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Business Incentives Continue to Play a Key Role in U.S. FDI Leadership

The following is a cross-post from Tradeology, the official blog of the International Trade Administration (ITA)

Global companies are drawn to the United States for many reasons: a highly productive and educated workforce, low-cost supply of energy, direct access to the world’s most robust capital markets, and much more. But how much of our nation’s continued success in this arena should be attributed to incentives given to businesses by state and local governments? They receive a great deal of attention, but how much do companies actually consider incentives when determining where to invest?

Business executives are quite forthcoming with answers to the question. Many of the companies that SelectUSA has assisted have made it clear: incentives are a very important consideration, but not the most important one. Companies consider a mix of variables and factors: costs, location, supply chains, ease of doing business, etc. Consistently, the United States stands out as the best place to do business.

The United States has topped the A.T. Kearney FDI Confidence Index seven years in a row. The Index, a survey of global CEOs’ confidence in the world’s markets, highlights the top factors considered in business expansion and how markets stack up. In 2019, pro-business regulations, competitive tax rates, and economic expansion helped lead to another year of U.S. leadership in international investment. But economic incentives were also ranked among the top of the list of considerations.

State and local governments create incentives packages for companies in order to attract investment and create job opportunities in their local areas. Often given on the basis of job creation or economic impact, incentives can include grants, loans, tax and job training subsidies. These incentive packages can sometimes total in the millions or billions of dollars, but their size is contingent on the magnitude of the proposed business project. The federal government also offers a wide array of incentives, from clean energy production tax credits to export credit insurance for small businesses.

The investment process itself can seem complicated, and many companies don’t know where to start. Luckily SelectUSA is here to help companies navigate the process and connect with the right resources and incentives at the local level. Visit selectusa.gov to learn more. The United States is open for your business.

SelectUSA is a program led by the U.S. Department of Commerce that facilitates and promotes job-creating business investment into the United States.

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