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Insourcing Benefits: U.S. Manufacturing

Insourcing, or foreign direct investment in the United States (FDIUS), bolsters U.S. manufacturing. Foreign-owned manufacturers, with more than 1,700 affiliates in the United States in 2013, employ millions of Americans in high-paying jobs. Since supplier companies often locate nearby to furnish manufacturers with materials, component parts, and various support services, foreign investment in manufacturing provides significant employment spillovers. Economists estimate for each manufacturing job two to five additional jobs are created elsewhere in the economy.

Insourcing Benefits: U.S. Exports

U.S. affiliates of foreign companies boost domestic exports by shipping finished goods from their U.S. facilities back to their parent companies. They may also use the United States as part of their global supply chains, allowing them to sell to customers around the world. These exports increase demand for raw materials and other inputs, providing additional positive lifts to the U.S. economy. Foreign companies in the United States accounted for nearly one-quarter of total U.S. goods exports in 2013. Read more here.

Insourcing Benefits: U.S. Research & Development

Foreign-owned firms continue to expand their research and development(R&D) activities in the United States. R&D carried out byforeign companies in the United States supports more than175,000 high-paying American jobs, helps spur the discovery ofnew products and processes, and contributes to America’s economicgrowth. Over six years, foreign companies spent morethan a quarter-trillion dollars on research and development. Read more here.

Potential Impacts of Proposed Section 385 Regulations: Inbound and Outbound Examples

On April 4, 2016, the Department of the Treasury and the Internal Revenue Service (“IRS”) issued a Notice of Proposed Rulemaking under Internal Revenue Code section 385.  The Proposed Regulations contain three sets of rules: (1) they authorize the IRS to treat certain related-party debt arrangements as part stock and part debt; (2) they establish a contemporaneous documentation requ irement that must be satisfied for certain related-party debt to be respected as debt; and (3) they treat certain categories of related-party debt as equity, including a rule treating debt issued within a 72-mon

Jobs We Need

When global companies invest in the United States, they bring much more than capital and the jobs it creates.  These employers provide expertise and resources that benefit U.S. workers and local communities across the country.  In fact, it may surprise you to learn that Americans connected to global companies earn higher wages and benefits than the economy-wide average.

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