Expanding your business to the United States Malaysian SME Delegation October 16, 2014 Aaron Brickman Deputy Executive Director SelectUSA © International Trade Administration

Agenda I. Introductions II. Overview of FDI Trends III. U.S. Business Climate IV. About SelectUSA Services V. Q&A 2 © International Trade Administration 2014

I. Introductions SelectUSA 3 © International Trade Administration 2014

II. Overview of FDI Trends SelectUSA 4 © International Trade Administration 2014

Global FDI Trends 22 largest country recipients by FDI stock in 2013; Currency displayed at current market value. Source: UN Conference on Trade and Development The United States remains the largest recipient of FDI in the world. USD Millions $4.9 Trillion © International Trade Administration

U.S. FDI Trends Top 15 FDI Growth Markets, 2013 Note: Figures denote 5 year compound annual growth rate ( ) of the stock FDI position and the total stock of FDI in the United States Source: Department of Commerce, Bureau of Economic Analysis – FDI by Ultimate Beneficiary Owner © International Trade Administration % | $202m 29.1% | $41.0b 14.7% | $48.6b 41.54% | $8.0b 29.34% | $11.0b 24.11% | $1.5b 21.72% | $31.5b 19.6% | $14.9b 15.6% | $5.2b 14.6% | $2.0b 14.3% | $3.6b 34.6% | $23.8b 20.8% | $140.1b 18.9% | $2.0m 15.2% | $21.2b 36.6% | $202m 29.1% | $41.0b 14.7% | $48.6b 41.54% | $8.0b 29.34% | $11.0b 24.11% | $1.5b 21.72% | $31.5b 19.6% | $14.9b 15.6% | $5.2b 14.6% | $2.0b 14.3% | $3.6b 34.6% | $23.8b 20.8% | $140.1b 18.9% | $2.0m 15.2% | $21.2b 36.6% | $202.0m 29.1% | $41.0b 14.6% | $48.6b 41.5% | $8.0b 29.3% | $11.0b 24.1% | $1.5b 21.7% | $31.5b 19.6% | $14.9b 15.6% | $5.2b 14.6% | $2.0b 14.3% | $3.6b 34.6% | $23.8b 20.8% | $140.1b 18.9% | $2.0m 15.3% | $21.2b Fastest Growing Sources of FDI in the United States by Compound Annual Growth Rate (CAGR) RankMarket 2013 Stock million USDCAGR 1China8, % 2Hungary % 3Luxembourg23, % 4India11, % 5Norway40, % 6Malaysia1, % 7Korea, Republic of31, % 8Switzerland140, % 9Brazil14, % 10Malta218.92% 11Venezuela5, % 12United Arab Emirates21, % 13Sweden48, % 14Colombia2, % 15South Africa3, % 6

FDI in the United States by Industry, 2013 Largest Recipients by Position © International Trade Administration 2014 Manufacturing is the largest recipient of FDI in the United States, accounting for more than one-third of total position. Finance & Insurance and Banking are the second largest recipients, accounting for 20 percent of total FDI position. Other industries include agriculture and forestry, mining, utilities, construction, transportation & warehousing, and more. Official data on FDI in the United States now showcases real estate and rental/leasing as an independent category, accounting for two percent of total position. Source: Department of Commerce, Bureau of Economic Analysis 7

FDI in the United States by Industry Growth in Selected Sectors, © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis 8

Manufacturing FDI in the United States, 2013 Position: $935.7 Billion © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis 9

FDI in the United States – Other Sectors, 2013 Position: $590.3 Billion © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis 10

Source: fDimarkets.com Total number of projects: 23 ; Total capex: $308 million ; Total jobs created: 1,528 Other Includes: Chemicals, Food & Tobacco, Industrial Machinery, Equipment & Tools, Medical Devices, Metals, Plastics, Rubber U.S.-Malaysia FDI Relationship © International Trade Administration

III. U.S. Business Climate SelectUSA 12 © International Trade Administration 2014

U.S. Open Investment Policy Upheld by administrations throughout U.S. history. Core obligation in bilateral investment treaties (BITs). Ensures investors and investments receive treatment no less favorable than a country affords to its own investors and investments. © International Trade Administration 2014 “The United States reaffirms our open investment policy, a commitment to treat all investors in a fair and equitable manner under the law.” -Statement by the President of the United States, June 20,

World Economic Forum’s Global Competitiveness Rankings Hong Kong: #7Japan: #9China: #29 AT Kearney’s 2014 FDI Confidence Index China: #2 Germany: #6 UK: #4 #1 #5 IESE Business School’s 2013 Venture Capital and Private Equity Index Canada: #2 UK: #3 Japan: #4 World Bank’s Ease of Doing Business 2013 Ranking Singapore: #1 Hong Kong SAR: #2 New Zealand: #3 U.S. Business Climate AT Kearney 2014 FDI Confidence Index RankMarketΔ United States - 2 China - 3 Canada+1 4 United Kingdom+4 5 Brazil-2 6 Germany+1 7 India-2 8 Australia-2 9 Singapore+1 10 France+2 Source: AT Kearney, 2014 #1 #4 14 © International Trade Administration 2014

