The land of opportunity?
In 2015, the United States topped the Foreign Direct Investment Confidence Index for the third year in a row. Established in 1998 by one of the leading American management consulting firms, the index is a forward-looking analysis of how political, economic, and regulatory changes affect the flow of FDI into a particular country. While the United States' lead over second-place China shrank in comparison to last year, the U.S. still leads the pack in terms of investors' positive outlook. The 2015 results indicated that 46% of business executives are more optimistic about the U.S. economy's performance this year (compared to just 10% that are more pessimistic), and international business executives are generally willing to overlook the continued political deadlock at the federal level. But whether or not the U.S. can retain its current status as the most attractive investment location globally depends on both macroeconomic and financial conditions within the country, and the increasing attractiveness of other countries as they open up their economies to global investors.
So what makes the U.S. market so attractive to foreign businesses? In its 2014 report, the Organization for International Investment found several key advantages to the U.S. market. Above all, the U.S. offers one of the most open markets and investment climates in the world. Other advantages of the U.S. cited in the report include:
- • The world-class higher education system;
- • The skilled and productive labor force available;
- • The risk-taking, innovation-inducing culture; and,
- • The transparency of the regulatory framework.
Expanding your business to the United States can be one of the fastest ways to grow your company, expand your customer base, and develop new innovations while taking advantage of the skilled labor and relaxed regulatory framework. But while the U.S. may seem like an easy market to conquer at first glance, understanding and navigating the business and legal climate in the country is often the key to success in the market, and is, in actuality, more complex than one might think.
Further links:
» Williams Mullen: Guide for Foreign Companies Establishing Operations in the United States
» PWC: Doing Business in the United States - A guide to the key tax issues
» Fried Frank: Coming to America - The legal basics
» Organization for International Investment: FDI in the U.S. 2014 Report