Doing Business In Illinois, USA
1. What is the current business climate in your jurisdiction including major political, economic and/or legal activities on the horizon in Illinois that could have a big impact on businesses?
Faegre Drinker has called Illinois home since 1910, and the state maintains an international business-friendly climate.
As the largest market in the Midwestern United States, Illinois is a global business destination that has the attributes for international companies to find success. Illinois has top talent across a multitude of industries and world-class infrastructure that connects companies to their customers and products efficiently. In addition, Illinois is known among USA leading states for education, access to capital, and low cost of living. Illinois is also home to 35 Fortune 500 companies, nearly 2,000 major corporate headquarters, 2,000 global companies, and 1.2 million small businesses.
The largest city in Illinois, Chicago, is the 3rd most populated
in the USA and it continues to attract top companies and talent
(including, in recent years, Google and McDonald's). Despite a
few difficult years during COVID-19, the city has successfully come
back and is now vibrant and safe again. At a high level, the
Chicagoland area is known for its strong pharma and food
industries, traditional manufacturing and industrial footprints,
and strong media and marketing sectors.
2. From what countries do you see the most inbound investment? What about outbound?
Countries leading in foreign investment in Illinois include the UK, Japan, Germany, Canada, and France. In May 2023, Illinois exported mostly to Canada (USD 1.78 billion), Mexico (USD 1.07 billion), Germany (USD 382 million), Australia (USD 358 million), and China (USD 276 million). Illinois imported mostly from Canada (USD 6.06 billion), China (USD 3.43 billion), Mexico (USD 1.59 billion), Germany (USD 1.22 billion), and Japan (USD 760 million).
3. In what industries/sectors are you seeing the most opportunity for foreign investment?
The state leads in industries including advanced manufacturing, agribusiness, energy/electric vehicles, information technology, life sciences, transportation, and logistics. Illinois has a strong history of manufacturing excellence, which has evolved into a progressive technology-driven sector. In addition, Illinois is the #1 state for private food-related research and development in agribusiness.
4. What advantages and pitfalls should others know about doing business in your country?
The United States has the world's largest economy with business laws that promote easy entity formation. The USA is known to be welcoming of non-USA companies entering USA markets. The free enterprise system allows foreign companies to compete on a level playing field. Additionally, the USA is the third largest country and has one of the largest consumer markets in the world.
As one of the most populated states with the 3rd largest city in the country, Illinois is an ideal state in which to set up a subsidiary. In addition, Illinois is centrally located within the USA (especially when compared to New York, Miami, and Los Angeles), which facilitates logistics with easy access to the entire continental country.
The USA is a constitutional federal republic comprised of 50 states and the District of Columbia (Washington, D.C.). Individual states exercise a high degree of autonomy. Businesses must be aware of laws in the individual states, with additional adherence to local jurisdiction laws. While the USA thrives as the largest recipient of foreign direct investment (FDI), there has recently been a plan by the Committee on Foreign Investment to increase scrutiny of foreign-owned companies' investment plans. This will be done as part of an ongoing effort to prioritize national security. Lastly, it can be confusing to do business in the USA because of its common law regime, which is less black and white than most of the world, with laws and rules that are not always clear.
5. What is one cultural fact or custom about your country that others should know when doing business there?
Doing business in the USA can sometimes be like the old "far west"! As noted above, common law makes legal predictability difficult, and most companies in the USA are privately owned and small- to mid-sized, with owners/managers who vary significantly and tend to have their own unique styles that can be awkward to foreigners. This means doing business in the USA requires adaptability and flexibility, and significant vigilance. One must learn when to trust and know if it is better to shake hands versus a strong contract. Having a trusted legal advisor by your side that understands these cultural differences is key from the very start.
Originally published Jan 21, 2024.
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