Expanding your business to the United
States
Malaysian SME Delegation
October 16, 2014
Aaron Brickman
Deputy Executive Director
SelectUSA
© International Trade Administration 2014
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Agenda
I. Introductions
II. Overview of FDI Trends
III. U.S. Business Climate
IV. About SelectUSA Services
V. Q&A
© International Trade Administration 2014
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SelectUSA
I. Introductions
© International Trade Administration 2014
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SelectUSA
II. Overview of FDI Trends
© International Trade Administration 2014
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Global FDI Trends
$6,000,000
The United States remains the largest
recipient of FDI in the world.
$5,000,000
USD Millions
$4.9 Trillion
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
22 largest country recipients by FDI stock in 2013; Currency displayed at current market value.
Source: UN Conference on Trade and Development
© International Trade Administration 2014
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U.S. FDI Trends
Top 15 FDI Growth Markets, 2013
34.6%
34.6%| |$23.8b
$23.8b
34.6% | $23.8b
20.8%
20.8%| |$140.1b
$140.1b
20.8% | $140.1b
18.9%
18.9%| |$2.0m
$2.0m
18.9% | $2.0m
36.6%
36.6%| |$202.0m
$202m
36.6% | $202m
29.1%
29.1%| |$41.0b
$41.0b
29.1% | $41.0b
14.6%
14.7%| |$48.6b
$48.6b
14.7% | $48.6b
15.3%
15.2%| |$21.2b
$21.2b
15.2% | $21.2b
19.6%
19.6%| |$14.9b
$14.9b
19.6% | $14.9b
15.6%
15.6%| |$5.2b
$5.2b
15.6%
|
$5.2b
14.6%
14.6%| |$2.0b
$2.0b
14.6% | $2.0b
14.3%
14.3%||$3.6b
$3.6b
14.3% | $3.6b
Note: Figures denote 5 year compound annual growth rate (2009-2013)
of the stock FDI position and the total stock of FDI in the United States
Source: Department of Commerce, Bureau of Economic Analysis – FDI by
Ultimate Beneficiary Owner
© International Trade Administration 2014
41.5%
41.54%
| $8.0b
| $8.0b
41.54% | $8.0b
29.3%
29.34%
| $11.0b
| $11.0b
29.34% | $11.0b
24.1%
24.11%
| $1.5b
| $1.5b
24.11% | $1.5b
21.7%
21.72%
| $31.5b
| $31.5b
21.72% | $31.5b
Fastest Growing Sources of FDI in the United States by
Compound Annual Growth Rate (CAGR) 2009-2013
2013 Stock
Rank
Market
million USD
CAGR
1
China
8,023
41.54%
2
Hungary
202
36.61%
3
Luxembourg
23,823
34.56%
4
India
11,040
29.34%
5
Norway
40,986
29.11%
6
Malaysia
1,540
24.11%
7
Korea, Republic of
31,520
21.72%
8
Switzerland
140,142
20.83%
9
Brazil
14,852
19.55%
10
Malta
2
18.92%
11
Venezuela
5,190
15.62%
12 United Arab Emirates
21,204
15.25%
13
Sweden
48,582
14.64%
14
Colombia
2,022
14.63%
15
South Africa
3,647
14.31%
6
FDI in the United States by Industry, 2013
Largest Recipients by Position
Professional,
scientific,
and technical
services,
104,233, 4%
Information,
148,551, 5%
Retail trade,
59,870, 2%
• Finance & Insurance and Banking
are the second largest recipients,
accounting for 20 percent of total
FDI position.
Banking,
181,391, 7%
Wholesale
trade,
328,546,
12%
Real estate
and rental
and leasing,
50,651, 2%
• Manufacturing is the largest
recipient of FDI in the United
States, accounting for more than
one-third of total position.
Manufacturing,
935,728, 34%
Finance and
insurance*,
364,727,
13%
Other
industries,
590,260,
21%
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
• Other industries include agriculture
and forestry, mining, utilities,
construction, transportation &
warehousing, and more.
• Official data on FDI in the United
States now showcases real estate
and rental/leasing as an
independent category, accounting
for two percent of total position.
