Foreign direct investment (FDI) in the USA

1Foreign direct investment in the USA: the position

The United States is the world's largest destination for foreign direct investment, and its lead keeps growing. According to the U.S. Bureau of Economic Analysis, the foreign direct investment position in the USA stood at $5.864 trillion at the end of 2025 (historical-cost basis). That is an increase of $266 billion over the previous year.

How the position has developed over six years, in billions of dollars:

Source: U.S. Bureau of Economic Analysis, Foreign Direct Investment in the U.S.: Direct Investment Position Data, as of July 28, 2026.

Two more figures from the same survey put this in context: financial transactions by foreign direct investors came to $247.8 billion in 2025, while their income from US holdings reached $310.1 billion. In other words, foreign capital earns more in the USA each year than the amount of new money flowing in.

2Who invests, and how much of it is new build

The most important distinction first, because most write-ups leave it out. In a second, annual survey, the BEA tracks exactly what foreign investors spend their money on in the USA. In 2025 the total was $232.2 billion, split as follows:

• $218.4 billion in acquisitions of existing US companies
• $4.6 billion in new establishments
• $9.2 billion in expansions of existing establishments

So roughly 94 percent of all foreign direct investment in the USA is company acquisitions, not new ventures. If you are a European entrepreneur forming and building a US company, you belong to the remaining six percent. Which states get how much of it is covered in our overview of the 10 most popular US states for foreign direct investment.

On the source side, Japan led in 2025 with $50.5 billion in new expenditures, followed by Germany with $26.7 billion and Canada with $23.5 billion. Europe accounted for $116.6 billion, or 50.2 percent of the total.

3Position by country

Foreign direct investment position in the USA at the end of 2025, by country of the immediate parent company, as a share of the $5.864 trillion total:

Source: BEA, Direct Investment Position by Country, data year 2025.

One point on reading this that matters in practice: the table ranks by immediate parent company. When the BEA counts by ultimate beneficial owner instead, meaning the group the money really belongs to in the end, the picture shifts noticeably: Japan leads with $827 billion, Canada is in position 2 with $820 billion, and Germany is in position 3 with $706 billion. The Netherlands and Luxembourg drop back, because many holdings are only routed through them. German groups, for example, often hold their US subsidiaries through intermediate companies. German investors also posted the largest increase in 2025, up $49 billion.

4Position by industry

Position at the end of 2025 by industry of the US affiliate:

Source: BEA, Direct Investment Position by Industry, data year 2025.

A third BEA survey shows how much industrial America relies on foreign capital: majority foreign-owned US affiliates employed about 8.57 million people in the USA in 2024, or 6.1 percent of all private-sector employment. The focus is on manufacturing and retail, and the largest employers come from the UK, Japan and Germany. These figures were published on July 10, 2026.

According to BEA statistics, the limited liability company (LLC) is the most popular entity type among foreign investors. Well-known foreign companies with a US presence include Volkswagen, BMW, Siemens, BASF, Airbus, Rolls-Royce, Bridgestone, Michelin, Unilever and Shell. To choose the right entity for your plans, see our entity comparison.

5What to keep in mind when investing in the USA

5.1Strengths of the USA for foreign direct investment

• The world's largest consumer market, with about 342 million people (Census, as of July 1, 2025)
• Leadership in research and development
• A flexible, responsive labor market where hiring and letting people go can happen quickly
• High-quality, accessible official statistics, so you can back up location decisions with hard data
• The dollar as the world's reserve currency
• Low energy prices by international standards, driven by domestic oil and gas production
• Regional clusters that appeal to foreign investors, meaning concentrations of companies in the same industry in one region
• Legal certainty through predictable contract and corporate law at state level

5.2Weak spots of the USA for foreign direct investment

• A highly competitive market with consumers used to plenty of choice and little brand loyalty
• Tariffs and trade policy have been shifting sharply since 2025; cost calculations for imported inputs need constant review
• High national debt and a correspondingly fragile interest rate environment
• A polarized political landscape with erratic regulation
• Large socioeconomic gaps between regions and population groups
• Infrastructure in need of repair in places outside the growth regions
• Healthcare costs as a major expense for employers, see our page on the average US health insurance premium

5.3Government review of foreign investment: where things stand

Foreign direct investment in US companies is reviewed for national security risks by the Committee on Foreign Investment in the United States (CFIUS). The legal basis is the Foreign Investment Risk Review Modernization Act (FIRRMA) of 2018, whose implementing regulations took effect in February 2020. Since then, certain investments in critical technologies, critical infrastructure and sensitive personal data have been subject to mandatory filing.

