Memos from the Market: New Perspectives on Attracting Investment from the US

By Samer El Husseini

The United States is home to the deepest pools of capital in the world, not surprisingly it is the leading country by the number of start-ups. A wide range of funding sources enables innovation and expansion, giving companies in the US a competitive advantage. 

The U.S. direct investment abroad was $6.49 trillion at the end of 2021 up from $6.09 trillion in 2020, according to statistics released by the U.S. Bureau of Economic Analysis (BEA). This increase of $352.6 billion was mainly invested in Europe, primarily in Ireland and the United Kingdom.

Multinational enterprises in the US invest in different countries, but the majority of the investment in 2021 was mainly in five countries representing more than half of the US Direct Investment abroad position including the United Kingdom, followed by the Netherlands and Luxembourg and lastly Ireland and Canada. The US Multinational enterprises had the majority of their investments in holding companies, followed by finance and insurance, and lastly manufacturing affiliates.

Insights from the Market 

Attracting investment from the US needs a strategy depending on what your region has to offer. After working for nearly a decade in identifying FDI projects from North America, the following insights can be put into consideration when attracting investments from the US:

- It is important to consider potential investments with a positive impact on job creation or technology transfer from sectors that are less likely to be affected by the pandemic such as healthcare, pharmaceuticals, medical devices, finance and insurance.

- After the pandemic, many US companies, especially software and technology providers are considering growing by recruiting talents remotely and engaging in partnerships with local companies and universities. “Talent is everywhere and we are no longer tied to a specific location” that is some of the feedback that we are receiving from US companies recruiting remotely. Economic Development Organizations need to go the extra mile in helping these companies to recruit talent in their region and connect them with local partners/Universities. Usually what happens next is that once these companies have a few people/talent in a location or partners, they tend to create a hub and have a physical presence in the future (3+ years down the road).

- Providing a wide range of funding sources will enable a strong and robust consumer market which is a key reason the U.S. ranks top in the world for FDI, and hosts the most developed, flexible and efficient financial markets in the world.

- Invite the company for a site visit and put an agenda for the visit. Also inviting the company to events in your country.

Attracting investment from the US is a long process which may take from 3-5 years, it is also a mix of different factors including regulations, business climate, talent, incentives, and ease of doing business. Following up, meeting in person, sending the required information requested by the investor and inviting investors for a site visit are key to success in attracting investments from the US market. 


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