Expanding into the United States is a significant milestone for any business. Whether you’re building a manufacturing facility, opening a distribution centre, or investing in a semiconductor plant, every decision made during the planning process can affect the long-term success of the project.
One area that is often overlooked until it’s too late is state and local tax incentives.
At the SelectUSA Investment Summit, ITC Tax Founder & CEO Mark Dzeda joined a discussion about the opportunities available to companies from South Korea, Japan, Taiwan, and other Asian countries considering investment in the United States. His message was simple: the best time to negotiate tax incentives is before you announce where you’re going.
The U.S. Is Competing for International Investment
States across the country are actively competing to attract new businesses. Large investment projects create jobs, strengthen local economies, and encourage long-term economic growth, making them highly valuable to state and local governments.
This is especially relevant as companies from South Korea, Japan, and Taiwan continue to expand their presence in the United States. South Korea alone has announced plans for substantial investment across industries including semiconductors, energy, defence, and shipbuilding.
For businesses entering the U.S. market, this creates an opportunity to secure meaningful tax incentives that can significantly reduce the overall cost of a project.
Companies that include site selection and incentives as part of their expansion strategy are often in a much stronger position to maximise available savings before a location is selected.
Timing Makes a Difference
Many companies begin discussing incentives after they’ve already chosen a location.
Unfortunately, that’s often when much of their negotiating power has already disappeared.
Before a company commits to a particular state, multiple jurisdictions may be competing for the project. That competition encourages states and local communities to offer stronger incentive packages.
Once a location has been announced, there is far less incentive for governments to improve their offers because the decision has already been made.
As Mark explained during the discussion, companies have their greatest leverage before making a public commitment.
Compare States, Not Just Sites
Finding the right property is only one part of the site selection process.
Different states offer very different incentive programmes, and those differences can have a significant impact on the total cost of an investment.
Depending on the location, businesses may qualify for:
- Property tax abatements
- Sales and use tax exemptions
- Job creation incentives
- Workforce training grants
- Infrastructure assistance
- Local economic development programmes
Comparing these opportunities alongside labour, logistics, and infrastructure provides a much clearer picture of the true cost of operating in each location.
This approach is especially valuable for companies investing in data centres, semiconductor manufacturing, advanced manufacturing, and other capital-intensive industries where incentives can represent millions of pounds in long-term savings.
Incentives Come With Responsibilities
Receiving an incentive package is only the first step.
Most programmes require businesses to meet specific commitments over several years. These may include creating a certain number of jobs, making agreed capital investments, or meeting construction and operational deadlines.
These agreements are contractual obligations, not informal promises.
If the requirements are not met, companies may face clawback provisions that require some or all of the incentives to be repaid.
Understanding those obligations before signing an agreement helps businesses avoid unexpected costs later.
Tax Strategy Should Be Part of Site Selection
Companies spend considerable time evaluating workforce availability, transportation networks, utility capacity, and supply chains before selecting a location.
Tax incentives deserve the same level of attention.
As we discussed in Building Data Centers the Smart Way: How Early Strategy Protects Value, Incentives, and Long-Term Success, involving tax professionals early allows businesses to evaluate locations more effectively, negotiate stronger incentive packages, and protect long-term value.
The same principle applies to any major investment project. Tax planning should be part of the conversation from the beginning, not something considered after a site has already been chosen.
How ITC Tax Helps
Every investment project is different, and incentive programmes vary from state to state. Knowing where opportunities exist and when to begin negotiations can make a significant difference in the value of the incentives available.
At ITC Tax, we work with domestic and international companies to evaluate locations, identify available tax incentives, negotiate with state and local governments, and remain compliant with incentive agreements long after a project begins.
Whether you’re developing a manufacturing facility, distribution centre, semiconductor plant, or data centre, our team helps ensure tax incentives are part of your site selection strategy from day one.
If your company is planning to expand into the United States, contact ITC Tax before selecting a location. Early planning can help maximise available incentives, reduce long-term tax liability, and position your investment for long-term success.