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Brazil’s Electric Power Transmission Auction Paves the Way in Economic Recovery and Foreign Investment

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Archives, Foreign Trade Zones, Global Trade Daily, International Trade, Site Selection, Utilities

Brazil’s Electric Power Transmission Auction Paves the Way in Economic Recovery and Foreign Investment

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On December 17th, Brazil will kick off its upcoming Electric Power Transmission Auction. This event, which will take place in São Paulo, is critical for Brazil’s forward-movement in economic recovery since the pandemic. ANEEL – the Brazilian Electricity Regulatory Agency, will be hosting the auction to attract investments to the energy sector, and ultimately create jobs. Global Trade Magazine heard directly from Roberto Escoto, Investment Manager of Apex-Brasil (the Brazilian Trade and Investment Promotion Agency) to learn more about the event and its importance in the foreign investment arena.

 

 

 

 

Discuss the goals for the upcoming Electric Power Transmission Auction and the issues it’s aiming to solve.

The upcoming Electric Power Transmission Auction will be held on December 17, 2020 by the Brazilian Electricity Regulatory Agency (ANEEL) at B3 S/A – Brasil, headquartered in São Paulo.

There are 11 lots of projects, covering 1,940 km of transmission lines and substations with a transformation capacity of 6,420 MVA. The transmission facilities that will be auctioned involve investments of about BRL $7.4 billion, with the potential of generating 15,434 thousand jobs during construction of the projects.

The term for commercial operation of the facilities varies from 42 to 60 months, for concessions of 30 years valid from the signing date of the contracts. Concessions will be tendered for the construction, operation, and maintenance of 16 transmission lines and 12 substations.

Brazil’s main transmission network, the National Interconnected System (Sistema Interligado Nacional – or SIN), consists of four interconnected subsystems (North, Northeast, Southeast and Center-West, and South). Together, this makes up one of the largest interconnected subsystems in the world. The Brazilian network has interconnections with neighboring Paraguay (through the Itaipu Binational project), as well as with Uruguay, Argentina, and Venezuela.

The system operator (ONS) expects the Brazilian transmission network to grow extensively by 2024.  More specifically, ONS envisages an extension of the grid towards the less well-connected regions of Brazil, as well as work to make further improvements to the existing grid in other parts of the country. The upcoming Electric Power Transmission Auction in December 2020 aims to assist in achieving these goals.

How does the region create and maintain a competitive environment for initiatives in the energy sector and foreign investment?

The electricity sector in Brazil – in generation, transmission, and distribution – is now one of the largest destinations of foreign direct investment in the world. The growing interest from foreign investors is driven by strong business opportunities, with private players having the chance to compete in all segments of the sector, combined with the strengthening of Brazil’s regulatory framework.

What major companies are already benefiting from investment opportunities/energy sector in this region? 

Companies from all around the world are benefiting from the investment opportunities within Brazil’s energy sector, including but not limited to Iberdrola, Enel, EDP, Engie, EDF, EDP, Statkraft, Equinor, State Grid, China Three Gorges, CGN, Brookfield, Suncor, Canadian Solar, and more.

Discuss how you identify and lead multi-sector business development opportunities? 

Apex-Brasil has an extensive international network of partner organizations, associations, and companies. We have offices in the U.S. (Miami and San Francisco), Europe (Brussels), Israel (Jerusalem), Russia (Moscow), China (Shanghai and Beijing), the United Arab Emirates (Dubai), and Colombia (Bogota). Additionally, since we work in close partnership with the Brazilian Ministry of Foreign Affairs, we have access to over 100 Embassies around the world. Finally, we have a market intelligence unit that supports our efforts with relevant information on the international economy, business, and key players.

This global reach and intelligence allow us to map and prospect the right investors, as well as introduce Brazilian companies to foreign investors on international business trips.

How is the workforce prepared for incoming investors? How about for current investors?

Brazil is a populous country with a workforce of over 100 million people. The sectors that usually gather the largest number of Brazilian workers, according to IBGE’s statistic report (PNAD), are retail and mechanic workshops, public administration, defense, education, health, social services, information and communications services, financial activities, realty, and administration.

In 2017, Brazil’s Congress approved a reform in the country’s work legislation, known as the Consolidation of Labor Laws (CLT). The main goal of this reform was to make the laws more flexible, with a specific focus on negotiations between employers and employees.

As a result, new rules have emerged, allowing for outsourcing of labor in a company’s main activity, home-office regulation, and more accountability for employees in lawsuits against employers. That said, collective bargaining agreements between employers and unions may offset some points written in the law, adjusting the terms to the necessities of the workers. Some of these topics include working hours, profit sharing, and sanitary standards (which were previously established only by the employer).

However, this does not mean that workers are left unprotected, as their fundamental rights cannot be negotiated under CLT. These rights include maternity and paternity leave, holidays, minimum wage, 13th salary, retirement, and the Guarantee Fund for Continuing Service (FGTS), which is a type of savings account taken directly from workers’ salaries that aims to protect the worker’s subsistence in case of dismissal but can also be used to buy residential properties.

Also, Brazil has first-rank universities and engineers with expertise in onshore and offshore technologies, as well as in EPC entrepreneurships.

Brazil has a skilled and diversified labor market, as well as favorable labor framework conditions for investors.

Let’s discuss how the region has managed the energy sector climate during the pandemic and other disruptions. What should companies know and how are you addressing it?

Brazil is taking concrete actions to combat the Covid-19 pandemic and still remain globally competitive. Among other measures, the Brazilian government has launched a package to protect both workers, especially the most vulnerable people, and SMEs.

When it comes to the power sector specifically, several initiatives have been introduced since the start of the pandemic. This includes but is not limited to the following measures:

First, a Committee of Crisis and Monitoring, composed of the Ministry of Mines and Energy (MME), and other authorities and experts, has been established to map and act quickly on the challenges that the pandemic has imposed.

Second, MME and ANEEL, along with banks, have designed and implemented the “COVID account,” which offers loans of a total of USD $16.1 billion for energy companies, with the goal of providing liquidity to the sector, especially in the key segment of distribution.

Finally, MME has launched the green bonds program, which is favorable for obtaining financing for new energy projects, with an estimated gradual release of USD $250 by 2030. It is envisioned that this particular program will contribute to expanding 25 GW for new wind energy, 8GW for solar and energy, and 3 GW for small hydro plants.

Please share anything else you’d like the readers to know about Brazil’s investment climate.

Brazil has one of the cleanest electric matrices in the world, with over 80% of our electricity coming from renewable sources. Currently, hydro represents 58% of the Brazilian power generation mix, while biomass, wind, and solar have a share of 11%, 9%, and 2%, respectively. In 2029, it is expected that these sources will represent 42%, 10%, 16%, and 8%, respectively, of our power generation mix. With this forecast in mind, it is clear that wind and solar energies are increasing fast and constantly, underscoring their importance now and in the future. That said, this growth is not a surprise: Solar and wind are very competitive areas, and Brazil offers unique differentiators for investors to consider.

For example, Brazil has one of the highest capacity factors for wind energy in the world, with an average above 40%. Brazil also has the highest growth rate for wind in Latin America over the last 10 years. Additionally, our solar irradiation is higher than those of other counties, such as Spain, France, and Germany. What’s more, the power generation segment has opportunities in auctions, free market (Corporate Power Purchase Agreements model), and distributed market (i.e. type of net metering model) – these are all important drivers for the growth of these two sources.

To conclude, Brazil´s energy sector has a successful regulatory framework that is prime for foreign direct investment. Additionally, all of the energy segments in Brazil (generation, transmission, and distribution) are open to private investors. Lastly, Brazil has a solid track record of success and growth in this sector, which is the reason why the power sector attracted so much foreign investment in 2019, as well as why we expect this growth to continue in the coming years.

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Archives, Global Trade Daily

How to Complete Foreign Direct Investment Projects Amid the Pandemic

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The coronavirus pandemic has created significant challenges for companies with foreign direct investment (FDI) projects in their pipeline. Restrictions on travel, immigration, and budgets are making it harder to make in-person visits to potential sites, bring over key executives, and solidify project financing amid an uncertain economy. But whether a project is in the site selection stage or a company is already in operation and considering additional investment, companies have plenty of options to keep their strategic projects moving. The key is to revisit the initial strategy, adapt to changing times by utilizing virtual tools, and consider all options with immigration and project budgets – including the potential for new incentives.

Revisit the Strategy

New investments in foreign jurisdictions are almost always long-term decisions. However, as global markets shift and new trends emerge, companies should revisit these decisions for projects in the pipeline to ensure the long-term strategy still makes sense. In most cases we have advised on, the answer is yes. But the scope may need to change.

The pandemic has caused businesses across industry sectors to take a fresh look at their supply chains and corporate footprints. In some cases, this has resulted in strategic changes. For example, some manufacturers that had previously been planning one large facility but experienced disruptions in the supply chain may now consider multiple smaller facilities to help diversify their footprint and be closer to key markets. Other companies who previously planned North American distribution facilities have pivoted to assembly or manufacturing. But as an overarching observation, many companies that had a clear strategic reason to enter or expand in the U.S. are finding they now have an even stronger argument to do so.

It is also important for companies to consider feasible time frames for making informed location decisions and starting operations. After a company decides to undertake a project, it can be two to three years before the company is producing a product. During the planning stages, companies should build in time for location evaluation, machinery and equipment orders, construction, hiring and training. Factoring in this lead time is critical as companies react to today’s markets but also continue proactive planning for the future.

Adapt With Virtual Site Selection

Without a doubt, the collapse of international travel has had a huge impact on site selection. But this is one area of the pandemic that has a silver lining: it has accelerated a shift toward enabling more of the site selection process to happen virtually, and it has improved the quality of those virtual tools.

Prior to COVID-19, many of the more innovative economic development organizations (EDOs) were already creating cutting-edge digital portfolios for their communities in response to enhanced online activity by site selectors and companies. It is now more fundamental for EDOs to develop virtual showcase pieces on available properties, which often include videos and drone footage, high definition site photos, and other due diligence materials. These tools make it easier for companies and consultants to review potential properties from the comfort of their home office at any time of day, and positions the community to get a site or building on the short-list for the next project. Site selection consultants can also help companies virtually evaluate a potential site using GIS mapping tools and digital data sets, packaged into an online storybook portal that simulates an in-person visit.  This virtual approach has proven to be extremely valuable for teams working odd hours, whether that’s due to different time zones or the need to supervise children during remote school days.