7
FDI in the United States by Industry
Growth in Selected Sectors, 2009 - 2013
DEPOSITORY INSTITUTIONS (BANKING)
Banking (branches and agencies)
PROFESSIONAL, SCIENTIFIC & TECHNICAL SERVICES
Mgmt, sci, & tech consulting
Business support services
WHOLESALE TRADE
OTHER INDUSTRIES
Metal ore mining
Gold and silver ores
MANUFACTURING
Basic chemicals
Electrical equipment
Other Petro & Coal Manuf (Asphalt and other petroleum and…
Manuf (Chemical and allied products)
Semiconductors and other electronic components
Food
RETAIL TRADE
FINANCE & INSURANCE
Activities related to credit intermediation
Accounting, tax preparation, bookkeeping, and payroll services
Funds, trusts, and other financial vehicles
REAL ESTATE
INFORMATION
0%
10%
20%
30%
40%
50%
60%
70%
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
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Manufacturing FDI in the United States, 2013
Position: $935.7 Billion
Food, 50,983, 5%
Computers and
Electrical
electronic
equipment, 47,310,
products, 49,352,
5%
5%
Primary and
fabricated metals,
52,989, 6%
Chemicals,
280,445, 30%
Machinery, 87,188,
9%
Transportation
equipment,
110,327, 12%
Other,
257,135, 28%
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
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FDI in the United States – Other Sectors, 2013
Position: $590.3 Billion
Transport and
warehousing,
47,776, 8%
Other [Hospitality,
Construction,
Healthcare,
Agriculture],
59,365, 10%
Utilities, 67,441,
11%
Administration,
support, and waste
management,
35,396, 6%
Holding companies
(nonbank),
229,895, 39%
Mining, 150,386,
26%
Source: Department of Commerce, Bureau of Economic Analysis
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U.S.-Malaysia FDI Relationship
Announced Malaysian FDI Projects into the United States by
Industry 2003-Present
Financial Services
13%
Other
31%
Business Services
4%
Automotive OEM
9%
Communications
9%
Electronic
Components
9%
Semiconductors
9%
Automotive
Components
4%
Wood Products
4%
Hotels & Tourism
4%
Software & IT
services
4%
Source: fDimarkets.com
Total number of projects: 23 ; Total capex: $308 million ; Total jobs created: 1,528
Other Includes: Chemicals, Food & Tobacco, Industrial Machinery, Equipment & Tools, Medical Devices, Metals, Plastics, Rubber
© International Trade Administration 2014
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SelectUSA
III. U.S. Business Climate
© International Trade Administration 2014
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U.S. Open Investment Policy
“The United States reaffirms our open
investment policy, a commitment to treat all
investors in a fair and equitable manner
under the law.”
-Statement by the President of the United States, June 20, 2011
Upheld by administrations throughout U.S. history.
Core obligation in bilateral investment treaties (BITs).
Ensures investors and investments receive treatment no less
favorable than a country affords to its own investors and
investments.
© International Trade Administration 2014
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U.S. Business Climate
#1
#1
AT Kearney’s 2014 FDI Confidence Index
AT Kearney 2014 FDI Confidence Index
China: #2
Rank
Market
1
United States
Germany: #6
UK: #4
IESE Business School’s 2013 Venture Capital
and Private Equity Index
Canada: #2
UK: #3
Japan: #4
2
China
3
Canada
+1
4
United Kingdom
+4
5
Brazil
-2
6
Germany
+1
7
India
-2
8
Australia
-2
9
Singapore
+1
10
France
+2
#4
World Bank’s Ease of Doing Business 2013
Ranking
#5
World Economic Forum’s 2013-2014 Global Competitiveness Rankings
Singapore: #1
Hong Kong: #7
© International Trade Administration 2014
Hong Kong SAR: #2 New Zealand: #3
Japan: #9
Δ 2013
-
Source: AT Kearney, 2014
China: #29
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U.S. Business Climate
Strategic Market & FTAs
Population of U.S. and FTAs is 695 million; U.S. 42% of Global Consumer Goods Market
Center for Global Innovation and Entrepreneurship
U.S. Responsible for 36% of Total World R&D Expenditures (EU-27 accounted for 24%);
2
Average 558,000 new businesses created per month in 2009
30%
15%
10%
4
Productive Workforce
