The Power of Global Investment in America

Overview of Foreign Direct Investment in the United States 2023

Cumulative FDIUS Reaches $5.3 Trillion

Annual foreign direct investment inflows over the last few years brought total foreign direct investment in the United States to $5.3 trillion by year-end 2022, measured on a historical-cost basis. This is an increase of 33 percent since 2017. The United States was the world’s largest investment destination at the end of 2022.

International companies often prefer the United States to other foreign investment destinations because it offers many advantages. First, and perhaps most importantly, the United States has one of the most open markets and investment climates in the world. Other benefits include:

• an unrivaled consumer market;

•a world-class system of higher education;

• a skilled and productive workforce;

• an entrepreneurial culture of innovation and risk-taking;

• a transparent regulatory environment; and

•the world’s largest capital market.

Cumulative FDIUS

Worldwide Inward Stock of Foreign Direct Investment, 2002 and 2022

United States Faces Intense Competition for Foreign Investment

The United States faces stiff global competition for investment dollars; it accounted for 24 percent of the world’s inward stock of foreign direct investment in 2022, down from 28 percent in 2002. And in 2012, the United States’ share of global FDI was down to just 17 percent. International investment in the United States has since rebounded, but nevertheless it remains behind developing countries and the 27 member states of the European Union. The European Union’s share of worldwide FDI was 25 percent in 2022, shrinking from 31 percent in 2002.

International companies are investing more in developing economies, with their share increasing by 12 percentage points since 2002. The stock of inward investment in these markets is now much higher than in the United States. By the end of 2022, developing economies recorded large gains and claimed 34 percent of worldwide investment stock. Large developing economies, including China, Hong Kong, Indonesia, and Singapore, were among the beneficiaries. International investment in China jumped from three percent of worldwide investment in 2002 to nine percent last year.

2022 Foreign Direct Investment Inflows Are Fourth-Highest of the Decade

International companies invested over $360 billion in the United States last year, the fourth-highest level over the past decade, down 11 percent from investment flows in 2021 and more than three times the flows in 2020, the lowest level since 2012.
Multinational companies headquartered abroad invested more than $480 billion in the United States in 2015 and 2016, more than twice the amount invested in several years this past decade. Foreign direct investment in the United States consists of reinvestment of earnings, equity other than reinvestment of earnings, and debt instruments.

Foreign Direct Investment Flows in the U.S., 2012-2022

Cumulative FDIUS by Country through 2022

Four Countries Account for More Than Half of Cumulative FDIUS

Four countries provided the majority of the $5.3 trillion in cumulative direct investment in the United States by the end of 2022. Japan was the single-largest overseas investor, constituting 15 percent of total cumulative foreign direct investment holdings. Canada overtook Germany last year as the second-largest investor in the United States with 13 percent in FDIUS stock. Until 2018, the United Kingdom was the largest investor in the United States, but it has recently dropped to third position. France replaced Ireland last year for fifth place.

The eight countries shown in the pie chart accounted for nearly three-quarters of total FDI stock in the United States in 2022. More than 100 other countries represented the remainder.

This report shows country data by ultimate beneficial owner, which reflects the actual ownership of a foreign firm in the United States.

The Potency of FDI is Undeniable

Cumulative FDIUS from Leading Countries, 2017-2022

The Fastest-Growing Countries May Surprise You

Of the top 20 countries by cumulative direct investment in the United States at year-end 2022, Denmark saw its stock grow the fastest, more than doubling to $40 billion in 2022 from $18 billion in 2017. Danish wind turbine manufacturer Vestas reported it spent $1.6 billion in 2022 across the U.S. supply chain. Neighboring Sweden doubled its FDIUS stock over the past five years, moving the country up to 10th place from 15th. During the same time period, Germany increased its total investment in the United States by 57 percent, maintaining its fourth position.

Japan was the fourth-fastest-growing country by FDIUS between 2017 and 2022, moving from second to first place. The United Kingdom’s stock of cumulative direct investment in the United States shrank by nine percent from 2017, and its long-held rank of first dropped to third in 2022.
Between 2017 and 2022, Italy, Mexico, and Switzerland each increased its investment stake in the United States by more than 40 percent.

China’s investment dropped by 29 percent over the past five years, making up less than one percent of the $5.25 trillion FDI in the U.S.

