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United States Inward Investing Guide

Location USA is a guide for international companies looking to invest or establish operations within the United States. Location USA provides practical advice and guidance about facilities deployment, labor force skills, taxes and incentives, and more. For specific information on all 50 states, utilize the State Resources links.

Expediting Foreign Direct Investment in the United States

The federal government has partnered with U.S. states, regions, and cities in welcoming business investment to America through SelectUSA.

Tazeem Pasha, Manager, Global Business Attraction , SelectUSA, U.S. Department of Commerce (Location USA 2012)

The United States reaffirms our open investment policy, a commitment to treat all investors in a fair and equitable manner under the law, and I encourage all countries to pursue such a policy. My administration is committed to ensuring that the United States continues to be the most attractive place for businesses to locate, invest, grow, and create jobs. We encourage and support business investment from sources both at home and abroad. - Barack Obama, President of the United States, June 2011

Businesses worldwide invest in the United States to access the world's largest, most innovative economy. With globally recognized educational institutions, growing industry clusters, first-class research and development centers, and access to global markets, the United States offers an unmatched opportunity for success.

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Figure 1: Economic activities of majority-owned U.S.affiliates of foreign companies, 2008 (click 'enlarge' to see full infographic)

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Figure 2: Strategic market and FTAs (click 'enlarge' to see full infographic)

With the creation of SelectUSA* as a White House initiative to promote business investment, the national focus on the growth of domestic and foreign direct investment (FDI) in the United States is unprecedented. SelectUSA can help firms looking to enter, expand, or return their operations to the U.S. market.

A Stable, Predictable Investment Climate
Even with global economic volatility in recent years, FDI in the United States has remained steady. More than $220 billion in FDI flowed into the United States in 2010, a 30 percent increase from 2009. Overall, the $2.3 trillion stock of FDI in the United States is equivalent to nearly 16 percent of U.S. GDP. And the United States consistently ranks among the top countries in the world in numerous confidence measures. Given the sheer size and diversity of the U.S. economy, its ability to offer a stable, predictable investment climate to domestic and international businesses is unparalleled. While 2011 is poised to see an overall decline in cross-border direct investments, firms that have or are planning to invest in the U.S. market continue to enjoy a stable economic climate.

The Best Workers in the World
The United States has always welcomed FDI because it contributes substantially to the U.S. economy (see Figure 1). Subsidiaries of foreign-owned firms directly employed over 5.2 million American workers in 2009, paying $408 billion in annual salaries and wages. Multinational firms value U.S. education and training and invest in specialized functions that lead to U.S. job creation in highly specialized sectors. They want the best workers in the world and are willing to pay a premium for American talent: nearly 40 percent of U.S. jobs created through FDI are in manufacturing, and U.S. employees of foreign-owned firms earn 25 percent higher wages than the average U.S. private-sector worker.

A Growing Share of R&D
Investors choose to conduct their valuable, proprietary activities in America because those activities are not viable without skilled and creative workers, innovative industry clusters, strong protections for intellectual property, and a predictable governance framework. The Battelle Memorial Institute tells us that 34 percent of all global research and development in 2010 took place in the United States, with almost half of the developed world's researchers working in the United States. According to research by the National Science Foundation, the U.S. Census Bureau, and the U.S. Bureau of Economic Analysis, foreign firms have a growing share of research and development investment in the United States. These firms recognize the hospitable climate the United States provides for their product development, innovation, and commercialization efforts. The United States provides a world-class framework for safeguarding and growing such investments.

Export Platform Opportunities
FDI's impact on the U.S. economy transcends its borders. In addition to introducing new capital, creating new jobs, and strengthening U.S. competitiveness, U.S. affiliates of foreign-owned firms accounted for almost 19 percent of total U.S. exports in 2009. In recent years, the steady rise in the proportion of U.S. exports originating from these firms is evidence that multinational companies locate in America not only to service the U.S. market but also to maximize the opportunities presented by its export platform. According to the Office of the U.S. Trade Representative (USTR), the United States more than doubles its market access through strategic trade agreements that connect its businesses with nearly 695 million consumers worldwide. With the recent approval of free trade agreements with Columbia, Panama, and South Korea, global access afforded to a company with U.S. operations is unprecedented (see Figure 2).

National Support
U.S. states, regions, and cities have a strong legacy of pursuing and winning business investment projects. With SelectUSA, their efforts are supported at the national level now more than ever. Just a week after creating SelectUSA, President Obama released a statement on America's unequivocal policy of openness to investment. For economic development organizations and firms, SelectUSA is a federal resource to provide research and information; identify federal, state, regional, and industry partnerships; respond to investment impediments involving federal rules and regulations; and advocate for U.S. economic competitiveness through global business investment. SelectUSA represents the entire nation and exercises strict geographic neutrality.

Cross-border investment is a pivotal component of U.S. economic competitiveness. With SelectUSA, the federal government is a partner to U.S. states, regions, and cities in welcoming business investment to America.

* Established by Executive Order of the President in June 2011, SelectUSA is a government-wide initiative to encourage, facilitate, and accelerate business investment in the United States by both domestic and foreign firms. SelectUSA can assist firms and economic development organizations that are engaged in business investment in the U.S. market. To learn more, visit www.SelectUSA.gov.

