US needs to do more to attract foreign direct investment: UHY study

The country that tops the chart is Belgium, which has been particularly innovative in its tax legislation to attract international companies, according to the study. Belgium, for instance, has generous tax breaks for R&D and investment in capital goods, as well as fiscal incentives for employment.

Singapore, No 2 on the chart, is the best-performing Asian country in the study. UHY explains that several countries, such as Ireland and Singapore, have been "enormously" successful in setting up favorable tax and regulatory environments that have encouraged companies to establish regional headquarters.

Global firms like Yahoo, Google, Apple, PayPal and LinkedIn all have European headquarters in Ireland, and Asian headquarters in Singapore.

"Free trade is a very strong determinate in the success of attracting FDI," said David. "If our economy continues to expand, the demand for products and services will continue to increase and often, foreign-based entities step in to meet the demand."

Winning foreign direct investment provides an important boost to national economies, creating new jobs and tax revenues in the short term, and in the longer term improving productivity by helping to fund capital investment and making domestic companies more competitive, the study says.

Chinese investment in the US has been on the rise. It doubled last year to $14 billion, driven by large-scale acquisitions in food, energy and real estate, according to research firm Rhodium Group.

"As one of our largest trading partners, Chinese-owned entities play a significant role in FDI in America," David said.

"As they become better known to ourmarketplace and develop additional knowledge of the US-based customer, their market share can only increase," he added.

Contact the writer at yuweizhang@chinadailyusa.com.

(China Daily USA 02/20/2014 page2)