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 by foreign companies in the United States supports 185,500 high-paying American jobs, helps spur the discovery of new products and 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.
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