It’s clear that in this virtual environment, corporate decisionmakers have more considerations than ever when it comes to making site location decisions. Not being able to inspect a site in-person or meet face-to-face makes it even more critical to have trusted partners on the ground in the United States – partners who are looking out for a company’s best interest, eliminating risk and helping the company consider all options. Working with consultants and attorneys who understand the process, the resources available, and the roadblocks will give companies the best chance of success.

Navigating Immigration Restrictions

One of the most important aspects of FDI projects – bringing executives over to help oversee them – can be a challenge because of closed consulates around the world. Some consulates in Asia are not even scheduling visa interviews until December, whereas before the pandemic it would take seven to 10 days to get an interview. A variety of immigration restrictions remain in effect under the Trump administration as well.

But business immigration is slowly opening back up, and companies still have the necessary tools to bring essential workers to the U.S. Based on what country the foreign national is coming from and the immigration attorneys can help companies fashion creative solutions. Even if the category in question faces a ban, it’s possible to secure a waiver for high-level executives who are essential to keep the business running. With all immigration needs though, companies should plan for additional vetting and longer timeframes than in the past.

Companies should also carefully plan for their personnel’s return trip. Certain countries are requiring their citizens to quarantine for 14 days after they return from the U.S., which can outweigh the benefits of shorter trips to the States. There have also been instances where a country has denied entry from U.S. travelers, creating a risk of key personnel getting stuck. To avoid surprises, companies should work through these considerations before sending travelers overseas.

Adjusting to Budget Challenges

Companies trying to reduce expenses as they weather an extremely uncertain economic climate have several options with FDI projects. In some cases, they can adjust the scope of their project where that project is a critical element of the company’s long-term strategy.

Another option for companies that were planning on a greenfield project is to consider acquiring another company or starting a partnership instead. These options can sometimes reduce costs and time compared to starting from the ground up. But there are downsides to consider as well, including less control over the particulars of the facility, such as labor quality and availability, utility costs, taxes and more. There can also be potential surprises as the pandemic makes certain targets’ financial situations harder to gauge.

Before adjusting scope, companies already in the midst of new projects or who have had recent projects should explore how incentives at the state or local level could be impacted – negatively or positively. A variety of counties and states in the Southeast U.S., for example, are adjusting incentives programs to better fit the reality of remote work and maintain economic development. Some companies may also have a need to renegotiate incentives to avoid potential clawbacks as a result of change in strategy, a delayed project or reduction of force. Consultants and attorneys can help companies explore their options and develop solutions.

Bottom Line

Companies that stay aligned with their strategic plan, take advantage of virtual tools, and partner with experienced advisors can still implement FDI projects successfully. Forward-thinking businesses in the position to keep long-term investments moving will be in an even stronger position once the pandemic ends and will have a head start on competitors who remained in cost-cutting mode.

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Sam Moses and Michael Chen are international business attorneys at Parker Poe, and Morgan Crapps is a site selection and economic development consultant at Parker Poe Consulting. They can be reached at sammoses@parkerpoe.com, michaelchen@parkerpoe.com, and morgan@parkerpoeconsulting.com.

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Archives, Global Site Selection, Global Trade Daily, Site Selection

How to Effectively Expand Your Business Globally

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These days, businesses that are quickly growing don’t necessarily know the ‘do’s and don’ts’ of expanding into new jurisdictions.  In this post, we will dive into the key issues you should project manage as you plan your expansion beyond borders.

Elon Musk, Jack Ma, Steve Jobs. Each of them started small but shared an outsized goal of making the world a different place. Eventually, they all accomplished this, becoming some of the most influential entrepreneurs the world has ever seen, and scaling their businesses globally.

Almost every business owner I’ve met has similar-sized ambitions. Few are content with staying small. They want to build something that can make a massive impact and become a household name.

But the gulf between aspirations and reality is often vast. You may be standing in your way by not doing something important from the beginning: thinking globally.

Location. Location. Location.

When your company is looking to expand business overseas, pay attention to where and why. Especially the “why.” For instance, many American companies are setting up in various portions of Europe because of the critical talent in those areas. Once you’ve decided on the best location for your business to grow, it’s then time to hire. In your country of choice, you may need to hire a country manager that can help build a team as well as a person or many who can run that facility in areas including administrative, R&D, sales, etc.

Next, you have a few different ways you can expand into your chosen country. The smallest footprint you can have is a rep office, one being established to run market research, but governments have strict limits on how long you can have a rep office. For example, in Singapore, you can only set one up for one-year, but you can get a two-year extension. So, know exactly what you plan to accomplish.  Setting up a subsidiary will be the right choice if you want to send a message that you are there to stay.

If you establish a local subsidiary or other local legal entity, you may need to establish a minimum capital reserve, make your entity subject to legal liability in that jurisdiction, pay taxes, comply with corporate formalities around incorporation, shareholder and board meetings (how frequently and where they are held), local directors and shareholders (nationalities) and more, maintain a local corporate secretarial function, make public disclosures of your accounts, maintain a bank account and comply with local commercial rules that impact how you record revenues and bookings.

While sometimes your business is simple enough that compliance can be managed by an outsourced service or local law firm, some jurisdictions will require you to have people on the ground.

People in places

As you start your operations, next, you’ll have human capital considerations. When you hire somebody overseas, you need to follow local laws. For instance, in Poland, the contract must be bilingual if you are a foreign employer. Bilingual requirements exist in many countries, including Canada, France, Germany, Russia, Ukraine, and Japan. However, in other countries like Singapore and Australia, you will not need to worry about this.

Additionally, you may have to find a payroll service, but there are limitations in some countries, including China, Serbia, and Russia, to get capital into and out of the country. So, it might be necessary to open up a local bank account to pay your local employees. In some countries, you are even able to wire the money to the employees and the government.

How you pay your people may have currency requirements.

Whether you are bringing in human capital locally or from the home country, you may need to complete pre-hire checks and comply with immigration regulations.

Employment regimes

In certain countries like Poland, employment is a matter of the contract, not at-will, which is different in a country like the U.S. The U.S. is the only country that offers employment-at-will. You can say, “I do not want you to work here anymore.” And then you can leave at that moment. But, in most countries, you have to give notice by contract and get severance.

Most countries have collective bargaining agreements, which sometimes can benefit you, while other times not. For instance, if you are party to a collective bargaining agreement (CBA) in Sweden, it negates the need to deal with each employee as a bargaining unit, negotiate with the union or the CBA, and all the employees fall under it. Depending on the country, you have to comply with local working time regulations – for instance, you can’t work on weekends in France. And, in California, if you work more than eight hours a day or 40 hours a week, you’ll receive overtime pay.

When it comes to expanding your business, the right hiring process is just as necessary as the proper exit process. This protects you from being sued for employment practices. By executing the correct standard, the right contract, and the country’s law, you ensure no breach of your contract for the employee or the employer. Next, you have to think about benefits because even though you have an infrastructure that supports medical care in many socialist countries, most employees are used to having supplemental benefits.

Intellectual property protection

This also relates to intellectual property if you hire contractors to do your development work in a foreign country. The IP they are creating may belong to their contractor and not to the company paying for it, so it’s key to have agreements in place with the contractor, so you own your IP.

If you are conducting R&D or exploiting patents or trademarks created in the home country, local intellectual property regimes will be essential in protecting the IP that you create, export, import and ultimately monetize. Sometimes, that might also mean the capability to enforce your IP rights in a country.

Compliance requirements

Beyond employment law, there are compliance requirements to pay close attention to. For example, you may need to have a registered office or provide an office address to the local government. The office might need to be staffed during business hours if somebody wants to give notice, or the government wants to get in contact with your business. In some countries, like Spain, this is changing to an electronic system where you must have a registered email that the government can use to send communications.

When it comes to data privacy, there seem to be new and overlapping (if not contradictory) national, regional, and local regulations published every day. In Europe, the General Data Privacy Regulation, or GDPR, has strict requirements that apply to companies far beyond the borders of the European Union. The China Data Protection Directive has civil and criminal repercussions to those accessing Chinese consumers through the Internet and otherwise. Recently, the California Consumer Privacy Act, or CCPA, became subject to enforcement.  Going global means threading the needle to ensure that you have compliant solutions everywhere you are doing business.

Taxes

Depending on your footprint, it could create a “permanent establishment,” which makes some portion of your revenues subject to tax in a particular jurisdiction. If you establish a permanent establishment, you will have to file a tax return at the end of the year. Even if you do not have a permanent establishment, you may need to file another type of tax return and comply with other requirements.

Additionally, there are tax requirements from both an indirect perspective and a direct perspective. For instance, if you are making a lot of money, you might have requirements to pay estimated taxes during the year and file the income tax return at the end of the year.

Summing it up

Technology, life sciences, medical device, and clean energy companies can not be successful when confined to one or more jurisdictions. Indeed, by definition, they know no borders. To disrupt markets and build share, new businesses increasingly need to grow faster, and go global, from the earliest stages of development. Accessing global markets is key to achieving value and liquidity, and ultimately, ubiquity. Good advisors are critical to helping companies define and execute on a mission to expand their business globally.

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Louis Lehot is the founder of L2 Counsel, P.C., an elite boutique law firm based in Silicon Valley designed to serve entrepreneurs, innovative companies and investors with sound legal strategies and solutions.  Mr. Lehot is a corporate, securities and M&A lawyer, and he helps his clients, whether they be public or private companies, financial sponsors, venture capitalists, investors or investment banks, in forming, financing, governing, buying and selling companies. He is formerly the co-managing partner of DLA Piper’s Silicon Valley office and co-chair of its leading venture capital and emerging growth company team. 

Kateryna Mamyko-Golomb is a law clerk with L2 Counsel, P.C. She advises corporate clients, startups, and investors. She graduated Cum Laude from Northwestern University Pritzker School of Law. Previously, Kate clerked with a major global law firm in Silicon Valley, and prior to her LLM, Kate led an independent corporate law practice in Central and Eastern Europe and served as General Counsel for one of the leading startup accelerators in the region. Kate graduated Summa Cum Laude from Taras Shevchenko National University where she published her thesis: “Government Regulation of Technology Venture Investment” and clerked for the Kyiv District Attorney.

L2 Counsel, P.C. is an elite boutique law firm based in Silicon Valley designed to serve entrepreneurs, innovative companies and investors with sound legal strategies and solutions.

