	118	117
Potential Index**, world ranking	1	1	n.c.
Number of Greenfield investments	597	561	723
FDI inwards (in % of GFCF)	6.2	4.9	6.8
FDI stock (in % of GDP)	n.c.	n.c.	13.5

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose the United States

Strong points

Faster economic growth compared to Europe or Japan.

The weakening of the dollar has improved the cost competitiveness of the US and lowers the entry cost for FDI.

Strong regional clusters e.g. automotive in South East, Software in Far West and Financial Services in Mid East.

Presence of large “home grown” multinationals in these clusters, that can influence FDI for sub supply, especially when awarding contracts

Weak points

The slowdown of overseas investment into USA reflects the overall movement in the global FDI market.

The US Economy is currently struggling and the sub primes crisis stepped down some of the FDI investors' projects.

Government measures to motivate or restrict FDI

As a place to do business, the United States offers a predictable and transparent legal system, low taxes, outstanding infrastructure, and access to the world’s most lucrative consumer market.

Formal international agreements on foreign direct investment are far less extensive than on international trade, despite the importance of FDI in the world economy. However, the 1990s have seen a substantial rise in the number of bilateral investment protection treaties, and regional and bilateral trade agreements in which investment disciplines figure prominently

The OECD has been an important actor in international discussions and agreements on FDI. OECD Code of Liberalization of Capital Movements forms the only multilateral framework in force on international FDI. Under the Code, countries bind themselves to agreed measures liberalizing capital movements.

In the current security context, investments controlled by foreign governments are sometimes viewed as a source of concern and these concerns have grown since the tragic events of 9-11.

Bilateral investment conventions signed by the United States

USA is a signatory to 46 conventions.
UNCTAD allows you to visualize the list of conventions signed by USA, and to download these conventions.

Administrative procedures relative to foreign investment

Freedom of establishment: Guaranteed
Acquisition of holdings: A majority holding interest in stock of a local company is legal in the US.
Obligation to declare: The reference text for foreign investments is the International Investment Survey Act of 1976. Each State has its own regulation aiming at or having an incidence on Foreign Direct Investments and of which the inspiration is more or less liberal.
Competent organization for the declaration: International Trade Administration
Requests for specific authorizations: Investments shall be governed by sector specific policies and procedures.