United States of America

Discover more about investments in the United States – the economic capital of the world.
Read about some of the most pertinent companies and individuals making investments in the country.

Economic History in Brief

The United States of America is a North American nation that consists of a federal republic, five self-governing territories and 50 states. Covering an area of 9.8 million square kilometres, it is one of the world’s largest countries. The United States is a powerful and highly developed country and has the fastest-growing economy in the Americas. With the world’s largest nominal GDP and second-largest PPP, the United States is known as a global economic superpower. Even though the country’s population accounts only for 4.3% of the global population, it holds over a third of the total wealth in the world – the largest concentration of wealth in any single country.

The United States is the leading global military power and a formidable force politically, culturally and academically.
US economy is fueled by natural resources and a high level of productivity. The United States has a ‘special relationship’ with the United Kingdom and strong ties with several other countries like Canada, Australia, Italy, Germany and France. These relationships include significant cross-border investments.

Investment Opportunities

The United States has a mixed economy with heavy capitalist leanings which forms an ideal breeding ground for investment. Known as the largest single recipient of Foreign Direct Investment (FDI) in the world, the United States has always offered a welcoming and stable market to foreign investors. As FDI plays an essential role in ensuring the growth and prosperity of the economy by creating jobs, driving exports and encouraging innovation, the United States encourages, welcomes and supports foreign investment initiatives.

The US legal system complements business dealings with transparency and predictability. Organization is exceptional, taxes are low and the most lucrative consumer market is at every investor’s fingertips. The United States government also offers a range of programs and services geared to assist investors that operate companies within its borders. The services include areas like general workforce development and industry-specific incentives, ideal for FDI.
A particularly active and lucrative investment avenue is the manufacturing industry. In 2016 alone, FDI contributed as much as US$1.5 trillion to the industry. The technology industry has experienced consistent growth over the past few decades and continues to be an attractive investment arena. This includes e-commerce, mobile gaming, social media, big data, IoT, and in recent years – cryptocurrency and blockchain technology.

Companies Investing in the United States

Being a world leader in FDI, it would be nearly impossible to list all of the major companies investing in the US; almost every significant player in every economic field has some sort of major investment in the States.
A few major investments, however, stand out in recent years:

In late 2017 AT&T announced plans to invest an additional US$8 billion into the United States as soon as the Republican tax bill is passed. The company also committed to paying 200,000 of its employees in the United States a bonus of US$1,000 in celebration of the bill being passed. Another technology company that is serious about the United States when it comes to investment is Intel. In February 2017 they announced that they would be making a multibillion-dollar investment in constructing a semiconductor factory in Arizona.

Saudi Arabian state-run oil giant Saudi Aramco started negotiations with US company Tellurian (TELL) with the aim of buying a percentage of its natural gas. It was also reported that Saudi Aramco is exploring asset options in the Permian and Eagle Ford shale formations. Should negotiations come to fruition this would be the first time that the Saudi Arabian company has any output from foreign shores. Investing in shale in the United States would also give Saudi Arabia access to knowledge on how the country’s oil industry is able to quickly start and stop projects. Saudi Aramco would not be the first Middle Eastern country investing in United States shale: the United Arab Emirates’ Mubadala sovereign fund has also made investments in the country’s shale through a private equity firm.

Investors with Interests in the United States

With cryptocurrency taking the world by storm, it is not surprising that investors of all sizes are pursuing it. Ari Paul, CEO of BlockTower Capital is an investment specialist when it comes to cryptocurrency. Despite this being a hyper-volatile investment that is vulnerable to regulatory changes, this hyper-modern form of currency is still on an upward trajectory and the United States holds around a quarter of the global market.

Also in the technology industry, Apple COO Jeff Williams is committing to further investment in the United States. In addition to the US$1 billion already allocated to investment in the country, Williams has announced that they would invest a further US$390 million into Finisar to transform a massive manufacturing plant in Texas. In December 2017 Williams announced that they are not thinking in terms of a limit to investment funding into the United States.
Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi is the head of Mubadala Development Company which is the chief investment vehicle of the Abu Dhabi government and through which investments in shale are made into the United States.

Conclusion

The United States continues to be a highly attractive FDI destination for several reasons, including a progressive business environment that encourages innovation, a productive and skilled workforce, a substantial consumer base and an attractive legal system. Investments are made in the form of new operations, the acquisition of existing operations and in providing financial backing to existing companies operating in the country. Investments in the manufacturing industry, as well as a variety of technology driven industries, are proving to be consistently popular. In 2016 and 2017 the United States had an FDI stock of over three times the size of any other destination country.
As in previous years the United Kingdom, Germany, the Netherlands, Canada and Japan continue to occupy the largest FDI positions in the United States, while the oil and automobile industries continue to be their main focus with companies like British Petroleum (BP), Royal Dutch Shell and Royal Ahold N.V. from the Netherlands, and Honda, Toyota and Nissan Motors from Japan pushing massive revenue into the country.

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DealBook, YouTube

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