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Archives, Foreign Trade Zones, Global Logistics, Global Site Selection, Global Trade Daily, Site Selection, Trade Credit Insurance

Minimize Foreign Trade Risks with These 10 Tips

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Does your company follow a strategy to go global? International expansion brings endless opportunities. Statistics show that companies that export boost their productivity by 34% on average over the first year. They are also more likely to survive in the long term when compared to companies with a local focus. 

However, we must emphasize the fact that foreign trading comes with risks. Currency, credit, intellectual property, transport, logistics, ethics… you’ll be dealing with a lot throughout this journey. Being aware of these risks and taking steps to minimize them will ensure the success of your brand’s international trade management.

10 Tips on How to Minimize Foreign Trade Risks 

Make Sure Your Products Are Allowed for Distribution

This is the first thing you need to check: are you allowed to trade with your products in the respective country? For example, the EU has strict regulations that prevent many goods from China from being imported. Each country has its rules, which your business must respect. Otherwise, you would waste a lot of time and resources planning an impossible expansion project. 

You can get familiar with the rules by reading relevant laws and regulations or contacting the customs services.  

Focus on the Legal Aspects of Business Expansion

Each country has its own regulations regarding businesses from abroad. Legislators set the legal framework and conditions for FFcustomers, sales, and particularities regarding the industry. It’s important to be aware of all these details ahead of time. When designing your strategy and drafting the initial contracts, you should make sure you stay within the legal framework of the country where you expand the brand. In addition, you should be aware of potential legal disputes and their solutions. 

Most business owners hire lawyers in their respective countries. A lawyer from your own country can also make connections and give you the details you need.   

Get Shipping Insurance

Everything looks well on paper. You consider the costs of production, transport, marketing, sales, and everything else related to selling your goods abroad. But there’s a risk that business owners often forget: damage during shipping. Items may break or get lost during transport. Your shipment may become a subject of theft or even vandalism. Accidents and contamination happen during transport all the time. If you don’t get good insurance for your shipment, you risk losing a lot of money. 

Proper insurance is not cheap. You should talk to several agencies to get the best offer on international shipments. We recommend using the best finance apps to plan all costs, including insurance over a longer period of time. These apps will help you calculate a decent budget and determine a final price that won’t leave much space for losses. 

Consider All Currency-Related Things

When planning foreign trade financing, you’re guided by the official currency in your own country. You focus on evaluating the risks related to credit, but as most business owners, you might forget about one thing: currency conversions may initiate losses, too. 

The COVID-19 crisis hasn’t been kind in this aspect. In March 2020, emerging-market currencies faced losses of up to 30%. That’s something that nobody could have predicted. However, you can analyze the movement of relevant currencies and estimate potential losses. You might need to work with a financial expert to make these evaluations.  

Evaluate the Risk of Protectionism

Trade protectionism is a policy for protecting domestic industries from foreign invasion. If, for example, a particular country stimulates the domestic flour milling industry, it will impose import quotas, tariffs, and other handicaps on foreign traders. Governments do this because they don’t want foreign products to drop the market prices and get the domestic industries in trouble. 

If you plan for global exposure, you have to learn about these policies. You must take the additional expenses into consideration, so you’ll evaluate a realistic final price. Will it be acceptable for the living standard of the respective country?

Register the Corporate Names and Trademarks

When doing business abroad, you risk violating another brand’s intellectual property rights. You can avoid that by registering your brand’s names and trademarks. If that process goes undisturbed, you can feel free to offer the products on the respective market. 

Consider the Risk of a Changing Market Environment

No market situation is stable and rigid for all times. You will develop a general strategy, which will be based on solid international risk management. But no matter how well you predict potential risks and future circumstances, you cannot be 100% sure that you did it properly. 

In Deloitte’s Global Trade Management Survey, none of the Swiss chief financial officers who participated thought that the global trade environment would become less complex. Only 15% of them said they expected the conditions to remain the same. 

Your company must continuously review the strategy and make the needed adjustments as the market circumstances evolve.   

Evaluate Foreign Ethical Standard

When offering your products on a global market, you should think about the differing ethical standards that you’ll face. For example, Israel has a thriving vegan culture. It might not be a good idea to trade fur there before evaluating the risk of getting your brand dragged through discussions as an unethical one. 

Get well informed about the customs and social conditions in the country where you plan to expand. 

Invest Time and Resources on Collaboration

Business owners often neglect the need to get comprehensive advice through collaboration with foreign lawyers and governmental services. They want to save time and money, or they simply forget that getting insider information is crucial before international expansion. 

You need to talk to experts who will explain the laws and regulations. You might need finance experts from abroad as well. In addition, you have to collaborate with industry insiders who know the market and can help you build a solid network of connections.

Get Acquainted with Foreign Business Customs

You may be used to a direct, friendly approach with a bit of humor in the mix. But in a foreign country, such an approach may be considered unserious or even offensive. Intercultural differences are a major factor in foreign trading success. 

You have to get acquainted with business etiquette when entering a new market. You can find this information online, but it’s best to hire a business advisor from the country in question. You’ll get proper guidance from someone who knows the target region and the communication etiquette in the particular industry. 

The country’s culture, politics, and economy are also important. Learn as much as possible, so you can start and maintain a productive conversation with potential partners. 

Foreign Trade Is a Complex Endeavor

Yes, it will be a rewarding experience for you as a business owner. With the right approach, you’ll take your brand towards substantial growth. However, you have to conduct basic research regarding the risks you’ll face during the expansion. This is a process that requires thorough planning, so don’t rush through it.

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James Dorian is a technical copywriter. He is a tech geek who knows a lot about modern apps that will make your work more productive. James reads tons of online blogs on technology, business, and ways to become a real pro in our modern world of innovations.

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Archives, Global Logistics, Global Site Selection, Global Trade Daily, International Trade, Stories

Back to Growth: U.S. Business Leaders Have Rosy Outlook for Economy

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The COVID-19 pandemic has affected every aspect of our work and life.

Business executives have had to quickly reconfigure operations, and millions have had to unexpectedly work from home or cease work entirely. Videoconferencing has become the killer app, and Zoombombing became a new privacy concern.

Despite the widespread health and business challenges brought on by the coronavirus, two-thirds of U.S. business leaders are optimistic the domestic economy will recover within a year, according to a survey TMF Group recently released.

It’s an encouraging sign that business executives in the U.S. are expressing this type of optimism, particularly based on the unprecedented challenges experienced throughout the economy over the last few months. This group was obviously very confident before the onset of the pandemic, and they now seem eager to not only restart their businesses but help reignite the economy as well.

We conducted the survey in the middle of April to gain insight into how companies plan to navigate these uncertain times. More than 40 percent of the 300 decision-makers who took part in the poll work in companies with more than 5,000 employees. Most of the respondents (85%) said their companies do business outside the United States.

Nearly a quarter of respondents (23%) expect a V-shaped economic recovery, meaning a dramatic bounce to pre-virus activity by the end of 2020 following the sharp collapse. Only a small minority (12%) anticipate the economic impact of the pandemic to the last two years or more.

Looking beyond the U.S., business executives were a little less optimistic but still positive: 56% of respondents said the global economy would recover within a year.

It may be easy for critics to judge the survey takers as stereotypical American optimists, but I believe their confidence is grounded on some key facts. The economic shock has been largely demand-driven, as travel restrictions and government stay-at-home orders shut down wide swaths of the U.S. and global economies. Many of the world’s governments acted quickly to offset the economic damage. In the U.S., the federal government and central bank organized a massive stimulus package and pumped trillions of dollars into financial markets. More than 60% of respondents said the financial support to workers and businesses in the U.S. has had a very positive or somewhat positive effect on their companies.

Now, as states allow more businesses to reopen, consumers are eagerly venturing out despite the ongoing health risks. As consumer and business demand rebound, companies will begin hiring again.

Indeed, business decision-makers are confident their businesses will rebound quickly. More than half say their companies will return to normal operations within six months.

In times of crisis, there’s a premium on bold leadership and decisive action. Resilient leaders continue to mount appropriate responses to the global pandemic while charting paths to recovery.

The survey underscored that the pandemic has forced business to rapidly evolve. Many are moving ahead to reassess, reimagine or reinvent their businesses. Thirty-six percent say they plan to accelerate plans for international expansion, and 32% plan to seize domestic growth opportunities.

It’s a positive sign that the strategic imperative to go global remains strong because COVID-19 has dealt a serious blow to the international system. The World Trade Organization predicted in April that world merchandise trade would plummet between 13% and 32% this year.

But the factors that have driven globalization for several centuries have not disappeared. People have been driven to seek profit internationally since the earliest days of the Silk Road, and this instinct will continue. Furthermore, the spirit of international cooperation has been strong in the response to the pandemic. Companies, government agencies and nongovernmental organizations are working across borders to solve problems at scale, such as developing a vaccine for the coronavirus.

A big motive for international expansion is the diversification of supply chains, cited by 35% of respondents. The coronavirus has interrupted the flow of goods across borders, from raw materials to finished products. The disruption has vividly illustrated that today’s highly interlinked, international supply chains have more potential points of failure and less margin for error for absorbing delays and disruptions.

Reducing dependence on one country or region is a priority. Diversifying your supplier base may increase costs in the short-term but will make your network more flexible and agile and potentially reduce the economic shock of future disruptions.

The outbreak of COVID-19 forced business to reassess every strategic objective and business plan. The health crisis has exposed vulnerabilities and created unforeseen challenges.

As businesses around the world consider how they can return from the economic crisis unleashed by COVID-19, the survey results provide some food for thought. Expanding internationally or domestically in uncertain times, for instance, may seem counterintuitive but could also fuel faster growth. Severe adversity provides real perspective. It is possible to find strength and confidence in the face of real hardship.

__________________________________________________________________

TMG Group is an international professional services firm that provides administrative support services across multiple jurisdictions.

manufacturing
Archives, Best Cities, Global Trade Daily, Site Selection

MADE IN AMERICA: 20 TOP U.S. CITIES FOR MANUFACTURERS

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More than 11 million Americans worked in the manufacturing sector in 2016, according to the U.S. Department of Commerce. These are good jobs, too: T­he average payroll by employee in manufacturing is $57,266. But while manufacturing was the heart of the American economy a century ago, today it’s far more select. Here’s a look at the top 20 cities in the U.S. for advanced manufacturing.

