According to recent data, the United States is the top destination of foreign direct investment (FDI) globally. Through acquisitions, opening establishments, or expansion of existing ones, foreign firms invested a total of $177 billion in the United States in 2022. With its workforce, legal protections, and encouragement of innovation, the United States continues to be an attractive destination for business investment. Leveraging data from the U.S. Bureau of Economic Analysis (BEA), this Department of Commerce, Office of the Under Secretary for Economic Affairs (OUSEA) report covers aggregate FDI trends into the United States and provides analysis by industry, country, and geography.^[1]  

Key Findings:

Inward FDI

• Though the inward FDI position in the U.S. continues to increase (valued at $5.5 trillion in 2023), the rate of increase of new FDI into the U.S. ($177.5 billion in 2022) has been generally declining.
• Both the inward FDI position in the U.S. and new FDI are concentrated in manufacturing; chemical manufacturing (and in particular, pharmaceutical and medicines) accounts for the largest share.
• Both the inward FDI position and new FDI by ultimate beneficial owner country are concentrated among a handful of advanced economies. In both cases, the top ten investor countries account for about 80% of the total.
• In 2022, California and Texas account for the largest shares of new FDI and together account for about 30% of total new FDI.
• The rate of return on FDI in the U.S. was 5.3% in 2023 while the average return was about 5% over the past ten years.

Greenfield investment

• Greenfield investment, defined as establishing or expanding a foreign owned U.S. business, totaled $8.1 billion and accounted for 4.6% of new FDI in 2022.
• Manufacturing greenfield investment increased by $4 billion between 2021-2022 to $5.3 billion and is 66% of total greenfield investments in 2022.

Majority-owned U.S. affiliates of foreign multinational enterprises (MOUSA)

• The ultimate beneficial owners of most MOUSAs are in Europe, followed by Japan and Canada in 2021.
• MOUSAs are relatively concentrated in manufacturing industries, particularly chemicals and transportation equipment. They employ nearly a quarter of all workers in manufacturing and contribute nearly one fifth of manufacturing value added as of 2021.
• MOUSA tend to be in more research and development (R&D) -intensive and capital-intensive industries, accounting for their higher contribution to private industry sector R&D, property, plant, and equipment (PP&E), and value added relative to their share of private industry employment in 2021.
• South Carolina, Michigan, and New Hampshire have the highest shares of MOUSA employment in 2021.

^[1] Section 3 of the Foreign Direct Investment and International Financial Data Improvements Act of 1990, Public Law 101-533, as amended (codified at 22 U.S.C. 3142) includes a provision for DOC to annually report on the role and significance of foreign direct investment in the United States.