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U.S. Department of State

Diplomacy in Action

The State Department, Open Investment, and American Jobs

Fact Sheet
Bureau of Economic, Energy and Business Affairs
Washington, DC
October 6, 2009


Foreign direct investment (FDI) is an important source of economic growth and job creation in the United States and around the globe. It is vital to U.S. prosperity.

In the past decade, the stock of U.S. direct investment abroad has more than tripled (increasing from $1 trillion in 1998 to $3.2 trillion in 2008). The stock of FDI in the United States totaled $2.3 trillion (about 15.8% of U.S. GDP in 2008).

  • In 2006, FDI directly or indirectly contributed to 9.3% of U.S. GDP ($1.25 trillion).
    • Inbound FDI totaled $237.1 billion (1.8% of GDP). Mergers and acquisitions of existing U.S. firms accounted for the vast majority (90%) of new FDI outlays in 2006.
    • U.S. companies earned $322.6 billion from overseas direct investments and remitted $101.7 billion (0.8%) of GDP) to U.S. parent firms in the form of dividends.
    • 19.5% of U.S. exports ($200 billion, 1.5% of GDP) were shipped to foreign subsidiaries of U.S. firms.
    • Nearly 20% of U.S. exports ($204billion, 1.6% of GDP) were shipped from U.S. affiliates of foreign firms.
    • U.S. affiliates of foreign firms spent $395.8 billion (3.1% of GDP) compensating U.S. employees and $37.8 billion (0.3% of GDP) on research and development. Foreign affiliates also reinvested $69 billion (0.5% of GDP of their earnings in the U.S. economy.
  • U.S. exports support millions of American jobs. About 19.9% of all jobs in America’s manufacturing sector depend on exports.
  • In 2006, U.S. affiliates of foreign companies employed 5.3 million Americans.

The United States has a significant stake, as both the world's largest source and recipient of foreign direct investment, in working with our economic partners both multilaterally and bilaterally to implement policies that facilitate global investment flows. The State Department encourages nondiscriminatory, open, and market-oriented environments for U.S. investment abroad through a wide range of bilateral and multilateral initiatives, including the Organization for Economic Cooperation and Development (OECD) Freedom of Investment project, the G-8 Heiligendamm process, the UN Conference on Trade and Development (UNCTAD), and the Asia-Pacific Economic Cooperation forum (APEC). State and the Office of the United States Trade Representative share negotiation of bilateral investment treaties (BITs) that establish rules that protect the rights of American investors abroad and provide market access for future American investment. The State Department also works closely with the Commerce Department’s Invest in America program, which promotes foreign direct investment to the United States.

An open investment climate helps ensure that American citizens continue to reap the benefits associated with inward investment. Through its role as a member of the Committee on Foreign Investment in the United States (CFIUS), the inter-agency panel which reviews the national security implications of certain cross-border mergers and acquisitions (M&As), the State Department and other CFIUS agencies seek to ensure protection of U.S. national security interests while maintaining an open environment for international investment. In 2008, CFIUS concluded action on more than 150 transactions, reflecting over $200 billion in inward U.S. investment.

Sources: U.S. Department of State and U.S. Department of Commerce

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