Foreign Investment in the U.S. by Country: Who Invests Most and What It Means

You see ‘Made in America’ on a Honda, shop for groceries at Aldi, and use soap from Dove. While these feel like everyday American, German, or British products, the real story is much bigger. Each one is a direct result of foreign investment, a multi-trillion-dollar force that channels money from other countries into the U.S. economy, shaping what we buy and where we work.

But not all foreign investment is created equal. Think of the crucial difference between Foreign Direct Investment (FDI) and Portfolio Investment this way: FDI is like buying a house to live in, manage, and improve. It’s a long-term, hands-on commitment, like when Germany’s BMW builds a factory in South Carolina. Portfolio Investment, on the other hand, is more like buying a few bricks in someone else’s house—an investor in France buying shares of Microsoft stock owns a piece but isn’t involved in running the business.

Our focus here is on FDI because it’s the investment that builds new facilities, opens storefronts, and directly supports jobs in communities across the country. Knowing what FDI is and which nations are the biggest players reveals how the global economy connects to your own backyard.

Who Are the Top 5 Countries Investing in America?

When we think about foreign investment in the U.S. by country, a few key players might come to mind. But to get the real story, we can look at official data from the U.S. Bureau of Economic Analysis (BEA). This government agency tracks these massive, long-term investments, and the results can be surprising. While some countries on the list are predictable, others show just how globally connected the American economy has become.

So, which country invests the most in the USA? Based on the latest BEA foreign direct investment statistics, here are the top five and a glimpse of their impact:

• 1. Japan: A leader in manufacturing, funding huge automotive plants for brands like Toyota and Honda across the country.
• 2. Canada: Our northern neighbor is a major investor in crucial sectors ranging from finance to energy.
• 3. Germany: Known for precision engineering, with investments including car factories (BMW) and popular grocery chains (Aldi).
• 4. United Kingdom: A historic partner whose companies, like Unilever, are behind many everyday products on U.S. shelves.
• 5. Ireland: A modern powerhouse, especially in the pharmaceutical and technology industries.

These examples highlight a few key areas, but the investment is spread across many different parts of the economy.

Beyond Cars and Groceries: What Industries Attract the Most Foreign Capital?

While a new Toyota plant or an Aldi store is easy to spot, the full picture of foreign investment is much broader. This money flows into nearly every corner of the U.S. economy, but three sectors consistently attract the lion’s share of capital. Topping the list is Manufacturing, which goes far beyond cars to include the creation of everything from pharmaceuticals to electronics and industrial machinery. These investments build the factories that make both finished goods and the essential components that American companies use in their own products.

Following manufacturing are two less visible but equally powerful sectors: Finance & Insurance and Wholesale Trade. Investment in finance means foreign-owned banks and insurance companies are operating on U.S. soil, helping manage money and risk for American families and businesses. Wholesale trade, on the other hand, is the critical “business-to-business” link in the supply chain. This involves foreign firms running the vast distribution networks that move goods from ports and factories to the retail stores where you shop every day.

Together, these three areas show that foreign investment isn’t just about the products we buy. It’s a fundamental part of the industrial and logistical backbone of the entire country, creating jobs and infrastructure that support countless other businesses. This begs the question: why do so many global companies view the United States as such a reliable and profitable place to invest?

Why Do Global Companies Bet Billions on the U.S. Market?

It’s a decision that boils down to a powerful combination of opportunity and security. First and foremost, foreign companies are drawn to the massive U.S. consumer market—over 330 million people with significant spending power. Investing here gives them direct access to one of the wealthiest customer bases on the planet. Beyond the market’s size, the United States offers a stable political system and a predictable legal framework that protects property and investments, reducing the risks that can derail projects in other parts of the world.

These foundational strengths are bolstered by active government support. The U.S. rolls out the welcome mat for global businesses through programs like SelectUSA. This federal initiative acts as a guide, helping international firms navigate regulations and connect with state and local economic development organizations. By simplifying the complex process of setting up shop in a new country, programs like this make the U.S. an even more attractive and accessible destination for foreign capital.

This combination of a strong market, a stable environment, and official support makes building in America a calculated business decision, not a blind gamble. When a company like South Korea’s LG decides to build a new battery plant in Arizona, it’s because these factors align to promise success. But the impact of that decision goes far beyond the factory’s walls, setting off an economic ripple that creates a web of new opportunities.

How a Foreign-Owned Factory Creates a Ripple of American Jobs

When that new LG battery plant opens its doors in Arizona, the most visible impact is immediate: it hires hundreds or even thousands of Americans for well-paying manufacturing, engineering, and management positions. These are the direct jobs—the first and most obvious wave of opportunity. This initial hiring surge is the primary reason local governments work so hard to attract this kind of long-term investment, as it provides a direct and substantial boost to the local payroll.

The benefits of foreign direct investment for jobs, however, don’t stop at the factory gate. That new facility creates a powerful ripple effect. It needs raw materials from local suppliers, security from a nearby firm, and transportation from regional trucking companies, creating a second wave of indirect jobs. Then, all those new employees—from both the factory and its suppliers—spend their paychecks at local restaurants, grocery stores, and car dealerships. This spending supports a third wave of jobs, strengthening the entire community’s economic foundation.

Historical FDI trends in the United States show this process is a key driver of prosperity. In fact, according to SelectUSA, foreign-owned firms now employ over 8 million Americans. But does this mean any company can invest however it wants? Not quite, as the U.S. has specific rules to ensure these partnerships are secure and beneficial.

Is It a Free-for-All? A Quick Look at U.S. Investment Rules

While the U.S. is one of the most welcoming countries for investment, it doesn’t just hand over the keys without a check. For certain deals, especially those involving critical infrastructure, advanced technology, or sensitive personal data, the government performs an investment screening. This is simply a review to ensure a proposed investment doesn’t create a risk to national security, ensuring that openness doesn’t come at the cost of safety.

This screening process is handled by a special government group: the Committee on Foreign Investment in the United States (CFIUS). Think of it as a security review team whose job is to examine proposed investments to prevent foreign control over a business that could compromise American security. For example, the CFIUS review process would look very closely at a foreign company attempting to buy a U.S. firm that manufactures sensitive military components.

For the vast majority of foreign companies, however, these regulations aren’t a major hurdle. The U.S. successfully balances its open-door policy with these necessary safeguards. This careful approach ensures that the investment flowing into our communities is both productive and secure, allowing Americans to enjoy the benefits—from innovative products to new jobs—that come from being a global economic hub.

The Global Brands in Your Backyard: What Foreign Investment Means for You

What was once an abstract economic headline is now a visible part of your daily life. The journey of capital from countries like Japan and the UK becomes a tangible part of the US economy, connecting global finance to local jobs.

The next time you shop at an Aldi, see a Shell gas station, or drive a Honda with a “Made in America” sticker, you’ll know the story behind it. The economy isn’t something that just happens to us; it’s a visible network we can understand. You no longer just see a local business; you see your community’s vital role in a global story and can recognize its place on the world stage.