Momentum - Business to Business Online Magazine Momentum May 2017 | Page 21

Galveston County Update By: C. B. “Bix” Rathburn, Ph.D, Director of Economic Development, Galveston County [email protected] TO Foreign Direct Investment Opportunities in Galveston County The world has discovered Galveston County. The opportunities are global in nature and “as big as the planet.” Galveston County is currently home to operations of well over 25 international companies from countries including Germany, Sweden, Japan, France, Switzerland, Norway and based upon the current level of interest we will soon see many new flags added to our international gallery. Our diverse economy, proximity to deep water ports, the Houston economic engine and the overall Texas business climate combine to make Galveston County attractive to Foreign Direct Investment opportunities. What is Foreign Direct Investment? “Foreign direct investment (FDI) is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company.” Currently Texas is the leading state in the nation for Foreign Direct investment based on the number of jobs created. From January 2011 through March 2016, Texas announced over 1,400 new FDI projects representing a capital investment to our state’s tax base of over $212 billion. Of these projects, 761 were Greenfield (new development) FDI projects creating over 85,000 jobs. Western Europe dominates the listing of countries with major Foreign Direct Investments in Texas with over 51% of the announced projects. Five countries including Japan and 4 countries from Western Europe each accounted for over $3 billion in FDI projects in Texas in recent years. Not surprising, the Houston-Galveston region leads Texas as the top destination for inward FDI accounting for over 38% of the total FDI projects during the past 5 years. Foreign Direct Investments (FDI) do not include and are different from regular portfolio investments in which an investor purchases bonds or equities of foreign-based companies. The distinguishing feature of a Foreign Direct Investment is that it is an investment made that “establishes either effective control of, or at least substantial influence over”, the decision making of a foreign business. When someone from another country buys a controlling interest in an existing company, starts a new business venture from scratch or expands an international company’s operations into another country with a new structure you have a Foreign Direct Investment. The advantages are many including the utilization of foreign capital to create new jobs, tax base and economic activity in the United States. Why FDI in Texas? Texas is a global economic leader with the 10th largest economy in the world. The State of Texas is home to over 1,500 foreign corporations with ongoing operations in Texas. Texas has lead the nation in total exports for 14 consecutive years through 11 deep water ports with over $250 billion in annual exports and is home to 32 foreign trade zones. The rapidly expanding and diverse international communities in Texas provide a foundation of partnership and trust critical to securing the initial investment decision and supporting the success of the venture long term. With a supportive business climate and predictable business regulations, our region is poised for continued growth in Foreign Direct Investment. Help us make our international business partners welcome and successful in Texas. Their investments are playing a significant role in fueling our continuing economic expansion. MOMENTUM / May 2017 16 MOMENTUM / May 2016 21