U.S. labor productivity grew 2.3% in 2009 (France: -1%, Germany: -2.3%, UK: -2.5%)
Open to People, Cultures, and Ideas
35%
20%
50.1%of the Patents Granted in 2009 by the U.S. Patent Office Originated
3
from a Foreign Country
15 of the top 20 universities in the World (Europe has 4 of the top 20)
Distribution of Worldwide R&D
Expenditures, 2010
25%
Strong Intellectual Property Right Protections
A Leader in Higher Education
1
5%
0%
5
US
Asia
Europe
Other
Source: National Science Foundation Science
and Engineering Indicators 2010
1. Office of the U.S. Trade Representative; Central Intelligence Agency – The World Factbook; and Credit Suisse survey; 2 National Science Foundation Science and Engineering Indicators 2010;
Kauffman Index of Entrepreneurial Activity 1996-2009; 3. U.S. Patent and Trademark Office; 4. The Times Higher Education Report 2010-2011 (U.K.); 5. OECD Labor Productivity Statistics
© International Trade Administration 2014
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U.S. Manufacturing Resurgence
Low Manufacturing Costs
• By 2015, average U.S. manufacturing costs estimated to be 21 percent lower
than Japan, and 15% lower than France and Germany
Productive & Skilled Workforce
• 41 percent of U.S. workforce between ages 25 – 64 attain
higher level education
• Over 1.5 million U.S. manufacturing workers are classified as high-skilled
Labor Cost & Flexibility
Source: Hyundai Motor Manufacturing Alabama
• 2015 productivity-adjusted wages are projected to be 1.3 – 1.9 times lower than developed labor
markets like France, Germany, Italy, Japan, and UK
• Labor market flexibility in U.S. greater than most other OECD countries
Input Costs
• The cost of energy has significantly declined, lowering input costs like utilities, processing, raw
materials, and logistics
• Underutilized ports lower shipping costs for U.S. manufacturers
Policy Support
• Several federal initiatives/ programs to support manufacturing
• Make it in America Challenge (EDA)
• NIST –MEP program
Sources: Boston Consulting Group, September 2012; U.S. Department of Commerce Office of Manufacturing and Services
© International Trade Administration 2014
U.S. Strengths in Oil & Gas
Domestic energy production revolution1
• Driven by Shale gas discovery and development
• 10 trillion cubic feet projected to be produced by 2030
• U.S. features existing pipelines and other infrastructure (vs. China)
A global energy player2
• Estimated to overtake Saudi Arabia in oil production by around 2020
• Estimated to overtake Russia in gas production around 2015
Dramatic decline in prices3
• Prices set locally, rather than globally
• 1/2 to 1/3 of cost compared with Japan, Italy, Germany
• Significant impact on industrial energy prices as well
(with positive outcomes for industry)
Dramatic investment successes4
• Johannesburg-based Sasol Limited announced plans to establish a
Gas-to-Liquids plant in Louisiana
• Expectation of follow-on investment in related chemicals manufacturing
• Total project investment $21 billion
• Expectation that project will create 1,200 permanent jobs and 7,000 temporary jobs
• Sasol has stated its active exploration of the U.S. market for the company’s future
growth in areas like petrochemicals and fertilizer manufacturing.
Sources: 1. Boston Consulting Group 2. IEA—World Energy Outlook 2012 3. Business Day Live (SA Newspaper) 4. SelectUSA
© International Trade Administration 2014
Source: Sasol
Productive Workforce
The United States has the most productive workforce among the world’s
largest economies
GDP Per Employed Person in 2011 (in USD)
120,000
100,000
80,000
60,000
40,000
20,000
0
United
States
France
Australia
United
Kingdom
Italy
Canada Germany
Japan
South
Korea
Source: Bureau of Labor Statistics
© International Trade Administration 2014
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Transparent Legal System and IPR
Protection
• The advanced legal system in
the United States provides
transparency, predictability,
and flexibility.
• This system resolves
disputes quickly, often
before significant expense is
incurred.
• It also makes the United
States the world’s leader in
protecting intellectual
property rights.
