Impacts of Foreign Direct Investment in the U.S. Economy

• Foreign Direct Investment Creates New Jobs: U.S. affiliates of foreign companies (majority owned) employ more than 5 million U.S. workers, or 4.4 percent of private industry employment. An additional 4.6 million U.S. jobs indirectly depend on foreign investment in the United States. Between 2002 and 2006, nearly 2,900 new projects were announced or opened by foreign companies, yielding $82 billion in investment and about 170,000 new jobs.
  
  
• Foreign Direct Investment Boosts Wages: U.S. affiliates of foreign companies tend to pay higher wages than U.S. companies. Foreign companies support an annual U.S. payroll of $335.9 billion, with average annual compensation per employee of more than $65,000. Average compensation per employee within these companies has risen every year since 1992. U.S. subsidiaries of foreign firms pay 32 percent higher compensation than the private-sector national average.
  
  
• Foreign Direct Investment Helps U.S. Companies Penetrate International Markets and Increase U.S. Exports: U.S. companies can use multinationals’ distribution networks and knowledge about foreign tastes to export into new markets. Approximately 19 percent of all U.S. exports ($169.2 billion) are generated by U.S. subsidiaries of foreign companies.
  
  
• Foreign Direct Investment Strengthens U.S. Manufacturing: 33 percent of the jobs related to U.S. affiliates of foreign companies are in the manufacturing sector, a sector which accounts for just 12 percent of overall private sector employment.
  
  
• Foreign Direct Investment Brings in New Research, Technology, and Skills: Affiliates of foreign companies spent more than $31 billion on research and development in 2005 and $121 billion on plants and equipment.
  
  
• Foreign Direct Investment Contributes to Rising U.S. Productivity: The increased investment and competition from inward investment leads to higher productivity growth, a key ingredient that increases U.S. competitiveness abroad and raises living standards at home.
  
  
• Foreign Direct Investment Contributes to U.S. Tax Revenues: In 2003, foreign affiliates paid $19.1 billion in taxes, which represented 11 percent of U.S. corporate tax revenues.
  
  

Source: U.S. Department of Commerce - International Trade Administration (http://www.investamerica.gov.)

Additional Information:

Invest in America’s NEW policy paper on “Asian-Pacific Foreign Direct Investment in the United States” was published yesterday, August 24, 2009.  This paper looks at Asian-Pacific FDI flows in-depth, examining historical inward FDI flows from the region, FDI trends, and drivers of these FDI flows, as well as long-term prospects and opportunities for U.S. entities seeking to attract more Asian-Pacific FDI.
August 2009

Invest in America’s Guide to Federal Incentives and Programs Available to Investor’s can be found on the Invest in America website. This document contains federal incentives and programs available to investors in the United States based on research conducted by Invest in America staff. Information is provided regarding programs, contacts, federal agencies, and other relevant data. 
June 2009
 
The Bureau of Economic Analysis (BEA) news release of June 2009 entitled “Foreign Direct Investors’ Outlays to Acquire or Establish U.S. Business Increased in 2008.” Outlays by foreign direct investors to acquire or establish U.S. businesses increased 3 percent in 2008, to $260.4 billion.  Outlays in 2008 were the third-largest on record and the sixth consecutive increase since a falloff in outlays in 2001-2002. 
June 2009

Charles Schott talks about the importance of foreign interest in business in America. (December 9, 2008)
 View video

Invest in America, US Department of Commerce releases a White Paper on Visas and Foreign Direct Investment - Supporting US Competitiveness by Facilitating international Travel . (PDF - November 2007)

US Department of Commerce releases Report - The U.S. Litigation Environment and Foreign Direct Investment (October 2008)