US companies should anticipate increasingly robust seduction efforts from investment promotion agencies. The US Internal Revenue Service notes that for every dollar US non-financial corporations have in the bank in the US, there are three dollars parked abroad. The Federal Reserve estimates that this amounts to more than $5000bn.

Readers of fDi Magazine know that one reason these funds do not come home is because the US tax code (even with loopholes) burdens companies with one of the world’s highest effective corporate tax rates. But another reason is that there are promising investment opportunities abroad – to make, to sell and even to invent new products.


While US politicians may fret about a lack of economic growth, US companies are posting impressive numbers on a global basis. The run-up in stock prices in the first half of 2013 was one measure of investor optimism about these profits continuing. Corporate inquiries (even via consultants) into international opportunities may be anecdotal, but perhaps these are also a foretelling.

In the US, demagoguery continues against corporations and executives, especially well-paid ones. The pace of new regulation has been termed a tsunami. Yet, federal leaders seem unable to correlate regulatory zeal with anaemic economic growth.

Fortunately, in the federal system, some powers and options are available to the individual states, and many states have been working hard at becoming business friendly. So far, only a few fringe voices have labelled these efforts as a race to the bottom. We may approach a tipping point. 'Race to the bottom' voices may find federal sponsors, who will use regulation, litigation, legislation or less transparent but effective coercion to impede state initiatives. Alternatively, frustrated with anaemic growth, the public will express this in 2014’s mid-term elections and tip momentum toward the idea that to have employees (ie, more jobs), you need to have prospering employers. That is when some of that $5000bn may find its way back home.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world's leading companies and served in the public sector as director of White House operations. Email: