Government economic support in the US is diverse and generally also applies to foreign companies wishing to invest in the US. Both the central government and, above all, the individual states, counties and municipalities have a wide range of support instruments at their disposal, which are supplemented by offers from other players such as utility companies, e.g., in the form of discounted energy contracts. All actors in US economic development together are referred to as “EDOs,” Economic Development Organizations.
The programs available vary according to the type of project and other factors and are often the result of individual agreements with the EDOs involved.

 

1) Grants and subsidized loans
The homepage of the government initiative “SelectUSA” provides companies with comprehensive information on the US market and the most important contact points. Among other things, national, industry-specific support programs are also presented, such as for the chemical or agricultural and food industries. Further details can be found here.

The U.S. federal government’s grants.gov database currently contains nearly 2,000 national grant programs and allows companies to conduct a structured search. For example, programs can be filtered according to the applicant group, the responsible authority or the funding topic. It is also possible to make a targeted comparison of the grant offerings of two states.
The U.S. Small Business Administration (SBA) is a U.S. federal agency that supports small and medium-sized enterprises (SMEs). Funding is provided primarily in the form of collateralized loans, but other types of financing are also available. An overview of these special SME programs can be found here.

2) Tax incentives
Tax incentives in the USA are set in particular by state and local governments. As a result, corporate, sales and property taxes, among others, can vary greatly from region to region. In addition, if a particular project is particularly attractive due to the size of the investment and/or the number of planned jobs, there is often the possibility to discuss further tax credits, rebates and refunds with the EDOs involved. It is then important for the investor to be able to properly assess and quantify the value of the tax incentives offered.
The state’s SelectUSA initiative provides a separate database of all grants, low-interest loans and tax incentives offered at the federal level. Tax incentives can be further filtered by tax credits (“tax credit”) and tax exemptions (“tax exemption”). Click here to access the interactive map.

3) Specifics
The Investor Guide of “SelectUSA” offers companies a good overview of the entire investment process in the US. From immigration issues to site selection and funding opportunities, many relevant questions are addressed and, in particular, the path to a customized “Incentive Package” from the EDOs is clearly described. The Inflation Reduction Act (“IRA”), signed into law by U.S. President Joe Biden in August 2022, will see the U.S. government place particular emphasis on promoting climate-friendly technologies, with around $369 billion made available over ten years. The aim of the law is on the one hand to achieve US climate protection targets, and on the other to build up production capacities for green technologies in the US. The US government is focusing on tax credits, among other things for investment in manufacturing facilities in the solar, wind, or battery industries or the domestic production of climate-friendly hydrogen (“production tax credit”). The White House has published a guidebook on the IRA. The US federal agencies have yet to issue implementing regulations for the various components of the IRA. In early February, the EU Commission unveiled “The Green Deal Industrial Plan” in response to the IRA.

 

Are you planning to expand into the US? Feel free to contact the EU and foreign trade promotion services of NRW.BANK, which provides free and personalized advice on suitable funding opportunities for your venture.

Dr. Klaus-Hendrik Mester
E-Mail: klaus-hendrik.mester@nrwbank.de
Tel.: 0211 91741 6622

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