Global FDI Trending Downward, But U.S. Still #1 Destination
According to the latest report from the United Nations Conference on Trade and Development (UNCTAD), global FDI has been trending lower — falling 41 percent to $470 billion in the first six months of 2018, following a 23 percent drop in 2017. UNCTAD Investment Chief James Zhan noted the 2017 slump was primarily caused by Trump’s tax reforms that caused U.S. firms to repatriate $217 billion from foreign affiliates.
In fact, FDI into the U.S. has declined 15 percent since 2000, according to the Organization for International Investment (OFII). Despite this, total stock of foreign direct investment in the United States is valued at $4 trillion, which is the single largest amount in the world for any nation. FDI in the U.S. remains unrivaled due to the nation’s highly educated, diverse workforce; intellectual property protections; R&D networks; and pro-business environment at the federal, state, and local levels.
When considering a U.S. location, international companies often have questions about project finance, supply-chain issues, and more. Besides picking a “greenfield” site, other strategies may include establishing a joint venture or partnership with a U.S. firm or making an acquisition. Also, assembling a team that includes attorneys, brokers, bankers, and consultants is often of help. On the other hand, U.S. firms interested in boosting their overseas activities can get help from the trade division within their state’s economic development office.
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