1. Office of the U.S. Trade Representative; Central Intelligence Agency – The World Factbook; and Credit Suisse survey; 2 National Science Foundation Science and Engineering Indicators 2010; Kauffman Index of Entrepreneurial Activity ; 3. U.S. Patent and Trademark Office; 4. The Times Higher Education Report (U.K.); 5. OECD Labor Productivity Statistics Source: National Science Foundation Science and Engineering Indicators 2010 Strategic Market & FTAs Population of U.S. and FTAs is 695 million; U.S. 42% of Global Consumer Goods Market 1 Center for Global Innovation and Entrepreneurship U.S. Responsible for 36% of Total World R&D Expenditures (EU-27 accounted for 24%); Average 558,000 new businesses created per month in Strong Intellectual Property Right Protections 50.1%of the Patents Granted in 2009 by the U.S. Patent Office Originated from a Foreign Country 3 A Leader in Higher Education 15 of the top 20 universities in the World (Europe has 4 of the top 20) 4 Productive Workforce U.S. labor productivity grew 2.3% in 2009 (France: -1%, Germany: -2.3%, UK: -2.5%) 5 Open to People, Cultures, and Ideas © International Trade Administration U.S. Business Climate

Low Manufacturing Costs By 2015, average U.S. manufacturing costs estimated to be 21 percent lower than Japan, and 15% lower than France and Germany Productive & Skilled Workforce 41 percent of U.S. workforce between ages 25 – 64 attain higher level education Over 1.5 million U.S. manufacturing workers are classified as high-skilled Labor Cost & Flexibility 2015 productivity-adjusted wages are projected to be 1.3 – 1.9 times lower than developed labor markets like France, Germany, Italy, Japan, and UK Labor market flexibility in U.S. greater than most other OECD countries Input Costs The cost of energy has significantly declined, lowering input costs like utilities, processing, raw materials, and logistics Underutilized ports lower shipping costs for U.S. manufacturers Policy Support Several federal initiatives/ programs to support manufacturing Make it in America Challenge (EDA) NIST –MEP program Sources: Boston Consulting Group, September 2012; U.S. Department of Commerce Office of Manufacturing and Services Source: Hyundai Motor Manufacturing Alabama U.S. Manufacturing Resurgence © International Trade Administration 2014

Sources: 1. Boston Consulting Group 2. IEA—World Energy Outlook Business Day Live (SA Newspaper) 4. SelectUSA Source: Sasol Domestic energy production revolution 1 Driven by Shale gas discovery and development 10 trillion cubic feet projected to be produced by 2030 U.S. features existing pipelines and other infrastructure (vs. China) A global energy player 2 Estimated to overtake Saudi Arabia in oil production by around 2020 Estimated to overtake Russia in gas production around 2015 Dramatic decline in prices 3 Prices set locally, rather than globally 1/2 to 1/3 of cost compared with Japan, Italy, Germany Significant impact on industrial energy prices as well (with positive outcomes for industry) Dramatic investment successes 4 Johannesburg-based Sasol Limited announced plans to establish a Gas-to-Liquids plant in Louisiana Expectation of follow-on investment in related chemicals manufacturing Total project investment $21 billion Expectation that project will create 1,200 permanent jobs and 7,000 temporary jobs Sasol has stated its active exploration of the U.S. market for the company’s future growth in areas like petrochemicals and fertilizer manufacturing. U.S. Strengths in Oil & Gas

The United States has the most productive workforce among the world’s largest economies Source: Bureau of Labor Statistics © International Trade Administration Productive Workforce

The advanced legal system in the United States provides transparency, predictability, and flexibility. This system resolves disputes quickly, often before significant expense is incurred. It also makes the United States the world’s leader in protecting intellectual property rights. © International Trade Administration Transparent Legal System and IPR Protection

IV. About SelectUSA SelectUSA 20 © International Trade Administration 2014

Nature of Investing in the United States: State, Local & Regional EDO s Regional LocalState © International Trade Administration

About SelectUSA Housed in the U.S. Department of Commerce, SelectUSA’s mission is to promote and facilitate business investment in the United States. It is housed in the U.S. Department of Commerce and represented by the Commercial Service at U.S. Embassies and Consulates across 72 worldwide markets. SelectUSA is geographically neutral and represents the entire United States. It uphold the U.S. open investment policy and performs uniquely federal functions. Our Clients: Companies (investors) U.S. States, Regions, and Cities Current Personnel & Teams Investment Policy and Promotion Communications and Outreach Operations and Planning 22 © International Trade Administration 2014

SelectUSA Can Help Key SelectUSA Services Offered to Companies: Information and Counseling: We provide subject-matter expertise to companies on business investment in the United States. Connections: We assist companies with industry information, analysis, and points of contact and connect them with U.S. cities and states. Ombudsman Assistance: We help companies with questions or concerns about U.S. federal rules and regulations. © International Trade Administration