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About the Author

Tazeem Pasha, Manager, Global Business Attraction , SelectUSA, U.S. Department of Commerce
Tazeem Pasha serves as Manager, Global Business Attraction at SelectUSA. Established by Executive Order of the President, SelectUSA is a government-wide initiative to attract, retain and grow business investment in the United States by foreign and domestic firms. In this role, she is responsible for managing outreach to U.S. state, regional and local economic development agencies, foreign governments and investors to promote investment in the United States. Prior to joining the U.S. Department of Commerce, Ms. Pasha served as the Global Markets Investment Manager at the Ohio Department of Development. In this role, Ms. Pasha managed the FDI attraction efforts of Ohio’s overseas offices in Canada, China, Europe, Israel, India, Japan and Mexico. Her responsibilities included implementing a worldwide FDI attraction strategy that fosters growth in Ohio’s targeted industries, evaluating overseas companies that are poised to make investments in Ohio, and serving as their liaison to state agencies. She also served as the China and Europe market expert for the automotive and renewable energy manufacturing sectors. Previously, Ms. Pasha served as Special Assistant for Economic Development for Lt. Governor Lee Fisher. In this capacity, Tazeem coordinated economic development projects that required the Governor’s and Lt. Governor’s direct involvement and managed the Department’s initiative to create its Strategic Plan. Ms. Pasha holds a Master’s Degree in Business Administration (MBA) at the Fisher College of Business, The Ohio State University, and a Bachelor’s degree in Political Science and Economics from Wells College.

More articles by Tazeem Pasha

The United States: A Globally Competitive Business Location

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United States Inward Investment Location Profiles

ARIZONA

Arizona - A Great Place For Business

Arizona is one of the fastest-growing, most dynamic economies in the United States. Both Fortune 500 and start-up technology companies call Arizona home, reaping the advantages of a competitive business climate and tax structure; a skilled, knowledge based work force; and world-class innovation, cultural, and scenic resources.

ARKANSAS

Your Success Story Starts In Arkansas

Arkansas's transportation network and central U.S. location define the state as a strategic distribution center. Midway between Mexico City and Montreal, Arkansas offers a valuable distribution advantage.

Little Rock, Arkansas: A Globally Recognized Brand

For two years in a row, the Little Rock region has been named "America's Fourth Strongest Economy" by the Brookings Institution's MetroMonitor. The Wall Street Journal calls it the nation's "Sixth Best Real Estate Market," while Forbes says it is America's "Seventh Best Place for Jobs."

KANSAS

Wichita, Kansas USA - Site of Choice for Advanced Manufacturing Enterprises

Wichita, better known as the Air Capital of the World, has also been ranked #1 U.S. metro for aviation manufacturing. Wichita has the highest concentration of aircraft and aircraft parts manufacturing employment (skills) in the United States.

KENTUCKY

Kentucky Is a Global Business Center

Kentucky remains a leader in attracting foreign direct investment, with nearly 35 percent of announced new investment in 2012 due to FDI activity. Today, about 420 foreign-owned firms from 30 nations employ nearly 80,000 people in the state.

NEW YORK

Think New York for Business Opportunity

When you hear "New York" you probably think of tall buildings and Wall Street — not cows, pastures, and a state whose leading industry is agriculture. In fact, we have both, and the world is taking notice of the abundant milk supply, sophisticated transportation system, and oneday access to almost 100,000,000 consumers.

OHIO

The Columbus Region Grows Increasingly Global Each Year

The Columbus Region is a thriving 11-county area located in Central Ohio. Home to 15 Fortune 1000 headquarters, with two million people and a population growth rate of 1.3 percent annually, the Columbus Region is one of the fastestgrowing major metropolitan areas in the Midwest, and is growing more and more global each year.

The New Ohio — A Leader in New Job Creation

Profitable. Diverse. Motivated. Strategic. Global. These are the words that describe the new Ohio and make us a leader in new job creation in the U.S.

OKLAHOMA

Tulsa - Where Business Grows

Home to more than 950,000, Tulsa, Oklahoma, perfectly balances convenience and affordability with the advantages of a highly skilled work force, a central location, a pro-business atmosphere, and an excellent quality of life. It is a dynamic, growing region that offers the fifth-lowest cost for doing business in the nation and is home to some of the nation's largest companies. These assets combine to make an ideal home for progressive companies competing in a global economy.

TENNESSEE

Select Tennessee for Your Next Investment

Tennessee's ideal location, strong transportation infrastructure, low costs of doing business, and high quality work force provide an attractive setting for investments from around the globe. With most major U.S. markets within a day's drive, Tennessee provides immediate access to eight interstate highways, an extensive network of railways and waterways, and the world's second-busiest freight airport in Memphis.

WEST VIRGINIA

Plastics - West Virginia's Multi-Billion Dollar Industry

Offering one of the highest concentrations of hightech, specialty, and engineering polymer production in the world; an abundance of necessary raw materials; a knowledgeable, highly trained and productive work force; and established transportation systems; it is no wonder West Virginia is home to a vibrant and growing plastics industry.

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