Columbus, Indiana

Columbus is one of the nation’s true powerhouses, with 38 percent of employment dedicated to advanced manufacturing and industry. (That’s compared to 9 percent nationwide). According to the Greater Columbus Indiana Economic Development Corp., Columbus manufacturing is specialized in six industries: machinery and engines, transportation, paper products, fabricated metals, plastics, and pharmaceuticals. It’s no wonder the city is home to the North American R&D centers for Cummins, Faurecia, Toyota Material Handling, Dorel, Enkai, and PMG Indiana. The city is currently working to expand that manufacturing base to include aerospace, cybersecurity, defense, and engineering/R&D services.

Bowling Green, Kentucky

That every Chevrolet Corvette made since 1981 came from Bowling Green ought to tell you something about the city’s manufacturing base. In 2017, about 17 percent of the city’s workforce was in manufacturing (up from 14.4 percent just five years previously), according to USA Today, and they’re responsible for $1.1 billion in exports. The manufacturing base in the city is incredibly diverse, with firms located there making automotive airbag inflators (ARC Automotive), new and used pallets (B&D Pallet), laser marking machines (Beamer Laser Marketing Systems), faucets (Delta Faucets) and paint (Sherwin-Williams).

Lake Charles, Louisiana

There are currently $57 billion worth of manufacturing and petro-chemical projects planned for the Lake Charles metro area, according to a September 2019 Nola.com article. This translates into 3,000 new jobs for 2020, and another 3,800 new jobs in 2021. Considered an economic power for some time now, the region boasts that about 9 percent of its workforce is in manufacturing, and they produced a little more than $7 billion worth of exports in 2018, according to AdvisorSmith. In per capita terms, that pencils out to more than $33,000, which AdvisorSmith ranked seventh highest in the nation.

San Jose, California

San Jose supports more than 65,000 manufacturing jobs—more than twice the number found in the rest of the Bay Area combined, according to a 2016 report from SFMade. It’s home to one of the nation’s Manufacturing Innovation Institutes, which specializes in Flexible Hybrid Electronics, and is part of a network of manufacturing innovation centers set up by the Obama Administration in 2013. The manufacturing output of San Jose was a remarkable $76 billion in 2018, ranking it sixth on AdvisorSmith’s Top 50 list of cities with strong manufacturing economies.

Rocky Mount, North Carolina

Once known predominantly for agriculture and textiles, this North Carolina city (population: 54,000) is known as a regional manufacturing center that produced more than $6 billion worth of exports in 2018. The engine manufacturer Cummins has a plant there, as does Corning, which makes glass. The city is also home to metal fabricators, industrial packaging makers, and hardware producers. Manufacturing has grown by nearly 12 percent in recent years, according to AdvisorSmith, which also reported that Rocky Mount’s manufacturing totaled more than $42,000 on a per capita basis, making it one of the most dynamic industrial cities in the nation.

Greeley, Colorado

Vestas Blades makes wind turbines. Burris Co. manufactures rifle scopes. Norfolk Iron & Metal produces carbon steel. IES Combustors makes waste gas combustion equipment. Worthington Industries manufactures a wide range of products, including cab enclosures for tractors, industrial components, propane cylinders, and water systems. What all these companies have in common is their location in Greeley, where nearly 13 percent of the labor force is in manufacturing. In 2017, they were responsible for nearly $800 million in exports. To keep the growth steady, Greeley firms are focusing on finding new talent through better apprenticeship programs, benefits packages, and workforce culture, according to a recent article in the Greeley Tribune.

Jackson, Mississippi

It shouldn’t be surprising that 60 percent of the manufacturing sector in Jackson supplies products and services to the automotive market, according to the Jackson Chamber of Commerce. Companies such as Michigan Automotive Compressor, Lomar Machine & Tool Co. and Tenneco form the heart of Jackson industry. But medical device manufacturing is a growing part of the local economy. A big part of why Jackson is able to sustain such industries is the Academy for Manufacturing Careers (AMC), a Department of Labor-certified training program and trade school established in 2005 by the Jackson Area Manufacturers Association. The AMC offers full training for CNC machinists, tool and die makers, machine builders, industrial electricians, and a host of other specialties.

Greenville, South Carolina

Greenville has been known as a center for advanced manufacturing since at least 2003 when the Harvard Business Review wrote approvingly of the city’s “visionary leaders,” “hospitable business climate,” “customized training” and “collaboration within the business community.” Those factors are still driving economic development there today, with nearly 60,000 workers (14 percent of the labor force) in Greenville producing $5 billion worth of manufacturing exports, according to USA Today. They work for companies such as Michelin North American (radial tires), GE Power (gas turbines), Bosch Rexroth (fluid pumps), and Confluence Outdoor (boats and boating accessories).

Kokomo, Indiana

This central Indiana city, long a center of automobile manufacturing, is best known today as one of the nation’s top suppliers of automotive transmissions. Not bad for a city that was devastated in the 2008 financial crisis (General Motors, Chrysler, and Delphi all had plants there), but the city has recovered since along with the auto industry itself. Today, nearly 30 percent of the labor market in Kokomo works in manufacturing—up from 25 percent in 2012. According to AdvisorSmith, the city’s manufacturing sector produced $3.7 billion in 2018—which penciled out to nearly $45,000 on a per capita basis.

Sheboygan, Wisconsin

This little city located on Lake Michigan at the head of the Sheboygan River is now a preeminent industrial center, specializing in car parts, furniture, and metal products. In fact, the metals fabrication company Kohler is the area’s largest employer, with more than 5,000 workers, according to the Sheboygan County Economic Development Corporation. That industry is so big there that the county has six times the national average worth of metal manufacturing and makes 11 times the national average of fabricated metal products. Sheboygan workers produced $3.1 billion worth of manufacturing exports in 2018, according to AdvisorSmith.

Bellingham, Washington

Bellingham’s manufacturing output grew more than 10 percent between 2014 and 2018, according to AdvisorSmith. And it’s still growing—a Bellingham Herald article reported in January that Tidal Vision, an established Bellingham operation that converts marine byproducts into eco-friendly items like water treatment, would be expanding, and other manufacturers would soon be growing in the greater Whatcom County area. A huge array of manufactured goods comes from the Bellingham area, including saw blades, high-performance brakes, ultrasonic gel, anchor chain, remanufactured engines, precast concrete, natural pet foods, construction-grade lumber and fiberglass boats, according to the Port of Bellingham.

Lima, Ohio

The manufacturing sector in Lima employs nearly 46,000 people and pays an average salary of more than $67,000 a year, according to TownSquare Publications. Though hurt badly in the 2007 recession, Lima recovered, and today is home to Proctor & Gamble, Ford, and General Dynamics. Lima also hosts the Joint Systems Manufacturing Center, the nation’s only factory that still produces tanks for the U.S. military. If anything, the city’s main challenge for the future is attracting a steady stream of new workers. Lima’s manufacturing output per capita was just under $40,000 in 2018, according to AdvisorSmith.


Beaumont, Texas

A century ago, Beaumont translated the riches of the Spindletop oil deposits to become the second-largest refinery in the nation. Today, Beaumont is quickly growing again, but in manufacturing. Employment in machinery manufacturing and electrical equipment manufacturing grew 53 and 45 percent, respectively, between 2010 and 2017, according to a Federal Reserve Bank of Dallas special report. The city’s largest employers include ENGlobal Corp., ExxonMobil, Goodyear Tire & Rubber, Motiva Enterprises and Valero Refining Group. Beaumont’s manufacturing output per capita in 2018 was $36,000, according to AdvisorSmith.

Savannah, Georgia

Manufacturing comprised nearly a quarter of the Savannah area’s economic output in 2017, according to the Savannah Chamber of Commerce. In real terms, that translates to slightly more than 22,000 people working at 346 plants. Growth in manufacturing employment held steady in 2017, 2018, and into 2019. One major employer, Gulfstream Aerospace, employs 11,000 workers for production, maintenance, engineering, research, and development. Another Savannah firm, JCB, has about 600 workers who build light capability, rough terrain forklifts for the Department of Defense. All told, Savannah is responsible for about $2.3 billion in manufacturing exports.

Yuma, Arizona

In 2018, AQST Space Systems Group, which provides strategic planning to space and defense industry in satellites, space systems, artificial intelligence, and robotic, was looking to move its secured manufacturing operation out of Puerto Rico. The company ended up choosing Yuma because of its friendly business environment, infrastructure, turnkey facilities, and support, according to the city of Yuma. This makes sense, given that the city’s manufacturing employment growth rate was second in the nation from 2014 to 2018, according to AdvisorSmith, and 10th in the U.S. in terms of manufacturing output growth.

Palm Bay, Florida

Defense and semiconductors are big business in Palm Bay—so big that the manufacturing industry is growing faster there than in any other Florida city, according to Space Coast Daily. The 2018 AdvisorSmith study reported that manufacturing output per capita in Palm Bay was $7,494, which was about $450 higher than the national average. The Palm Bay Chamber of Commerce says more than 500 manufacturers call Palm Bay and surrounding Brevard County home, including Patriot Fire Defense, Technolink, Inmarsat, and Advanced Magnet Lab. The chamber also boasts that its Made in Brevard program, which highlights the work of local manufacturers, helps encourage further investment.

Bremerton, Washington

Bremerton has been a manufacturing center for more than a century. The workshops, plants, and yards in the city and surrounding Kitsap County build an astonishing variety of products, including office furniture, prosthetic devices, fly fishing rods, LED lighting, unmanned underwater vehicles, patrol boats, schooners, and aircraft carriers, according to the Kitsap Economic Development Alliance. The compound growth rate of manufacturing employment at Bremerton was nearly five percent, according to AdvisorSmith. The Puget Sound Regional Council has also designated Bremerton to be one of eight Manufacturing/Industrial Centers in the region.

Clarksville, Tennessee

Manufacturing labor grew in Clarksville by an incredible 10 percent during 2018, according to a recent study by Kempler Industries. This shouldn’t be surprising, given that in the five years prior to the study, manufacturing employment grew 17 percent, according to USA Today. Data from the Clarksville/Montgomery County Economic Data Center shows the manufacture of automotive parts and industrial machinery have seen especially high rates of growth in recent years—58 percent and 34 percent, respectively. Major employers include Akebono (hubs and rotors), Bridgestone (steel cord), Hendrickson (tractor-trailer air-ride) and Trane (heating and air-conditioning equipment).