More than Half of FDIUS Comes from European Investors

Cumulatively, Europe was the largest regional investor in the United States. It made up 55 percent of all foreign investment through 2022. These figures include the 27 European Union (EU) countries and other European nations with investment stakes in the United States, such as the United Kingdom, Switzerland, and Norway.

The Asia and Pacific region was second, accounting for about a fifth of FDI stock in the United States through 2022, while Canada held 13 percent, ahead of several regions.

In 2022, South and Central America held two percent of FDI stock in the United States while the Caribbean and Atlantic Islands and the Middle East each held about 1.5 percent. Mexico was the largest investor from these regions through 2022, while FDI stock from Bermuda dropped to $39 billion. Investment from Africa remained tiny at $8 billion at the end of 2022, with South Africa accounting for the lion’s share of the continent’s cumulative direct investment in the United States.

Cumulative Foreign Direct Investment in the U.S. by Region, 2022

Retail Trade Is Fastest-Growing Industry Segment

Of the largest industries, cumulative foreign investment in America’s retail trade sector grew the fastest, with growth topping 130 percent to $189 billion in 2022 from $82 billion in 2017. Two subsectors, food and beverage stores as well as health and personal care stores, added tens of billions of dollars in foreign direct investment stock over the past five years, suggesting large acquisitions in those sectors.

Cumulative FDIUS in the real estate and rental and leasing sector grew more than 60 percent during the same period.

Bucking the trend of growth between 2017 and 2022, banking was the sole industry to experience a divestment, shedding several billion dollars in foreign direct investment.

Cumulative FDIUS by Industry, 2017-2022

Manufacturing Accounts for More Than 40 Percent of Inward Investment

International companies are attracted to all sectors of the U.S. economy. At $2.2 trillion in 2022, manufacturing accounted for 42 percent of total foreign direct investment stock. Because the United States has the world’s largest and most liquid financial markets, international companies, on a cumulative basis, have invested heavily in the U.S. finance and insurance industries, at $558 billion by year-end 2022, though it shrank by more than 10 percent from 2021.

Wholesale trade accounted for 10 percent of total foreign direct investment at the end of 2022. The information sector received nearly $280 billion in cumulative foreign direct investment through 2022, followed by professional, scientific, and technical services. Real estate and banking each received more than $200 billion through 2022, while international companies invested nearly $190 billion in retail.

Cumulative FDIUS by Industry 2022

Chemical Sector Represents Nearly 40 Percent of Manufacturing FDIUS

International firms invested heavily in the U.S. manufacturing sector. Chemicals garnered $841 billion in total FDI stock by the end of 2022, representing 38 percent of all foreign investment in domestic manufacturing. International companies spend billions annually in the U.S. chemicals industry because it boasts a highly educated workforce, world-class research centers, strong intellectual property protections, and a robust regulatory system. Nearly two-thirds of all FDI stock in U.S. chemicals was in pharmaceuticals and medicines.

Multinational companies invested almost $200 billion in the U.S. transportation equipment sector by year-end 2022, mostly in the production of motor vehicles, bodies and trailers, and parts. International investment in the beverages and tobacco products segment was the third-highest in manufacturing at more than $190 million.

Computers and electronic products attracted the fourth-largest international investment, at close to $190 billion through 2022.

Cumulative FDIUS in Manufacturing, 2022

FDIUS in Semiconductor Manufacturing Up Significantly Since 2017

International investment in the U.S. semiconductors and other electronic components sector has seen solid growth over the last five years at 66 percent. Semiconductors play an integral role in all aspects of modern life because they operate as the computing brains not only for computers, but also for household appliances, medical devices, automobiles, and many other industries. Foreign-headquartered semiconductor companies’ recent investments in the United States has translated into more than 60,000 well-compensated American jobs.

International investments in this crucial U.S. industry will be bolstered with the recent enactment of the CHIPS and Science Act. The new law includes grants, research investments, and an investment tax credit aimed at strengthening domestic chip manufacturing.

Over the next few years, BEA reported more than $50 billion in planned FDIUS expenditures were announced in the semiconductor sector in 2022. Foreign chipmakers, such as Taiwan Semiconductor Manufacturing Company and Samsung, aim to increase their U.S. fabrication capacities and construct new multibillion dollar chip facilities in the United States.

Cumulative FDIUS in Semiconductor Manufacturing, 2017-2022