According to UNCTAD'sWorld Investment Report 2023, FDI flows to the U.S. stood at USD 285 billion in 2022. Albeit a 26.5% decrease year-on-year (due to the halving of cross-border M&A values), the U.S. were still the biggest recipient of FDI worldwide. The decline in mergers and acquisitions directly influenced the equity portion of FDI, experiencing a 35% drop. Inflows notably decreased in the chemicals, computer and electronic products, and finance sectors. However, the information and communication industry maintained its status as the largest recipient, with a USD 51 billion influx, marking a 21% rise from 2021. For the year as a whole, a total of 2,075 greenfield investment announcements were made, the largest number globally. The U.S. FDI stock reached USD 10.46 trillion in 2022, around 41.1% of the country’s GDP. According to data from the U.S. International Trade Administration, the main investing countries in the U.S. are Japan (USD 721 billion), Canada (USD 607.2 billion), Germany (USD 498.6 billion), and the United Kingdom (USD 439 billion), with Europe as a whole accounting for USD 2.8 trillion. Foreign direct investment in the United States remains centred on the manufacturing sector, representing 42.4% of the total investment. Additionally, substantial investments are observed in finance and insurance (10.6%) as well as wholesale trade (9.7%). The latest data available from the OECD shows that in the first semester of 2023, FDI inflows to the U.S. totalled USD 189.5 billion, marking an 8.4% increase compared to the same period one year earlier.
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. Additionally, political and policy changes can impact investment conditions and may introduce uncertainty for foreign investors. On 15 September 2022, 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.
The U.S. ranks 3rd among the 132 economies on theGlobal Innovation Index 2023,25th out of 184 countries on the2023 Index of Economic Freedom, and 24th in the latest Corruption Perception Index.
FAQs
The foreign direct investment in the United States position increased $216.8 billion to $5.25 trillion at the end of 2022 from $5.04 trillion at the end of 2021.
Does the U.S. allow foreign investment? ›
Unlike many countries, the United States has generally remained open for investment in US real estate by foreign owned entities, albeit with some government oversight.
Which country invests most in the USA? ›
According to data from the U.S. International Trade Administration, the main investing countries in the U.S. are Japan (USD 721 billion), Canada (USD 607.2 billion), Germany (USD 498.6 billion), and the United Kingdom (USD 439 billion), with Europe as a whole accounting for USD 2.8 trillion.
Is America a good foreign market to invest in? ›
The United States has been ranked as the top destination for foreign direct investment for the 12th consecutive year according to Kearney's Global Business Policy Council's 2024 Foreign Direct Investment (FDI) Confidence Index .
How much of the United States is owned by foreign investors? ›
According to the latest data from the U.S. Department of Agriculture, foreign investors and companies own over 40 million acres of U.S. agricultural land, which is about 1.8% of all land in the U.S. and 3.1% of all privately held agricultural land.
Why is foreign investment important in the US? ›
Invest in America. Foreign direct investment (FDI) plays a major role in the U.S. economy, both as a key driver of the economy and an important source of innovation, exports and jobs. The United States has always provided foreign investors a stable and welcoming market.
How much farmland in the US is owned by foreigners? ›
Foreign persons held an interest in over 43.4 million acres of U.S. agricultural land as of December 31, 2022. This is 3.4 percent of all privately held agricultural land and nearly 2 percent of all land in the United States.
Do foreign investments threaten the American economy? ›
To the contrary, the data demonstrate that foreign investment helps the U.S. economy. Official government statistics, unadjusted for inflation, show that total foreign investment in the U.S passive and direct reached 1.7 t rillion last year.
Who is the number 1 investor in America? ›
1. Warren Buffett. Warren Buffett, CEO & Chairman of Berkshire Hathaway, is one of history's most successful investors, consistently ranking first among US global investors.
Who does America fund the most? ›
Since World War II, $960 billion, or over quarter of all US foreign aid, has gone to five countries: Israel ($312.5 billion), former South Vietnam ($184.5 billion), Egypt ($183.7 billion), Afghanistan ($158.9 billion), and South Korea ($120.7 billion), after adjusting for inflation.
Since 2011, Gallup has asked Americans to choose among real estate, stocks, gold, savings accounts and bonds as the best investment. Cryptocurrency was added as an option in 2022. Real estate has topped the list each year since 2014, with between 30% and 45% (in 2022) selecting it.
Why are foreigners buying US assets? ›
Indeed, they may choose to purchase U.S. portfolio investments in order to benefit from the highly developed, liquid, and efficient U.S. financial markets, and from the strong corporate governance and institutions in the United States -- although both of these perceived strengths of the United States have shown some ...
What are the rules for foreign investments in the US? ›
Foreign investment is prohibited in the following areas: a) defense, internal public order and State security; b) banking activities involving central bank and issuing bank function; c) other areas which are considered by law to be absolutely reserved for the State or the Sovereign Prince.
Why is it good to invest in the USA? ›
On top of being the largest global market, the U.S market is the playground for some of the world's largest corporations such as Apple, Amazon, and Microsoft, to name a few. This large pool presents ample opportunities and quality growth, attracting investors from all over the globe.
How much of the U.S. housing market is owned by foreign investors? ›
But the percentage of homes in the U.S. owned by non-Americans is usually pretty small — between 2% and 3%. The percentage of commercial real estate owned by foreign investors is a lot higher — or at least it has been.
Which state has highest foreign investment? ›
Top 5 States receiving highest FDI Equity Inflow during FY 2023-24 are Maharashtra (30%), Karnataka (22%), Gujarat (17%), Delhi (13%), and Tamil Nadu (5%).
What is the United States share of worldwide direct investment? ›
The United States faces stiff global competition for investment dollars; it accounted for 24 percent of the world's inward stock of foreign direct investment in 2022, down from 28 percent in 2002. And in 2012, the United States' share of global FDI was down to just 17 percent.
