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Foreign direct investment (FDI) in the United States

FDI in Figures

According to UNCTAD's World Investment Report 2024, with USD 311 billion in FDI inflows, the U.S. remained the largest FDI recipient in 2023, accounting for almost a quarter of the global total, with the country being the top destination for both greenfield projects and international project finance deals. Despite this achievement, FDI inflows fell by 6% year-on-year, driven by a significant drop in cross-border mergers and acquisitions (M&As), which decreased by 40% to USD 81 billion—half the average of the past decade. Much of the decline was attributed to lower deal values in the ICT sector. For the year as a whole, a total of 2,152 greenfield investment announcements were made. The USD 23 billion reverse merger of VinFast Auto in Vietnam with a United States-based special purpose acquisition company (SPAC) was the world's largest merger and acquisition deal in 2023. At the end of the same year, the inward FDI stock reached USD 12.81 trillion, around 46.8% of the country’s GDP. According to data from the Bureau of Economic Analysis, by foreign parent country, four nations accounted for half of total FDI in the U.S. by the end of 2023: the Netherlands (USD 717.5 billion), Japan (USD 688.1 billion), Canada (USD 671.6 billion), and the UK (USD 630.1 billion). However, by ultimate beneficial owner, Japan led with USD 783.3 billion, followed by Canada (USD 749.6 billion) and Germany (USD 657.8 billion), which surpassed the UK (USD 635.6 billion) as the third-largest investor. Foreign direct investment in the United States remains centred on the manufacturing sector, representing 41.2% of the total investment (with chemicals comprising the largest share of manufacturing). Additionally, substantial investments are observed in finance and insurance (10.6%) as well as wholesale trade (10%). The latest data available from the OECD shows that in the first semester of 2024, FDI inflows to the U.S. totalled USD 153.2 billion, marking a 12.3% decrease compared to the same period one year earlier. Finally, it has to be noted that the U.S. is by far the leading outward investor worldwide with USD 404.3 billion in FDI outflows in 2023. According to early 2025 data from the U.S. Bureau of Economic Analysis, the U.S. net international investment position was –USD 23.60 trillion at the end of Q3 2024: total assets amounted to USD 37.86 trillion, while liabilities reached USD 61.46 trillion.

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. Furthermore, political and policy changes can impact investment conditions and may introduce uncertainty for foreign investors. In 2022, former 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. President Donald Trump's announcement of a 25% tariff increase on imports from Mexico and Canada, along with a 10% hike on those from China, could have a positive impact on FDI inflows, as instead of nearshoring projects to Canada and Mexico, more companies may start looking to invest directly into the U.S. The U.S. ranks 3rd among the 133 economies on the Global Innovation Index 2024, 25th out of 184 countries on the 2024 Index of Economic Freedom, and 24th in the latest Corruption Perception Index.

 
Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 95,882387,780285,057
FDI Stock (million USD) 10,292,40313,056,38210,461,684
Number of Greenfield Investments* 1,6551,6912,075
Value of Greenfield Investments (million USD) 69,27595,635163,858

Source: UNCTAD, Latest available data

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.

 
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: Doing Business, Latest 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.

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What to consider if you invest in the United States

Strong Points

The United States' strong points include:

  • The United States offers the largest consumer market on earth with a GDP of $23 trillion and 333.9 million people.
  • The US has the first world economy, solid and performance in various sectors
  • A dominant position in R&D
  • A flexible and reactive employment market
  • A very good quality of national statistics
  • 70% of public debt held by Americans
  • The American workforce has a comparatively high level of qualifications and is considered to be one of the most productive and innovative in the world
  • The dollar is central to the world economic system
  • Notably thanks to the shale gas, the country is on his way to energetic autonomy  
  • The development of regional ‘clusters’ (collections of companies in the same activity sector in a geographic area) is very attractive to foreign investors
Weak Points

Weak points for FDI in the US:

  • The US market is very competitive. Consumers are accustomed to have many choices and are not necessarily brand loyalists
  • A high number of Americans are unemployed and outside the employment market
  • A decreasing productivity
  • High public debt
  • Polarised political landscape
  • Strong socio-economic disparities
  • Infrastructure network is partially in decay
  • A risk of explosion of the student loan bubble
  • Strong dollar increases the trade deficit
Government Measures to Motivate or Restrict FDI
The US is the world's largest recipient of foreign direct investment (FDI). The US government policies on taxation and regulation offer foreign investors wide freedom. Nevertheless investments controlled by foreign governments may be subject to restrictions.

Foreign investment is reviewed by the Committee on Foreign Investment in the United States (CFIUS) to consider national security risks that may be present in a foreign investment in a US business. In 2018, Congress passed, and the President signed into law,  the Foreign Investment Risk Review Modernisation Act (FIRRMA) which aims to modernise and reinforce the Committee of Foreign investments (CFIUS) in order to watch investments that may cause problems for the national security of the United States. FIRRMA was finally adopted in February 2020. Until the adoption of FIRRMA, there was no concept of a mandatory filing for any acquisition or investment (controlling or non-controlling). FIRRMA established the requirement of a mandatory filing for investments in 27 specific industries (pilot programme industries) involving so-called ‘critical technologies’, “critical infrastructure” and “sensitive personal data”.
In October 2017, Congress also adopted the United States Foreign Investment Review Act which will allow the Department of Commerce to examine the economic effects of certain foreign investments. Certain sectors are particularly targeted because they are regarded as strategic for the US. And FDI coming from certain countries is being more carefully screened. More information on these decrees is available here.

SelectUSA is a program led by the U.S. Department of Commerce that facilitates and promotes job-creating business investment into the United States. For more information about FDI incentives, click here.
Bilateral investment conventions signed by the United States
The U.S. is a signatory to 47 conventions. The UNCTAD website allows you to visualise and download the list of conventions signed by the United States.

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Latest Update: February 2025