What's new, and relevant for European investors, is the change of direction since 2025. The America First Investment Policy Memorandum, announced in February 2025, explicitly distinguishes between investors from allied countries and those from countries classed as adversaries, including China, Russia, Iran, North Korea, Cuba and Venezuela. For the first group, reviews are meant to get faster. To that end, the US Treasury announced a "Fast Track" pilot program on May 8, 2025, and in February 2026 published a draft Known Investor Program: investors submit their details in advance through a portal so later filings are leaner and quicker.

This relief has clear limits. It is not a blanket approval. Investments in critical technologies, critical infrastructure and personal data still get full scrutiny, even from investors in allied countries. For a typical European small or mid-sized company entering the market, CFIUS is rarely an issue anyway: if you set up your own new operation instead of acquiring an existing US company, you generally won't trigger a review.

On the other side, SelectUSA, a US Department of Commerce program, actively courts investment that creates jobs in the USA and connects investors with state economic development agencies.

6Protection of foreign investment

The USA has signed a number of bilateral investment treaties. The current status is tracked by UNCTAD in its Investment Policy Hub, where you can check whether each treaty is signed, in force or terminated. Many European countries are tied to the USA not by modern investment treaties but by older treaties of friendship, commerce and navigation, which matter more in practice than they sound: they are also the basis for nationals of those countries being able to apply for the E-2 investor visa. You'll find an overview of all treaty countries in our list of E-2 treaty countries.

In disputes, international arbitration bodies can help:

1. ICC: the International Court of Arbitration of the International Chamber of Commerce
2. ICSID: the World Bank Group's International Centre for Settlement of Investment Disputes

The USA is also a founding member of the Multilateral Investment Guarantee Agency (MIGA), which insures against political risk.

For small and mid-sized businesses, though, what really matters in practice isn't international law but your choice of state, legal structure and contracts. Learn more under Product liability in the USA, Legal certainty for small and mid-sized businesses and Protecting intellectual property.

7What these numbers mean for your market entry

The current data points to three takeaways for a mid-sized venture.

• You're the exception, and that's a good thing. Because 94 percent of foreign capital goes into acquisitions, the market for buying companies is expensive and crowded, while building your own operation gets relatively little attention. States that want new businesses actively court them and offer incentives.
• The focus is on industry. 42.8 percent of the investment position is in manufacturing, plus 9.1 percent in wholesale trade. If you come from manufacturing, supply or technical trade, you'll find an environment that understands your industry.

8Key procedures for foreign direct investment

The reporting requirement for foreign direct investment goes back to the International Investment and Trade in Services Survey Act; the data is collected by the Bureau of Economic Analysis, which sends out mandatory survey forms. If you form a US company with a foreign owner, you may have a filing obligation without knowing it, because the form goes to the US address. We check this with every formation.

On top of that, every state has its own rules, and industry-specific licenses depend on what your business does. Since March 2025, companies formed in the USA have been exempt from reporting under the Corporate Transparency Act; only foreign companies registered in a state still have to report.

If you're planning your US market entry, you'll find the individual steps under Expanding successfully into the USA and the tax side under Tax considerations for market entry.

Data sources: U.S. Bureau of Economic Analysis, Direct Investment Position Data (data year 2025, as of July 28, 2026); BEA, New Foreign Direct Investment in the United States 2025 (published June 10, 2026); BEA, Activities of U.S. Affiliates of Foreign Multinational Enterprises 2024 (published July 10, 2026); U.S. Census Bureau, population estimate as of July 1, 2025. The World Bank Doing Business figures previously shown here have been removed: the World Bank discontinued the series in 2021, and its successor, B-READY, publishes no comparable overall ranking.

In short

• The stock of foreign direct investment in the USA stood at $5.864 trillion at the end of 2025, $266 billion more than the year before.
• Of the $232.2 billion in new spending in 2025, around 94 percent went to acquisitions, with only a small remainder going to new operations and expansions.
• CFIUS reviews investments for security risks; if you set up your own new operation, you generally won't trigger a review.
• Many European countries have older treaties of friendship, commerce and navigation with the USA, which are also the basis for the E-2 visa.

How we help you

• US market entrySubsidiary, staff, taxes: your start in the US market.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• Tax structureA clean structure between parent company and US subsidiary, or between you and your US company, coordinated with your accountant.
• US Company FormationLLC, Inc or LP in Delaware, Florida, California, New York, Texas or Wyoming.
• Company formation consultationEntity type, state and tax consequences, before you commit.