Reno, Nevada

The Economic Development Authority of Western Nevada says manufacturing is the fastest growing industry in the greater Reno area. In fact, AdvisorSmith recently ranked Reno seventh on its list of America’s 50 strongest manufacturing economies. Reno offers business-friendly regulations, 80 million square feet of affordable industrial space, some of the lowest electricity costs in the Western U.S., and a hard-working, educated labor force. Some of Reno’s biggest manufacturers are Trex (wood-alternative decking), Tyco (security systems), IGT (slot machines), and James Hardie (building materials).

Ogden, Utah

Manufacturing employment grew in Ogden nearly 18 percent between 2012 and 2017, according to USA Today. That means these days the city’s labor force produces $3.2 billion worth of manufacturing exports. Aerospace is a key part of the industry there, especially since the city is just two miles from Hill Air Force Base. ATK, which builds weapons systems for the U.S. military, has an operation in Ogden, as does Parker Hannifin, which makes aircraft hydraulic and control systems. Other manufacturers include Chromalox (heating elements), JBT Aerotech (commercial aircraft boarding bridges), Levelor (window blinds), and Kimberly-Clark (diapers).

site selection
Archives, Global Trade Daily, Site Selection, State Spotlight, Top Cities

Our Annual Governor’s Cup Ranks Top 10 Southern States for Site Selection Incentives

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A funny thing happened on the way to compiling Global Trade’s latest Annual Governor’s Cup feature on state site selection incentives: the preponderance of states from the South that offer more attractive benefits than just about anywhere else in the country.

Rather than cast the net wide enough to include non-southern states for the sake of comprehensiveness, we decided to this year focus more strongly on the country’s hottest region. There are 16 states in the American South, and based on data and statistics from the U.S. government and various business, industry and media entities, we have ranked the top 10.

It must be mentioned that differing sources had Tennessee and Georgia as the top state among all 50 when it comes to site selection incentives. We did not flip a coin but instead gave The Volunteer State the ever-so-slight edge based on the quality of incentives offered. Really, you would do well to start up or relocate in either state or, heck, any of the 10 that follow.

1. TENNESSEE

Capital: Nashville

Population: 6.77 million

GDP: $287.77 billion (2-16)

Largest cities: Nashville, Memphis, Knoxville, Chattanooga

Targeted industries: Business Services, Chemicals, Plastics & Rubber, Food & Agribusiness, Distribution & Logistics, Aerospace & Defense, Transportation, Healthcare & Medical Devices, Energy Technology, Automotive, Advanced Manufacturing

Site location success story: Amazon opening a major operations and logistics office hub in Nashville that creates 5,000 high paying jobs and pumps $230 million into the local economy.

Key agency: Tennessee Department of Economic & Community Development

Key site-selection incentives:

*Fast Track Economic Development Fund, which provides grants to local communities to reimburse companies for eligible expenditures not covered by infrastructure or job training grants, including relocation of equipment, temporary office space, capital improvements and retrofitting.

*Job Tax Credit of $4,500 per job to offset up to 50 percent of franchise and excise taxes (F&E) in any given year with a carry forward for up to 15 years so long as businesses create at least 25 net new full-time positions within a 36 month period and invest at least $500,000 in a qualified business enterprise.

*Enhanced Job Tax Credit, which allows an additional annual credit for locations/expansions in designated Tier 2, Tier 3 and Tier 4 Enhancement Counties and can offset up to 100 percent of F&E liability.

*Industrial Machinery Tax Credit of 1-10 percent for the purchase, third party installation and repair of qualified industrial machinery used in manufacturing, warehousing and distribution and at headquarters and call centers.

*Sales and Use Tax Exemptions at headquarters or for industrial machinery and reduced sales tax rates for utilities at qualified call centers, data centers and warehousing, distribution and manufacturing facilities.

*Research and Development sales tax exemption.

*FastTrack Job Training Assistance Program for new or expanding companies that provide funding to support the training of net new full-time employees.

*Export Assistance that includes networking, training and free planning services and trade and travel assistance.

2. GEORGIA

Capital: Atlanta

Population: 10.52 million (2018)

GDP: $461.1 billion (2016)

Largest cities: Atlanta, Columbus, Augusta, Macon

Targeted industries: Call Centers, Cybersecurity, Financial Technology, Food Processing, Logistics, Automotive, Life Sciences, Aerospace, Information Technology, Manufacturing, Headquarters

Site location success story: Brazil’s Guidoni Group, which is one of the leading producers and exporters of ornamental stones in the world, locating a manufacturing facility in McRae-Helena that creates 455 jobs and invests $96 million. The project is slated to open in 2020’s third quarter.

Key agency: Georgia Department of Economic Development

Key site selection incentives:

*No real or personal property tax, no state property tax on inventory and 5.75 percent corporate income tax.

*Inventory Tax Exemption, where counties and municipalities have the option of enacting a local property tax exemption for four classes of inventory at 20, 40, 60, 80 or 100 percent of the value.

*Investment Tax Credit for companies to upgrade or expand as long as they have operated a manufacturing or telecommunications facility (including corporate office and other support facilities) for at least three years in the state.

*Mega Project Tax Credit, which is available for companies that employ at least 1,800 net new employees, and either invest a minimum of $450 million or have a minimum annual payroll of $150 million.

*Port Tax Credit Bonus rewards new or expanding companies that increase imports or exports through a Georgia deepwater port by at least 10 percent over the previous or base year. It can be used with the Job Tax Credit program or the Investment Tax Credit program.

*Quality Jobs Tax Credit for jobs that pay higher-than-average wages.

*Research & Development Tax Credit for Georgia companies performing qualified research and development in manufacturing, telecommunications, broadcasting,

warehousing & distribution. R&D, processing and tourism.

3. SOUTH CAROLINA

Capital: Columbia

Population: 5 million (2017)

GDP: $183.8 billion (2016)

Largest cities: Charleston, Columbia, North Charleston, Mount Pleasant

Targeted industries: Advanced Materials, Distribution & Logistics, Aerospace, Automotive, Office/Shared Services, Life Sciences, Advanced Manufacturing

Site location success story: AIRSYS Cooling Technologies Inc., global information, communication and technology cooling solution provider, establishing operations in Spartanburg County, where more than $5 million is to be invested and 116 new jobs created.

Key agency: South Carolina Department of Commerce

Key site-selection incentives:

*Economic Development Set-Aside Program that assists companies in locating or expanding in South Carolina by providing financial assistance for road or site improvements and other costs related to business location or expansion.

*Single Factor Sales Apportionment for a company whose primary business in the state is manufacturing, distribution or selling or dealing intangible personal property. The apportionment formula is advantageous for a company whose majority of sales occur outside of South Carolina.

*Corporate Headquarters Credit of 20 percent based on the cost of the actual portion of the facility dedicated to the headquarters operation or direct lease costs for the first five years of operation.

*Credit for Revitalization of Abandoned Buildings, of which at least 66 percent has been closed continuously or otherwise nonoperational for at least five years.

*Fee-in-lieu of Property Taxes may be offered by a county to companies with a total investment of $2.5 million or greater on new buildings and equipment.

*Investment Tax Credit that allows manufacturers a one-time corporate income tax credit for a company’s investment in new production equipment.

*Job Development Credit that can refund a portion of state withholding tax liability for 10-15 years.

*Port Volume Increase Credit for manufacturers, distributors or entities engaged in freight forwarding, freight handling, goods processing, cross-docking, transloading or wholesaling of goods that use state port facilities and increase base port cargo volume by at least 5 percent over base-year totals.

*Research & Development Tax Credit equal to 5 percent of the taxpayer’s qualified research expenses in the state.

4. NORTH CAROLINA

Capital: Raleigh

Population: 10.2 million (2017)

GDP: $538.3 billion (2017)

Largest cities: Charlotte, Raleigh, Greensboro, Durham

Targeted industries: Biotech & Pharmaceuticals, Automotive, Aerospace & Defense, Agribusiness & Food Processing, Business & Financial Services, Information & Communication Technology, Truck & Heavy Equipment

Site location success story: Merck, a leading global biopharmaceutical company, investing $57 million to establish a filling and packaging line for the company’s RotaTeq vaccine and create 55 jobs in Wilson.

Key agency: Economic Development Partnership of North Carolina

Key site-selection incentives:

*Job Development Investment Grant that provides cash grants to new and expanding businesses to help offset the cost of locating or expanding in North Carolina.

*One North Carolina Fund that allows the governor to respond quickly to competitive job-creation projects that do also require a local match.

*Building Reuse Programs for renovation and upfitting vacant industrial and commercial buildings.

*Singles Sales Factor Apportionment that determines how much of a corporation’s income is subject to state tax based solely on its revenue from sales located in or sourced to North Carolina.

*Sales and Use Tax Exemptions for specified manufacturing, fulfillment, data centers and more.

5. ALABAMA

Capital: Montgomery

Population: 4.87 million (2017)

GDP: $211 billion (2017)

Largest cities: Birmingham, Montgomery, Huntsville, Mobile

Targeted industries: Aerospace/Defense Manufacturing, Automotive Manufacturing, Chemical Manufacturing, Agricultural Products/Food Production Manufacturing, Steel/Metal Manufacturing, Distribution & Logistics, Information Technology

Site location success story: Airbus’ first single-aisle A220 passenger jet rolling out this year at its second Mobile campus, which opened last year.

Key agency: Economic Development Partnership of Alabama

Key site-selection incentives:

*Alabama Department of Commerce’s Certified Capital Company (CAPCO) Program offers an alternative to conventional bank financing to accommodate a slightly higher risk profile and provide a more flexible structure for growing businesses in the state.

*Industrial Revenue Bonds, which are tax-exempt and issued at rates lower than conventional sources, may be used as long-term financing of up to 100 percent of a project for acquisition of land, buildings, site preparation and improvements; building, furnishing and filling structures; and “soft costs” such as architectural and engineering, interest incurred during construction, cost associated with bond issuance, etc.

*Investment Credit for a qualifying project for up to 10 years and can be taken against the Alabama income tax liability and/or utility tax liability.

*Jobs Credit annual cash rebate up to 3 percent of the previous year’s gross payroll (not including fringe benefits) for eligible employees for up to 10 years. The rebate rises if at least 12 percent of employees are veterans.

6. TEXAS

Capital: Austin

Population: 28.3 million (2017)

GDP: $1.7 trillion (2017)

Largest cities: Houston, San Antonio, Dallas, Austin

Targeted industries: Advanced Technologies & Manufacturing, Energy, Information & Computer Technology, Petroleum Refining & Chemical Products, Biotech & Life Sciences, Aerospace & Defense

Site location success story: United Alloy Inc., a serial production metal fabrication and powder coating company, building its new state-of-the-art, 200,000-square-foot manufacturing facility on a 27-acre site in Seguin, which benefits from at least 100 new jobs and $35 million in total capital investment over a three-year period.