© International Trade Administration 2014
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SelectUSA
IV. About SelectUSA
© International Trade Administration 2014
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Nature of Investing in the United States:
State, Local & Regional EDOs
State
© International Trade Administration 2014
Regional
Local
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About SelectUSA
Housed in the U.S. Department of Commerce, SelectUSA’s mission is to promote
and facilitate business investment in the United States. It is housed in the U.S.
Department of Commerce and represented by the Commercial Service at U.S.
Embassies and Consulates across 72 worldwide markets.
SelectUSA is geographically neutral and represents the entire United States. It
uphold the U.S. open investment policy and performs uniquely federal functions.
Our Clients:
 Companies (investors)
 U.S. States, Regions, and Cities
Current Personnel & Teams
•
Investment Policy and Promotion
•
Communications and Outreach
•
Operations and Planning
© International Trade Administration 2014
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SelectUSA Can Help
Key SelectUSA Services Offered to Companies:
Information and Counseling: We provide subject-matter
expertise to companies on business investment in the
United States.
Connections: We assist companies with industry
information, analysis, and points of contact and connect
them with U.S. cities and states.
Ombudsman Assistance: We help companies with
questions or concerns about U.S. federal rules and
regulations.
© International Trade Administration 2014
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SelectUSA Services for Firms:
Information & Counseling
SelectUSA provides actionable information to international investors and U.S.
companies considering re-shoring on the benefits of…






Establishing operations in the United States
Understand basic U.S. tax and legal concepts
Navigate federal rules or regulations
Learn about incentives available to businesses in the U.S.
Apply for a business-related visa
Connect with U.S. state, city, or regional EDOs
www.statebook.com
StateBook International
© International Trade Administration 2014
www.stateincentives.org
State Business Incentives
Database
www.clustermapping.us
Cluster Mapping tool and registry
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SelectUSA Services for Firms:
Ombudsman Assistance
 SelectUSA coordinates federal agencies through the Interagency
Investment Working Group to address investor questions and concerns
related to a wide range of federal regulatory issues.
 Select USA aims to ensure investors understand the U.S. system and
receive answers in a timely manner. Ombudsman services are conducted
by SelectUSA headquarters.
 Examples:
 Connect with a federal agency/ office to seek insight into a specific case
 Offer to facilitate direct communication between the relevant federal agency and the
client, as appropriate
 Identify federal regulations or processes to U.S. policy makers, that may negatively
impact the U.S. business climate
© International Trade Administration 2014
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SelectUSA Case Study:
Lufthansa
• Lufthansa Technik, recently announced plans to
break ground on a new aviation maintenance, repair
and overhaul facility, which will service short-haul and
medium-haul aircraft. The investment is expected to
create up to 400 permanent jobs.
Washington, DC – April 10: Penny
Pritzker, Alejandro Garcia Padilla,
August Wilhelm Henningsen, and Peter
Ammon attend a signing ceremony for
an agreement to create a new
Lufthansa Aviation Facility in Puerto
Rico at German Ambassador Residence
on April 10, 2014 in Washington, DC.
© International Trade Administration 2014
• With the support of Vice President Biden, the White
House National Economic Council, and the President’s
Task Force on Puerto Rico, the SelectUSA team at the
U.S. Department of Commerce worked with the
Puerto Rico team to offer Lufthansa information and
assistance from across federal agencies and
departments that not only assisted in making their
decision but demonstrated why the United States is
the top destination for foreign direct investment.
26
SelectUSA Case Study:
Frulact
Frulact, a Portugal-based producer of fruit-based
preparations for international food companies,
announced their first investment in the United States.
The approximately 200,000-square-foot fruit
preparation and processing plant is slated to open in
late 2014 with approximately 100 employees at full
production.
SelectUSA assisted Frulact and the Southern Idaho
Economic Development Organization (SIEDO) through
providing information and counseling on U.S.
regulations, capital transfer/availability, discussing
potential challenges, and connection to the
Commercial Service in Lisbon as a local resource.
© International Trade Administration 2014
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SelectUSA Can Help
© International Trade Administration 2014
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State Business Incentives
• U.S. states and territories
offer financial and other
incentives to foreign
investors.
