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The US consistently ranks as one of the best places in the world to do business – and, for more than a reason! The thriving economy, booming business environment, and endless investment opportunities have made America the most sought-after destination for entrepreneurs.
But starting an enterprise abroad as a foreign investor does not come without risks. Without guidance, the unfamiliarity with local requirements and the fierce competition can end up sinking your startup before you get a chance to take it off the ground!
Luckily, the investment strategies and options for investing in USA businesses below can help!
Making a Foreign Direct Investment: Best For International Business Owners
According to recent statistics by the Bureau of Economic Analysis, Foreign direct investments (FDI) contributed a whopping $333.6 billion to the US economy just in 2021. What’s more, in the past years, the top recipients of FDI capital have been the US and China.
So, if you are a foreign business owner with the necessary capital and experience to expand into international markets, making a long-lasting investment in the US is a low-risk, high-potential option.
Taking Part in a Real Estate Investment Trust: Best For Real Estate Investors
As a real estate investor, there are multiple options for investing in USA businesses for you to choose from, such as becoming part of a real estate investment trust.
REITs are defined as companies or groups of investors who invest or own real estate properties to generate income.
Becoming part of one of these trusts gives you the chance to reduce your investment risk, start investing abroad with minimal capital, and earn dividends without having to buy or manage real estate properties yourself.
Becoming an Angel Investor: Best For High Net Worth Individuals
If you are a high net-worth individual with a passion for seeing brilliant startups making an impact in today’s economy, you might choose to become an Angel Investor and financially support a US business.
According to recent estimates, the number of Angel Investors in the US has grown from 124,900 to 363,460 in the 10 years between 2011 and 2021. Today, Angels are responsible for providing over 90% of external funding for startups and investing in nearly 70,000 new enterprises.
When choosing this investment strategy, you’ll need to make sure that you have a thorough knowledge of your industry, an unparalleled familiarity with the local business environment, and enough capital to support a new business.
Investing in an EB-5 Visa Business: Best for Foreign Nationals Wanting Permanent Residency
If your goal is to become a permanent resident of the US, you should look into the reasons to invest in the EB 5 program.
The EB5 Visa program is created for international investors who are able to make a minimum business investment of $1,050,000 (or $800,000 in Targeted Employment Areas).
Through your investment, you’ll be able to contribute to an existing enterprise, turn a failing business around, start a new company, or take part in lower-risk Regional Center investments.
If you are looking to explore this option for investing in USA businesses, be aware that your capital will be “at risk” and that your business investment should create at least 10 full-time jobs for you to obtain and maintain a residency permit.
Investing in the Stock Market: Best For Traditional and Retail Investors
As a foreign investor with limited capital, you might be wondering whether there is something you can do to invest in the thriving business environment the US offers.
Luckily, thanks to the advent of retail investment platforms and user-friendly trading apps, you can indirectly invest in US companies through the stock market.
When choosing this option, make sure to pick a trading platform that allows you to invest in your preferred company and projects your rights and privacy.
And, of course, don’t forget to research the growth potential of the company in question before committing a large part of your investment capital.
Expanding Your Online Business Into Foreign Markets: Best For Digital Entrepreneurs
For digital entrepreneurs, a great option to take advantage of the business opportunities the US provides is to expand their operations with global eCommerce solutions.
Although this strategy allows you to bypass distances and geopolitical borders, you’ll need to make sure that your company is ready to comply with foreign business laws and has the framework in place to expand globally (i.e.: international shipping, scalable operations, and global logistics).
Pro Tip: Taking Advantage of Government Programs
Depending on what time of investor you are, the options above can help you fulfill your dream of investing in US businesses. But regardless of the pathway, you have chosen, make sure to get started by carrying out the necessary due diligence.
During your research, you might find that your local government offers incentives for entrepreneurs to make foreign investments (i.e.: the BritishAmerican Business project) or that there are programs to help business owners expand their operations.
Don’t miss out on these valuable options for investing in USA Businesses!