The United States is the world’s largest recipient of foreign direct investment. Foreign investors are attracted by this country’s sizable and open market, the quality of its infrastructure, high income levels, access to cutting-edge technology and research, rule of law, and treatment of foreign-owned businesses. The U.S. draws investment from the most internationally competitive foreign-owned companies; these investors bring global experience, new products, and different processes as well as capital, making our economy one of the most flexible and dynamic in the world.

Some other major recipients of FDI are the UK, France, the Netherlands, and Germany among the advanced countries and China (including Hong Kong) and Russia among the transition economies.

The developed countries’ share of global FDI inflows fell below 50 percent for the first time in 2011 because of the gloomier economic outlook prompted by government austerity measures, sovereign debt crises, and regulatory concerns. Compared with the European countries and Japan, the recovery of U.S. FDI inflows was strong, a result of the relatively robust economic growth and fast increase in reinvested earnings. To continue to attract FDI, the United States must be able to compete with other countries in factors critical to foreign investors, such as an educated workforce, a high-quality business environment, and a transparent regulatory process. Structural costs such as energy and taxes, however, are raising the costs of domestic production and make this country less appealing for investment.

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