• To easily browse state
investment promotion
agencies and learn more
about available incentives,
simply visit selectusa.gov.
© International Trade Administration 2014
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Federal Support Programs and
Incentives
• Similarly, U.S. Government agencies manage many support
programs and business incentives, from tax credits and
grants to visa preference programs.
• SelectUSA maintains an easy-to-use database of specific
programs at selectusa.commerce.gov/investment-incentives.
© International Trade Administration 2014
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Announcing…
The 2015 SelectUSA Investment Summit
March 23-24, 2015, at the Gaylord National Resort and Convention
Center in National Harbor, Maryland near Washington, DC.
Learn about the U.S. investment climate and connect with service
providers and U.S. states and regions.
Sign up for alerts!
http://selectusa.commerce.gov/selectusa-investment-summit
© International Trade Administration 2014
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Q&A
We are your partner for success!
How can we help you?
A Colombian company learns about doing business in Mississippi.
© International Trade Administration 2014
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Thank You
Aaron Brickman
Deputy Executive Director
SelectUSA
U.S. Department of Commerce
Tel: +1-202-482-1889
Aaron.Brickman@trade.gov
SelectUSA.gov
@SelectUSA & #SelectUSA on Twitter
© International Trade Administration 2014
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Appendix:
Additional Data and
Information
© International Trade Administration 2014
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Manufacturing FDI in the United States, 2013
Position: $935.7 Billion
Computers and
electronic
products, 49,352,
5%
Food, 50,983, 5%
Electrical
equipment,
47,310, 5%
Manufacturing FDI Compound Annual Growth Rate, 2009 - 2013
Electrical equipment, appliances, and components
Chemicals
Chemicals,
280,445, 30%
Primary and
fabricated metals,
52,989, 6%
Food
Transportation equipment
Machinery,
87,188, 9%
Transportation
equipment,
110,327, 12%
Machinery
Primary and fabricated metals
Other
manufacturing,
257,135, 28%
Other manufacturing
Computers and electronic products
-5%
0%
5%
10%
15%
20%
•
Chemicals is the largest and second-fastest growing recipient of manufacturing FDI in the United States
•
FDI in electrical equipment, appliances, and components grew at an average annual rate of 24.6 percent
between 2009 – 2013, making it the fastest growing recipient of manufacturing FDI in the United States.
25%
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
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Banking, Finance & Insurance FDI in the United States, 2013
Position: $546.1 Billion
Banking, Finance & Insurance FDI
Compound Annual Growth Rate, 2009 - 2013
Branches & agencies
Insurance
carriers,
172,165,
32%
Banks,
151,678,
28%
Banks
Insurance carriers
Finance,
192,561,
35%
Branches &
agencies,
29,713, 5%
Finance
0%
10%
20%
30%
40%
50%
•
Insurance carriers are the largest recipients of finance FDI in the United States
•
FDI in branches and agencies grew at an average annual rate of 61 percent between 2009 – 2013,
making it the fastest growing recipient of banking FDI in the United States.
60%
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
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FDI in the United States – Other Sectors, 2013
Position: $590.3 Billion
Transportation
and warehousing,
47,776, 8%
Administration,
support, and
waste
management,
35,396, 6%
Other-Sector FDI Compound Annual Growth Rate, 2009 - 2013
Transportation and warehousing
Mining
Other
[Hospitality,
Construction,
Healthcare,
Agriculture,
Other], 59,365,
10%
Miscellaneous services
Holding
companies
(nonbank),
229,895, 39%
Construction
Accommodation and food services
Agriculture, forestry, fishing, and hunting
Utilities
Utilities, 67,441,
11%
Holding companies (nonbank)
Health care and social assistance (N/A)
Support and waste management (N/A)
Mining, 150,386,
26%
0%
2%
4%
6%
8%
10% 12% 14% 16% 18%
•
In other sectors, holding companies and mining firms are the two largest recipients of FDI in the United
States, respectively.
•
FDI in transportation and warehousing grew at an average annual rate of 17.9 percent between 2009 –
2013, making it the fastest growing recipient of other-sector FDI in the United States.
Source: Department of Commerce, Bureau of Economic Analysis
© International Trade Administration 2014
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