Key agency: The Governor’s Office of Economic Development & Tourism | Gov.texas.gov/business | (512) 936-0100

Key site-selection incentives:

*Capital Access Program financing for small and medium-sized businesses and non-profits which face barriers to accessing capital or fall outside of guidelines of conventional lending.

*Industrial Revenue Bonds that provide tax-exempt financing for land and depreciable property for eligible industrial or manufacturing projects.

*Spaceport Trust Fund financial support for the development of infrastructure necessary or useful for establishing a spaceport in Texas.

*Texas Enterprise Fund awards “deal-closing” cash grants to companies considering a new project for which one Texas site is competing with other out-of-state sites.

*Texas Product Development & Small Business Incubator Fund long-term, asset-backed loans to product development companies and small business incubators/accelerators located in Texas.

*Business Relocation Tax Deduction & Exemption for qualified businesses relocating to Texas.

*Renewable Energy Incentives for any qualifying Texas business that exclusively manufactures, sells or installs wind or solar energy devices.

*State Sales & Use Tax Exemptions for rented, leased or purchased machinery, equipment, replacement parts and accessories that have a useful life of more than one year or 12 months, and that are used or consumed in the manufacturing, processing, fabricating or repairing of tangible personal property for ultimate sale.

*Texas Economic Development Act incentives for large-scale manufacturing, research and development and other large capital investment projects that locate in Texas.

*Texas Enterprise Zone Program state sales and use tax refunds for private investment and job creation in economically distressed areas of the state.

*Texas Research & Development Tax Credit sales tax exemption when buying materials, software and equipment directly used in qualified R&D purposes.

 7. KENTUCKY

Capital: Frankfort

Population: 4.45 million (2017)

GDP: $202.5 billion (2017)

Largest cities: Louisville, Lexington-Fayette, Bowling Green, Owensboro

Targeted industries: Automotive Related Engineering & Manufacturing; Aerospace; Advanced Manufacturing; Logistics & Distribution; Food & Beverage; Aluminum & Steel Related Manufacturing; Chemicals, Plastic & Rubber

Site location success story: The first Kentucky operation for Precision Pulley & Idler, a supplier of idlers, pulleys, bearings and other products for the major bulk and material handling components industries. The $10.75 million production facility in Maysville creates more than 100 full-time jobs over the next decade.

Key agency: Kentucky Association for Economic Development

Key site-selection incentives:

*Direct Loan Program loans at below-market interest rates for fixed asset financing for agribusiness, tourism, industrial ventures or the service industry. Retail projects are not eligible.

*Industrial Revenue Bonds to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most health care facilities, and mineral extraction and processing projects.

*Kentucky Enterprise Fund and Rural Innovation Fund seed-stage capital for companies that are commercializing a technology-based product or process.

*Kentucky New Energy Ventures Fund seed stage capital to support the development and commercialization of alternative fuel and renewable energy products, processes and services.

*Kentucky Small Business Credit Initiative and Small Business Loan Program loans for small businesses engaged in manufacturing, agribusiness or service and technology.

*Angel Investment Tax Credit of up to 50 percent of an investment in Kentucky small businesses; the investor and business much each apply.

*Kentucky Business Investment Program income tax credits and wage assessments to new and existing agribusinesses, regional and national headquarters, manufacturing companies, alternative fuel, gasification, energy-efficient alternative fuels, renewable energy production companies, carbon dioxide transmission pipelines and non-retail service or technology related companies that locate or expand operations in Kentucky.

*Kentucky Enterprise Initiative Act tax breaks for new or expanded companies engaged in manufacturing, non-retail service or technology activities, agribusiness, headquarters operations, alternative fuel, gasification, energy-efficient alternative fuels, renewable energy production companies, carbon dioxide transmission pipelines, or tourism attraction project in Kentucky.

*Kentucky Industrial Revitalization Act tax credits for the rehabilitation of manufacturing or coal mining and processing operations that are in imminent danger of permanently closing or that have closed temporarily.

8. VIRGINIA

Capital: Richmond

Population: 8.47 million (2017)

GDP: $508.7 billion (2017)

Largest cities: Virginia Beach, Norfolk, Chesapeake, Richmond

Targeted industries: Cyber Security, ­ Software Publishing, Data Centers, Information/Communications Technologies, Corporate Services, ­ Headquarters, Supply Chain Management, Food & Beverage Processing, Advanced Materials, Aerospace, Automotive, Wood Products, Life Sciences, Unmanned Systems

Site location success story: Cascades, a Canadian packaging and tissue products producer, paid $40 million and plans to invest up to $300 million more to replace the Bear Island paper mill that shut down in Hanover County in 2017. The facility that’s planned to reopen in 2021 will employ 140 workers.

Key agency: Virginia Economic Development Partnership

Key site-selection incentives:

*Virginia Economic Development Incentive Grant for those locating significant headquarters, administrative or service sector operations in the state.

*Virginia Investment Performance Grant for companies involved in added capacity, modernization, increased productivity or the creation, development and utilization of advanced technology.

*Port of Virginia Economic and Infrastructure Development Grant Program for companies that locate new maritime-related employment centers or expand existing centers in the Commonwealth that foster the port’s growth.

*Virginia Small Business Financing Authority programs for small businesses that need access to capital for growth and expansion.

*Rail Industrial Access Program connecting businesses to freight rail service by funding the construction or improvement of railroad tracks and facilities to serve industrial or commercial sites where freight rail service is currently needed or anticipated in the future.

*Corporate Income Tax Credits for multiple industry and business sectors.

*Property Tax Exemptions for multiple types of industry and business property, equipment and tools.

*Sales & Use Tax Exemptions on gross receipts derived from retail sales or leases of tangible personal property, unless the retail sales or leases are specifically exempt by law.

9. MISSISSIPPI

Capital: Jackson

Population: 2.98 million (2017)

GDP: $111.7 billion (2017)

Largest cities: Jackson, Gulfport, Southaven, Hattiesburg

Targeted industries: Aerospace, Advanced Manufacturing, Shipbuilding, Agribusiness, Automotive, Forestry & Energy, Healthcare

Site location success story: Amazon leasing a 1 million-square-foot facility in DeSoto County’s Olive Branch for a fulfillment center that brings 500 new full-time jobs. Just 11 months ago, Amazon disclosed plans for its Marshall County fulfillment center that’s employing 850 workers.

Key agency: Mississippi Economic Development Council

Key site-selection incentives:

*Development Infrastructure Grant Program to finance infrastructure projects for manufacturers, warehouses and distribution centers, research and development facilities, telecommunications and data processing facilities and national or regional headquarters.

*Energy Efficiency Revolving Loan Program for businesses and other eligible entities that are increasing energy efficiency in their buildings, equipment and processes.

*Standard Property Tax Exemptions that local governing authorities may grant businesses locating or expanding in their areas for up to 10 years.

*Industrial Revenue Bond Program to finance companies’ location or expansion projects in the state.

*Advantage Jobs Incentive Program for businesses that create new, high-quality jobs through locating or expanding in the state.

*Growth and Prosperity Program state income tax, franchise tax and property tax exemptions for up to 10 years, as well as a sales and use tax exemption on equipment and machinery purchased during initial construction or an expansion at an approved facility.

*Jobs Tax Credit equal to a percentage of payroll for each newly created job for a five-year period for eligible businesses.

*Mississippi Aerospace Initiative Incentives Program is a 10-year income and franchise tax exemption and a sales and use tax exemption for the start-up of a new facility or expansion of an existing facility that manufactures or assemble products for use in—or that provides research and development or training services to—the aerospace industry.

*Mississippi Clean Energy Initiative Program is a 10-year income and franchise tax exemption and a sales and use tax exemption for the start-up of a new—or expansion of an existing—clean energy business.

*Mississippi Data Center Incentives for a business enterprise certified by the state as a data center.

*National or Regional Headquarters Sales Tax Exemption for an eligible business that creates or expands its national or regional headquarters in the state.

*Property Tax Exemption for Industrial Revenue Bond Financing.

*Property Tax Exemption on In-State Inventory (finished goods that will remain in the state).

*Research and Development Skills Tax Credit for a five-year period for each position requiring R&D skills.

10. LOUISIANA

Capital: Baton Rouge

Population: 4.68 million (2017)

GDP: $246.3 billion (2017)

Largest cities: New Orleans, Baton Rouge, Shreveport, Metairie

Targeted industries: Software Development, Energy, Automotive, Advanced Manufacturing, Aerospace, Process Industries, Agribusiness, Water Management, Entertainment

Site location success story: Testronic, a leading quality assurance firm in the digital gaming industry, launching a new 150-job testing facility in New Orleans that will result in another 169 new indirect jobs, for a total of 319 new jobs in New Orleans and the Southeast Region.

Key agency: Louisiana Economic Development

Key site-selection incentives:

*Competitive Projects Property Tax Exemption for non-manufacturing industry sectors, including corporate headquarters, distribution facilities, data services facilities, research and development operations, and digital media and software development centers.

*Economic Development Award Program financial assistance to influence a company’s decision to locate, relocate, maintain, rebuild and/or expand its business operations in Louisiana.

*Industrial Tax Exemption Program, which offers an attractive tax incentive for manufacturers who make a commitment to jobs and payroll in the state.

Sources: Bureau of Economic Analysis, U.S. Department of Commerce, BusinessFacilities.com, Site Selection Group, Area Development.

 

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Archives, Banking, Global Trade Daily

The Silver Lining of the Baltic Banking Crisis

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The continuing revelations as to the extent of money laundered through Baltic banking systems, most notably the dramatic accusations against Danske Bank (which are now pulling in Deutsche Bank as well) were an unfortunate blow to the Baltic states’ reputations as dynamic and safe markets for foreign investments in Europe. However, substantial media scrutiny and the public and private sector response may actually result in a safer financial environment for investments and business operations in Estonia, Latvia and Lithuania as well as an improved EU structure to deal with money-laundering.

