United States: Investing

FDI in Figures

After the FDI flows dropped in 2009 because of the financial crisis which weakened the global economy, they became strong again and should remain so in 2012. The United States remains the world’s number one destination for foreign investment. In fact, the country continues to offer a predictable and transparent juridical system, developed infrastructures and an access to the world’s most lucrative consumer market. Consequently, it remains the world’s primary economic power, holds the first place in international finance and is the third most populated country in the world.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	324,560	152,892	228,249
FDI Stock (million USD)	2,552,572	3,026,781	3,451,405
Performance Index*, Ranking on 141 Economies	99	118	-
Potential Index**, Ranking on 141 Economies	1	-	-
Number of Greenfield Investments***	970	1,220	-
FDI Inwards (in % of GFCF****)	12.8	7.6	-
FDI Stock (in % of GDP)	17.9	21.9	-

Source: UNCTAD - Last Available Data.

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. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2010, in %
UK	18.5
Japan	11.0
The Netherlands	9.3
Germany	9.1
Canada	8.8
Switzerland	8.2
France	7.9
Luxembourg	7.7

Main Invested Sectors	2010, in %
Manufacturing	31.9
Finance (except depository and insurance companies)	15.2
Wholesale trade	14.1
Chemical products	7.5
Information	6.7
Depository institutions	4.7

Source: Bureau of Economic Analysis, US Department of Commerce - Last Available Data.

Form of Company Preferred By Foreign Investors: The most common form of organization for foreign investors is a limited liability company.
Form of Establishment Preferred By Foreign Investors: Company
Sources of Statistics: U.S Bureau of Economic Analysis

Why You Should Choose to Invest in the United States

Strong Points: The American market has several advantages. With a population of more than 300 million people and the world's strongest economy, the United States represents the most important market in the world, irrespective of the sector. The American manpower is considered to have a high level of qualification and to be one of the most productive and most innovative in the world. The United States has developed strong regional "clusters", which are a collection of companies in the same activity sector in a zone. These centers are very attractive to foreign investors.
Weak Points: The country's weak points are a very competitive economy and a financial system that has been seriously affected by the financial crisis. The American economy is in grave difficulty. The subprime lending crisis has ended some major investment projects.
Government Measures to Motivate or Restrict FDI: The American policies on taxation and regulations provide foreign investors with a lot of management freedom. However, in the present security environment, foreign-government controlled investments are sometimes considered as a source of concern, more and more so since the tragic September 11^th events.

The American Ministry of External trade provides a Invest in America: Guide to Federal Incentives and Programs Available to Investors, which gives information, programs and appropriate federal agencies.

Protection of Foreign Investment

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.
International Controversies Registered By UNCTAD: USA has been involved in one case of disagreement concerning foreign investment. UNCTAD offers a database listing disagreements and the countries involved, complementary information about the evolution of settlement of international disputes concerning investment.
Organizations Offering Their Assistance in Case of Disagreement: ICCWBO , International court of arbitration, International chamber of commerce
ICSID , International Center for settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: USA has been a member since its creation.
The MIGA website gives a detailed description of all the guarantees it proposes.

Country Comparison For the Protection of Investors

	United States	OECD	Germany
Index of Transaction Transparency*	7.0	6.0	5.0
Index of Manager’s Responsibility**	9.0	5.2	5.0
Index of Shareholders’ Power***	9.0	6.8	5.0
Index of Investor Protection****	8.3	6.0	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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 (with a few exceptions).
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.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Regulation of land ownership is primarily an area of state concern.
The Possibility of Buying Land and Industrial and Commercial Buildings: Yes
Risk of Expropriation: In the United States, the right for the government to take private real or personal property predates the constitution and goes back to English Common Law. This right was implicitly recognized in the Fifth Amendment to the U.S. Constitution in 1791

Investment Aid

Forms of Aid: At a federal and State level, foreign investors may be granted funding allowances such as long-term subsidized 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.
Foreign companies can benefit from aid, granted by three federal agencies:
- The EDA (Economic Development Administration) offers long term loans, with preferential rates for projects of creation and of activity extension leading to new immobilizations and jobs creation.
- The Small business Administration (SBA) offers guarantees for loans contracted by SME and can finance plants construction or material purchase by mid and long term loans.
- The Rural Development (depending on the Ministry of Agriculture - USDA) can garantuee up to 90% of the loans granted to commercial companies that create jobs in rural zones.
Privileged Geographical Zones: Arizona has become the ideal base for companies that need to reach out to the world.
Free Zones: Arizona also offers a unique Foreign Trade Zone Program, which provides qualifying companies with the lowest effective property tax rates available in the US.

Investment Opportunities

The Key Sectors of the National Economy: Biotechnology
High Technology
Telecommunications
Aerospace
Real Estate
High Potential Sectors: Renewable energy.
Privatization Programs: The energy sector (privatization program being studied)
Tenders, Projects and Public Procurement: USA Export Import, USA Government Procurement
Tenders Info, Tenders in United States
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: The monopolistic sectors are: energy and Defense
Sectors in Decline: Investment in energy research and development in the U.S. is declining despite calls for an enhancement of the nation's capacity for innovation to address environmental, geopolitical, and macroeconomic concerns.

Finding Assistance For Further Information

Investment Aid Agency: EDA (Economic Development Administration)
Development (depending on the Department of Agriculture - USDA)
Other Useful Resources: United Nations Conference on Trade and Development
Doing Business Guides: International Trade Administration, invest in America

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