SelectUSA Services for Firms: Information & Counseling SelectUSA provides actionable information to international investors and U.S. companies considering re-shoring on the benefits of…  Establishing operations in the United States  Understand basic U.S. tax and legal concepts  Navigate federal rules or regulations  Learn about incentives available to businesses in the U.S.  Apply for a business-related visa  Connect with U.S. state, city, or regional EDOs © International Trade Administration Cluster Mapping tool and registry State Business Incentives Database StateBook International

SelectUSA Services for Firms: Ombudsman Assistance  SelectUSA coordinates federal agencies through the Interagency Investment Working Group to address investor questions and concerns related to a wide range of federal regulatory issues.  Select USA aims to ensure investors understand the U.S. system and receive answers in a timely manner. Ombudsman services are conducted by SelectUSA headquarters.  Examples:  Connect with a federal agency/ office to seek insight into a specific case  Offer to facilitate direct communication between the relevant federal agency and the client, as appropriate  Identify federal regulations or processes to U.S. policy makers, that may negatively impact the U.S. business climate © International Trade Administration

Lufthansa Technik, recently announced plans to break ground on a new aviation maintenance, repair and overhaul facility, which will service short-haul and medium-haul aircraft. The investment is expected to create up to 400 permanent jobs. With the support of Vice President Biden, the White House National Economic Council, and the President’s Task Force on Puerto Rico, the SelectUSA team at the U.S. Department of Commerce worked with the Puerto Rico team to offer Lufthansa information and assistance from across federal agencies and departments that not only assisted in making their decision but demonstrated why the United States is the top destination for foreign direct investment. Washington, DC – April 10: Penny Pritzker, Alejandro Garcia Padilla, August Wilhelm Henningsen, and Peter Ammon attend a signing ceremony for an agreement to create a new Lufthansa Aviation Facility in Puerto Rico at German Ambassador Residence on April 10, 2014 in Washington, DC. SelectUSA Case Study: Lufthansa © International Trade Administration

Frulact, a Portugal-based producer of fruit-based preparations for international food companies, announced their first investment in the United States. The approximately 200,000-square-foot fruit preparation and processing plant is slated to open in late 2014 with approximately 100 employees at full production. SelectUSA assisted Frulact and the Southern Idaho Economic Development Organization (SIEDO) through providing information and counseling on U.S. regulations, capital transfer/availability, discussing potential challenges, and connection to the Commercial Service in Lisbon as a local resource. SelectUSA Case Study: Frulact © International Trade Administration

SelectUSA Can Help © International Trade Administration

U.S. states and territories offer financial and other incentives to foreign investors. To easily browse state investment promotion agencies and learn more about available incentives, simply visit selectusa.gov.selectusa.gov State Business Incentives © International Trade Administration

Similarly, U.S. Government agencies manage many support programs and business incentives, from tax credits and grants to visa preference programs. SelectUSA maintains an easy-to-use database of specific programs at selectusa.commerce.gov/investment-incentives.selectusa.commerce.gov/investment-incentives Federal Support Programs and Incentives © International Trade Administration

Announcing… The 2015 SelectUSA Investment Summit March 23-24, 2015, at the Gaylord National Resort and Convention Center in National Harbor, Maryland near Washington, DC. Learn about the U.S. investment climate and connect with service providers and U.S. states and regions. Sign up for alerts! © International Trade Administration

We are your partner for success! How can we help you? © International Trade Administration 2014 A Colombian company learns about doing business in Mississippi. 32 Q&A

Thank You © International Trade Administration & #SelectUSA on Twitter 33 Aaron Brickman Deputy Executive Director SelectUSA U.S. Department of Commerce Tel: SelectUSA.gov

Appendix: Additional Data and Information © International Trade Administration

Manufacturing FDI in the United States, 2013 Position: $935.7 Billion © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis Chemicals is the largest and second-fastest growing recipient of manufacturing FDI in the United States FDI in electrical equipment, appliances, and components grew at an average annual rate of 24.6 percent between 2009 – 2013, making it the fastest growing recipient of manufacturing FDI in the United States. Manufacturing FDI Compound Annual Growth Rate,

Banking, Finance & Insurance FDI in the United States, 2013 Position: $546.1 Billion © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis Insurance carriers are the largest recipients of finance FDI in the United States FDI in branches and agencies grew at an average annual rate of 61 percent between 2009 – 2013, making it the fastest growing recipient of banking FDI in the United States. Banking, Finance & Insurance FDI Compound Annual Growth Rate,

FDI in the United States – Other Sectors, 2013 Position: $590.3 Billion © International Trade Administration 2014 Source: Department of Commerce, Bureau of Economic Analysis In other sectors, holding companies and mining firms are the two largest recipients of FDI in the United States, respectively. FDI in transportation and warehousing grew at an average annual rate of 17.9 percent between 2009 – 2013, making it the fastest growing recipient of other-sector FDI in the United States. Other-Sector FDI Compound Annual Growth Rate,