A Series of Money-Laundering Failures brings Global Scrutiny to the Baltics

Danske Bank, the headlining financial institution at the heart of the massive $280 billion money-laundering investigation, has already pulled out of Russia and the Baltic States as a result of its misadventures in the region. Other banks, however, were also caught laundering funds from Russian, Ukrainian, Chinese and North Korean sources in the last few years, including Swedbank.  Although the majority of the scandal has been laid at the feet of Estonian and Latvian banks and financial oversight bodies, Lithuania has not survived unscathed and ongoing investigations will likely expose additional breaches in finance laws and EU and U.S. sanctions regimes.

While the scandal has put a dent into the business reputation of Estonia and Latvia, the resulting scrutiny and investigations are likely to improve transparency in the region and improve legal regimes and oversight structures for international business operations moving forward.  The heightened focus on anti-money laundering (AML) tools has also spurred tech innovation, leading to the creation of critical private-sector expertise to help consumers and businesses identify and fight money-laundering activities.

Exposing the Weakness in EU Mechanisms

The scandal exposed not just national-level problems, it highlighted an EU-wide gap in AML mechanisms. The decentralized nature of AML regulation and the lack of coordination amongst country regulators and oversight bodies across the EU provides opportunities for abuse. Lack of formal channels of communication, inter-agency / regulator dialogue and cooperation weakens the overall ability of any one country to effectively share information, pool resources and fight trans-national financial criminal activity.

Additionally, integral to the EU’s current challenges has been the deficiency in adoption vs. implementation. Larger EU states such as France and Germany traditionally maintain sufficient financial and human resources to not only transpose EU AML Directives into local legislation, but to ensure effective implementation. Scarcity of expertise, limited capacity and shortfalls in funding among smaller states such as Cyprus, the Baltic states and Malta, on the other hand, have hindered the effectiveness of resulting oversight processes and procedures to reduce money laundering. There is a growing recognition as to this weakness in the system, and a recent joint proposal from finance ministers of France, Germany, Italy, Latvia, the Netherlands, and Spain to create a centralized anti–money laundering (AML) supervisor with EU-wide authority may help to close this gap.

Finally, the anonymous nature of cryptocurrency and digital assets have made them attractive to illicit users interested in perpetrating money laundering and terrorism financing. Their use in recent cases has exposed the need throughout the EU for further innovations in their regulation and oversight to ensure transparency, accountability and legality of digital asset transactions.

In response to these challenges, the EU has adopted the 5th Anti-Money Laundering Directive which is required to be transposed into local law by Member States by January 2020. Although transposition into local law is required by January 2020, the key to determining the success of this legislation will be dependent upon the resources and ability to implement. Strong centralized technical support, human and financial resources should be provided – especially to smaller Member States – as they work to locally adopt and transform these concepts into practice.

The Revelations have Spurred Innovation

Concerns over money laundering have forced the government to take action (albeit rearguard in nature) but have also sparked concern from the business community, which is equally concerned about the stability of the national and regional financial system. Taavi Tamkivi, CEO of Salv, the Estonian AML-focused start-up funded by Transferwise and Skype employees, noted that although the incidence of such AML cases in Estonia is disappointing, the fact that they were brought to light speaks to the Estonian commitment to transparency, accountability, and responsibility. Recent scandals have brought into the open the weaknesses in the Estonian system and instead of hiding these scandals or shirking responsibility, the Estonian government, regulators and private sector have come together to learn from these investigations, strengthen their systems and develop world-class systems of AML. Tamkivi went on to note that Know Your Customer (KYC) efforts and risk profiling of new clients are important but must be coupled with monitoring the millions of transactions flowing through financial institutions every day for suspicious behavior.

Additionally, data sharing between and amongst banks and the government is needed to ensure comprehensive understanding and communication of suspected criminal activity. The only way to undertake such intensive oversight is through innovations in technology. Tamkivi noted that “Estonia is known for its e-residency and digital-centric culture, so I’m confident we can find smarter ways to share and use the data we all have; protecting individuals, but catching more criminals. With the right technology, we can really solve it.  Moving fast is the only way to keep up with the innovative organized criminals moving millions or billions around the world.”

Tamkivi went on to share an important aspect of the Baltic business environment which highlights the resiliency and affinity for innovation: “You can think of the Baltics nations, in many ways, as country-sized startups. We witnessed the mistakes and pitfalls of long-established nations from afar and, when we gained re-independence in the early 90s, we were able to start afresh. So, if you take a close look, you’ll find a dense web of fresh ideas and innovation woven into our structures. Sometimes, like Skype, TransferWise, and Bolt they do manage to kick off a profound change in the world.”

The Baltic Region Represents some of the Best Locations for Business Expansion in Europe

The innovative atmosphere that gave rise to tech companies such as Skype and Transferwise, vaulted Vilnius into the position of number one startup city for tech in the world, helped to launch the NATO Cooperative Cyber Defence Centre of Excellence and has all three countries listed in the top 20 for innovation globally by the World Bank Group is an astounding opportunity for foreign investors.  But the technology sector is not the only attraction to the Baltic economies.

According to the World Bank Group “Doing Business” assessment of jurisdictions, Lithuania, Estonia and Latvia rank 11th,  18th, and 19th respectively and all three rank highly on global lists for innovation, safety and quality of life.  The business-friendly nature of the Baltic countries coupled with their attractive cost of living provide a natural advantage in attracting a wide variety of global businesses. In 2018, Lithuania, Estonia and Latvia each outperformed the estimated EU hourly labor costs for the EU-28.

Closing the Gaps in the System

Estonia, Latvia, and Lithuania need to take quick and decisive action to prevent money-laundering in the future, as does the EU, which is facing similar problems in banking systems in Malta, Cyprus and other member states.  But while the Danske Bank scandal is a black mark on the region, a robust response to these concerns by governments and innovative private companies such as Salv and others will ensure that the thriving Baltic market becomes an even more attractive location for foreign investment projects by reducing investor exposure and political risk concerns.  As Taavi notes ‘…though many of the recent negative headlines came from Estonia, that may not necessarily be as bad as it first appears. Everyday Estonians are notorious for their commitment to transparency, and taking responsibility for mistakes. And, honestly, now that scandals are out in the open, we can all learn from the investigations. I wouldn’t even be surprised if, as a result, Estonia then grows some of the greatest AML experts in the region.”

___________________________________________________________

Gabriella Kusz, CPA is an international economic and financial sector development expert with experience in the areas of financial sector strengthening, governance, and regulation.  Ms. Kusz has held senior-level positions at the World Bank Group as well as with the International Federation of Accountants. 

Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company which offers market research, political risk assessment, and international negotiations assistance.  Mr. Samson is a former U.S. diplomat and international law advisor.

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Archives, Best Cities, Global Trade Daily

America’s Best Cities: Houston Tops Global Trade’s Seventh Annual Roundup

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For Global Trade’s seventh annual list of America’s Best Cities, we have crunched the numbers from various public and private sources regarding ports, education, utilities, NAFTA access, export assistance, intermodal access, skilled workforce, transportation, workforce development programs and quality of life.

We ranked the 10 best cities for each related category, awarding points that ultimately put Houston, Texas, over the top as America’s Best City.

Houston is used to topping such lists, as we note with its separate No. 1 ranking on the U.S. Department of Commerce International Trade Administration’s 2018 goods export data for the nation’s 392 Metropolitan Statistical Areas.

Incidentally, that government data showed U.S. metro areas exported a significant $1.5 trillion in merchandise across the world in 2018, a $110.3 billion (or 8.1 percent) increase from the year before. Of the 259 metropolitan areas that reported positive export growth, 94 reached record levels.

“The Trump Administration is committed to addressing trade imbalances, breaking down trade barriers, and providing U.S. companies with new reach in foreign markets,” said Under Secretary of Commerce for International Trade Gilbert Kaplan. “With this increase in exports over the last year and the continued work of the Commercial Service, it is a fruitful time for American businesses.”

Charts throughout this section show the top cities and their rankings overall and in key areas, while honorably mentioned are the top 10 cities to watch, any of which could be on the way to leading a future Global Trade list of America’s Best Cities. But first, here are the top 20 cities, with their rankings, overall scores and some details about what made them leaders.

1. Houston

Overall score: 44

Top category: Education and Colleges (No. 1)

The Houston-The Woodlands-Sugar Land metropolitan area also topped the U.S. Department of Commerce International Trade Administration’s 2018 goods export data for the nation’s 392 Metropolitan Statistical Areas. That Texas metropolitan area had $120.7 billion in goods exports while also showing the highest annual dollar growth in exports, expanding $25 billion from 2017 to ’18.

2. Minneapolis

Overall score: 38

Top category: Skilled/Educated Workforce (No. 4)

Eight miles west of Minneapolis is Minnetonka, which is home to a key player in the region’s beefy export data. Cargill Inc. reported global beef sales helped lead the nation’s largest privately held company to a $915 million profit for the quarter ended Aug. 31. Minnesotans can moo about state exports rising 10 percent to a record $23 billion in 2018, outpacing the nation’s 8 percent jump.

3. Chicago

Overall score: 37

Top category: Transportation Infrastructure (No. 5)

Trading defines Chicago’s importance as a major international city, with two of the biggest commodity exchanges based there. With exports of $47.3 billion, the Chicago-Naperville-Elgin (Illinois-Indiana-Wisconsin) Metropolitan Statistical Area was fifth the U.S. Department of Commerce International Trade Administration’s 2018 goods export data for the nation’s 392 MSAs.

4. New York

Overall score: 32

Top category: Capable, Connected and Logistically Viable Ports (No. 1)

“If you want to start a business, create a new product or have a big idea, New York City is the place to be,” then-mayor Michael Bloomberg said in 2012. That remains true today of the world’s epicenter of finance, communication and culture. The New York-Newark-Jersey City (New York-New Jersey-Pennsylvania) Metropolitan Statistical Area came in second in the U.S. Department of Commerce International Trade Administration’s 2018 goods export data for the nation’s 392 MSAs, with exports of $97.7 billion.

5. Seattle

Overall score: 29

Top category: Transportation Infrastructure (No. 4)

About 70 percent of the Port of Seattle’s containerized cargo originates in, or is destined for, regions of the country outside the Pacific Northwest, making Seattle a trade gateway of regional, national and international significance. That’s partly due to being closer to Asia and Alaska than any other major U.S. seaport and also to two major U.S. railroads being within two miles of container terminals, and two major interstate highways just minutes from all terminals. With exports of $59.7 billion, the Seattle-Tacoma-Bellevue MSA came in fourth in the U.S. Department of Commerce International Trade Administration’s 2018 goods export data rankings.

