Insourcing, or foreign direct investment in the United States (FDIUS), bolsters U.S. manufacturing. Foreign-owned manufacturers, with nearly 1,800 affiliates in the United States in 2014, employ millions of Americans in high-paying jobs. Because 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.
U.S. affiliates of foreign companies boost domestic exports by shipping finished goods from their U.S. factories back to their parent companies. They 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 U.S.-made inputs, a benefit for the American economy. Foreign companies in the United States accounted for more than a quarter of total U.S. goods exports in 2014.
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 185,500 highpayingAmerican jobs, helps spur the discovery of new productsand processes, and contributes to America’s economic growth.Over six years, foreign companies spent nearly $300 billion onresearch and development. Read more here.
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
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.
Overall, CFO confidence levels in 2016 are similar to 2014, but concerns about the future have risen. The United States is the “top location for growth and new investment” in the next five years for 20 percent of CFOs, up from 13 percent in 2014. However, this looks to be due, in part, to weakening elsewhere. While 33 percent of CFOs chose China as the top destination, its level has fallen from 49 percent in 2014. The percentage of CFOs who expect the U.S.
Foreign direct investment in the United States, known as FDIUS, totaled $2.9 trillion through 2014 on a historical-cost basis. Each year foreign firms make new investments in the United States, which benefit the American economy in numerous ways. They build new factories, grow their well-established U.S. operations, fund research and development, and employ millions of Americans in well-paying jobs.
Financial Executives International
Information Technology Industry Council
National Association of Manufacturers
National Foreign Trade Council
Organization for International Investment
Software Finance & Tax Executives Council
Trans-Atlantic Business Council
U.S. Chamber of Commerce
United States Council for International Business
January 27, 2016
Making America the best place in the world to invest and create jobs should be the goal of corporate tax policy. Failure to modernize our system for the 21st century has hurt America’s competitiveness. As congressional leaders look for ways to update our system, it is imperative that they recognize how taxing growth by adding further restrictions on interest expense will lead to fewer U.S. jobs, lower wages, and decreased GDP – the antithesis of what these leaders and millions of their constituents desire. Read more HERE
U.S. affiliates of foreign companies boost domestic exports by shipping finished goods from their U.S. facilities back to their parent companies. Sometimes they use the United States as part of their global supply chain, allowing them to sell to customers around the world. These exports increase demand for raw materials and other inputs, providing another positive lift to the U.S. economy. Foreign companies in the United States typically account for about one-fifth of total U.S. merchandise exports.
Read more HERE