6. Los Angeles

Overall score: 27

Top category: Transportation Infrastructure (No. 3)

Home to Hollywood, Los Angeles means showbiz, with movie studios, TV stations, and more. Its West Coast location also makes it a key hub for trade with Asia. With exports of $64.8 billion, the Los Angeles-Long Beach-Anaheim Metropolitan Statistical Area was third in the U.S. Department of Commerce International Trade Administration’s 2018 goods export data for the nation’s 392 MSAs.

7. San Francisco

Overall score: 25

Top category: Education and Colleges (No. 7)

San Francisco has a long history as an international gateway and is one of the major global business centers in the U.S.; its home to international companies such as Kikkomann (Japan), GCL Solar (China), Aegon (Netherlands), Deutsche Bank (Germany) and Globant (Argentina). ‘Frisco has also gained an international reputation as a center for innovation and entrepreneurship, with many global brands having been founded there, including GAP, Levi Strauss, URS Corp., Gensler, Salesforce and Twitter.

8. Atlanta

Overall score: 20

Top categories: Transportation Infrastructure and Intermodal Access (No. 2)

“Hot-lanta” was the 16th largest exporter in the U.S. in 2016, with a 7 percent increase over the previous year leading to $20.5 billion in the total Atlanta goods export value. What’s more, that represented a whopping 80 percent jump in export growth from 2006.

9. New Orleans

Overall score: 19

Top category: Capable, Connected and Logistically Viable Ports (No. 9)

Ports situated along the Mississippi River—from Baton Rouge to Myrtle Grove—are close enough together (some are even adjacent) to act as one large port complex often referred to the New Orleans Port Region. The region brings together all modes of transportation (ocean, barge, rail and truck) to link ports 228 miles upriver from the Gulf of Mexico with the gulf, Caribbean Sea, Atlantic Ocean and Panama Canal. The Port of South Louisiana moves more tonnage than any other North American port.

10. Austin

Overall score: 17

Top category: Skilled/Educated Workforce (No. 8)

You likely know that Austin is the state capital of Texas, home to the University of Texas flagship campus and the site of a thriving art, film, music and cultural scene. What you may not know is, with a population of more than 945,000 people, the Austin-Round Rock area is the 28th largest exporter in the U.S., exporting about $10.1 billion in goods and services annually.

11. Boston

Overall score: 15

Top category: Skilled/Educated Workforce (No. 5)

With M.I.T. and Harvard’s intellectual capital and strong financial markets, Boston possesses a wealth of infrastructure to accommodate global traders. The transportation infrastructure alone, which hubs six New England states, includes a deepwater port, three interstates, Amtrak and Conrail railroads and busy Logan Airport.

12. Omaha and Savannah

Overall score: 14 each

Top Omaha category: Developed Workforce/Development Programs (No. 4)

Top Savannah category: Intermodal Access (No. 6)

Greater Omaha is growing places. Over the past 10 years, exports in that region of Nebraska have increased by $1.9 billion, growing an average of 0.9 percent each year. Despite Savannah’s East Coast location, the historic Georgia city’s top trade lane for both export and import cargo is northeast Asia.

13. Denver

Overall score: 13

Top categories: Skilled/Educated Workforce and  Developed Workforce/Development Programs (No. 1)

Colorado exports increased 3.3 percent in 2018 to $8.32 billion, up from $8.06 billion in 2017. Being strategically located between Canada and Mexico allows metropolitan Denver to capitalize on NAFTA opportunities. That explains why Canada, with $1.4 billion in 2018 export value, and Mexico, which was just behind at $1.3 billion, are Colorado’s largest trading partners.

14. Jacksonville and Milwaukee

Overall score: 12 each

Top Jacksonville category: Capable, Connected and Logistically Viable Ports (No. 5)

Top Milwaukee category: Export Assistance (No. 2)

JAXPORT, as the cool kids call the Port of Jacksonville, annually ranks with nearby Brunswick, Georgia, and Baltimore as being among the top three U.S. ports in roll-on, roll-off vehicle shipments. High and heavy shipments are also growing at JAXPORT. With more than 2 million people and 50,000 businesses, the seven-county Milwaukee Region, which is centrally located on the Great Lakes, has a reputation for innovation, quality, ease and choice. In 2018, Wisconsin goods exports were $22.7 billion, an increase of 10 percent ($2.1 billion) from its export level in 2008.

15. Boise

Overall score: 11

Top category: Best City to Live in (No. 4)

Given Idaho’s population of 1.754 million people, its total $4 billion in 2018 exports translates to roughly $2,300 for each Gem State resident. Most of that export activity is centered in Boise, which is experiencing a boom due to its affordability and quality of life.

16. Charleston, Detroit, Washington, D.C.

Overall score: 10 each

Top Charleston category: Capable, Connected and Logistically Viable Ports (No. 4)

Top Detroit category: NAFTA Access (No. 10)

Top Washington, D.C., category: Education and Colleges (No. 4)

Ranking as the country’s fastest-growing mid-sized metro for aircraft manufacturing, Charleston is flying high in the aerospace sector. Already home to aerospace leaders like Boeing and SKF Aero Bearing, Charleston in June was revealed to be French aerospace supplier AHG Fasteners-USA’s U.S. operations hub. AHG is the sixth company to locate in the historic South Carolina region as part of the Charleston Regional Development Alliance and the South Carolina Department of Commerce’s Landing Pad program, which assists global companies entering the U.S. market.

The hub for America’s automotive industry—thanks to three major automobile businesses with headquarters within principal city Detroit’s metropolitan area—Michigan shipped $57.9 billion worth of goods around the globe in 2018. That made Michigan America’s seventh-biggest exporting state behind Texas, California, New York, Washington, Louisiana and Illinois. Washington, D.C., was the top-ranked city on the 2019 Global Talent Competitiveness Index, followed by Copenhagen, Oslo, Vienna and Zurich.

The GTCI report, which includes a special focus on the encouraging, nurturing and developing of entrepreneurial talent, attributed the strong performance of the nation’s capital to its steady economy, dynamic population, outstanding infrastructure and connectivity, highly-skilled workforce and world-class education.

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Archives, Global Trade Daily, Special Reports

The Importance of Having Local Business Listings

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In this day and age, it is clear that having a strong online presence is very important for any company. Business owners know that having a functional, informative, and visually attractive website will draw in more customers. The same goes for a strong social media presence. We’re sure that you’re marketing your business on Instagram, Facebook, and so on. However, what people sometimes don’t think about are local business listings sites. In this article, we’ll explain the importance of having local listings and why utilizing such listings would be beneficial for your business.

You’re Easier to Find if Your Name is in the Phonebook

Basically, think about local business listings as a sort of a digital-era phonebook. Nowadays, whenever people need information on a certain kind of business, they’ll most likely look for it online. Local business listings can introduce them to a variety of companies offering the kind of service or product they need, based on the potential customers’ area. For example, people looking for moving companies in New York would find the company Dumbo Moving and Storage Brooklyn, as well as important information such as the company’s working hours, address, link to the company’s website, and its phone number. As a lot of queries also specify the location of the kind of business they’re interested in, having your business on these area-based listings can help you a great deal.

Posting important information on local business listings is not hard to do and it doesn’t take much time. It is an easy way to improve your digital marketing. So, why waste the opportunity to efficiently attract new customers? There’s even a good chance that interested parties will give you a call right away. People often use the internet on their smartphones, so it’s very easy and convenient for them to call you as soon as they find your number on local business listings. And if you receive a phone call, then you’re already halfway to securing new customers.

SEO Benefits

Apart from this obvious advantage that local business listings provide, there are more “under the hood” benefits as well. Namely, they can increase your search engine visibility and overall brand visibility. If you’re paying attention to the keywords you use, then you’ll be pleased to learn that local business listings do the same. They’ll most likely use the same or similar keywords you’ve used, thus generally improving your SEO. These sites usually have significant domain authority. Even if your potential customers don’t find your website while using the specific keyword, they’re likely to find your profile on local business listings.

What’s more, the benefits to your search engine visibility don’t stop there. The people working for the major search engine companies like to compare their data with data found on such sites. If your information is there and it is consistent, search engines will deem your business to be more reliable and trustworthy. And if it’s not, they might think that you’re running a shady business, causing your SEO to degrade.

Local Business Listings Can Improve Your Reputation

The importance of local business listings in terms of your reputation isn’t only related to SEO. Potential customers themselves might think that it’s strange that your company isn’t listed there. They might consider it a red flag, warning them to take their business elsewhere. Even if they’ve already heard of your company, finding another one on local business listings might make them call that company and end their search right there and then.

On the other hand, local business listings also offer user reviews. If your company is not only listed there, with all the up-to-date, relevant information, but it also has a lot of good reviews, that’s often all it takes to secure a customer. While we know that many company owners often fear reviews, if you don’t have faith that you’ll receive good user reviews (in other words, if you’re not sure that you’re providing a quality service and/or products), then you have more pressing matters at hands than thinking about the importance of local business listings. However, if you are good at what you do, then you can expect the positive reviews on such sites to help you significantly. You can even post the same reviews on social media or on your website.

When it comes to your reputation, it is also worth noting that some business listings will include your information without your knowledge. This information could be incorrect. What’s more, your competitors can also use these listings to harm your company (this doesn’t happen often, but it is possible). Setting up your profile by yourself on local business listings will prevent that from happening.

Five Most Important Business Listings

So, utilizing local business listings is easy and can generally only help your business. The only thing to consider is which business listings to use. We’ve prepared a list of the five most important ones to help you out:

-Google My Business

-Yelp for Business Owners

-Yahoo Business Listing

-Bing Places for Business

-Facebook Business

There’s not too much difference between these five listings. They are all free and easy to use and setup. However, Yahoo Business Listing will require you to pay 9.95$ every month to allow you to include pictures, which could be important depending on the type of business you run. They also offer the option of paying 29.99$ every month. Choosing this option is recommended because Yahoo’s employees will then include your business in about 40 other local business listings as well, thus saving you some time.

Facebook Business is also highly recommended because many people are using Facebook to find businesses in their area, even if you are mostly doing business with baby boomers. Unlike other business listings, this one not only makes it easy for potential customers to call you, but it also makes it easy for them to message you, if that’s their preferred way of doing business.

Of course, these five sites are just the tip of the iceberg. Don’t stop there and try to include your business in as many local business listings as possible (even if you’ve paid for Yahoo Business’ 29.99$ option). Taking the time to do so means that you’ll have less time to dedicate to running your business, but in the long run – it’s definitely worth it.