Executive Guide to Doing Business in the US

OVERVIEW OF THE US HEALTHCARE IN THE US DOING BUSINESS IN THE US

Overview of the United States
Major cities
Population growth
Age structure
Life expectancy
Gross Domestic Product
Income per capita
Biggest imports/exports
Major trading partners

Health expenditures per capita
Government expenditure on healthcare
Private expenditure on healthcare
Out-of-pocket expenditures
Medical device market size
Physicians & hospital beds per 1,000 people

Doing business with the US
Documents needed to import
Time to import into the US
Burden of customs procedure
Logistics performance index
Enforcement of contracts
Exchange rate history
Total tax rate

Overview of the United States of America

GENERAL STATISTICS
Capital: Washington D.C.
Language: English
Currency: United States dollar
Population: 316 million (2013 est.)

The United States of America is a federal republic that consists of 50 states, 16 territories and the Washington, D.C. federal district. It is the fourth-largest country by area and third largest by population. After the collapse of the Soviet Union, the USA became one of the world’s most powerful countries, playing an important role in several conflicts and wars. With a highly developed infrastructure, a large amount of natural resources and high productivity, the USA has the 14th largest nominal GDP per capita in the world. This has been achieved through continuous economic growth since the end of World War II, as well as low unemployment and important technological advances.

Major cities in The United States

LARGEST CITIES (millions)
New York City - 19
Los Angeles - 12
Chicago – 9.5
Dallas-Fort Worth – 6.5
Houston - 6

With 82% of Americans living in urban areas, the USA has 52 metropolitan areas with over one million in population. There are also 289 municipalities with a population of at least 100,000. The fastest growing metro areas in recent years are located mostly in the West and South, with the most important growths being noticed in Dallas, Houston, Atlanta and Phoenix. [1]

Population growth in the US

The USA is the third most populous state after Brazil and China and the only out of the industrialized countries where a large population growth is expected. In 2012, the US population grew by 0.7%, a higher number compared to China (0.5%), Japan (-0.2%) and lower compared to Brazil (0.9%) or India (1.3%). Despite this growth, the United States’ share of the world’s population is in decline, as countries such as Pakistan, Bangladesh or Nigeria are rapidly growing. According to the US Census Bureau’s estimations, if immigration will continue its trend, the US population is expected to increase by 41% (to 436 million) in 2050. [2]

US population growth

AGE STRUCTURE
Age 0-14 - 20%
Age 15-64 - 67.9%
Age 65+ - 14%
Median age - 37.2

Age structure in the US

Since the 1950s, the US has been experiencing a major change in population structure. The percentage of of seniors (65+ years) has drastically increased from 8.1% in 1960 to 14% in 2012, being expected to reach 20.2% in 2050. Compared to the world average, the United States have a higher percentage of people aged 15-64 (64% compared to 67%) and 65+ (9% vs. 14%). [3] The median age of 37 is also 7 years higher than the world average. There USA has a younger population than Japan, Germany or France but older than Brazil or Mexico.

US age structure

LIFE EXPECTANCY
Male/female: 76/81
Globally: 68/71

Life expectancy in the US

According to 2011 data from the World Health Organization, the United States ranks 33rd worldwide in terms of life expectancy with 79 years, being surpassed by countries such as Japan (83 years life expectancy, France (82 years) or Germany (81 years). Life expectancy has increased in the USA from 74 for men and 79 for women in 2001 to 76, respectively 81 in 2011, but remains low considering the high expenditure on health each citizen has to pay.

US life expectancy

INCOME
GDP: US$ 15.68 trillion (ranked 2nd)

US Gross Domestic Product

The US economy is one of the largest and most powerful in the world, driven by abundant natural resources, a high productivity and an optimal infrastructure. The US GDP makes up 22% of the gross world product or 19%, at purchasing power parity (PPP). The US GDP contracted in 2009, following the 2008 recession, making this the longest contraction since the Great Depression. The budget deficit in 2010 and 2011 reached 9% of GDP after a plan signed by President Barack Obama to offer US$ 787 billion in fiscal stimulus. The deficit reached 7.6% after a reduction in spending implemented by the federal government. The GDP growth rate in 2012 was 2.8% and is expected to each 2.0%-2.3% in 2013 and 2.9%-3.1% in 2014. [4]

US GDP

Income per capita in the US

GDP PER CAPITA
US$ 49,965 (ranked 7th)

The GDP of the United States, US$ 49,965 nominal and purchasing power parity (PPP), is ranked the 7th largest in the world at PPP or 14th largest nominal GDP, as ranked by the World Bank. This outranks countries such as Japan, Germany or France but falls behind some European countries such as Luxembourg, Norway or Switzerland.The GDP of the United States, US$ 49,965 nominal and purchasing power parity (PPP), is ranked the 7th largest in the world at PPP or 14th largest nominal GDP, as ranked by the World Bank. This outranks countries such as Japan, Germany or France but falls behind some European countries such as Luxembourg, Norway or Switzerland.The GDP of the United States, US$ 49,965 nominal and purchasing power parity (PPP), is ranked the 7th largest in the world at PPP or 14th largest nominal GDP, as ranked by the World Bank. This outranks countries such as Japan, Germany or France but falls behind some European countries such as Luxembourg, Norway or Switzerland.

US GDP per capita

Biggest imports/exports in the US

The US is the largest importer of goods and the second largest exporter, after China. US exports in 2012 were valued at $1.564 trillion, the most exported goods being capital goods (27.9%) industrial supplies (24.8%), consumer goods (11.8%) and automotive vehicles (9.4%). Imports amounted to $2.299 trillion, with consumer goods making up 22.7% of this amount, followed by capital goods (18.7%), industrial supplies (18.4%), crude oil (13.7%) and automotive vehicles (13.1%).

MAJOR TRADING PARTNERS
Imports come from:
China - 19%
Canada – 14.1%
Mexico – 12%
Exports go to:
Canada – 18.9%
Mexico - 14%
China- 7.2%

Major trading partners for the US

Currently, The United States has signed free trade agreements (FTAs) with the following countries countries: Israel, Canada, Mexico, Jordan, Australia, Chile, Singapore, Bahrain, Morocco, Oman, Peru, the Central America Free Trade Agreement (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic), Panama, Colombia and South Korea.

The intention of a free trade agreement with the European Union has been announced and may be finalized by the end of 2014. There are also proposed FTAs with the Free Trade Area of the Americas (all countries on the Western Hemisphere), Thailand, New Zealand, Indonesia, Malaysia, the UAE, Qatar and several African countries. [5]

US trading partners

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Healthcare in the US

Healthcare in the US is largely provided by private businesses. While health insurance for public sector employees is provided by the government, most of the population is insured through their employer or that of a family member, while the rest either buys insurance on their own or remains uninsured. The Patient Protection and Affordable Care Act (PPACA) or “Obamacare” signed into law by President Obama in March 2010 is one of the most significant changes to the American healthcare system in recent years. The act stipulates that insurance companies are required to cover all applicants with a minimum set of standards and charge them equally, without taking into account pre-existing illnesses. With these mandates and subsidies, the law aims at lowering the rate of the uninsured and cut down healthcare costs.

TOTAL HEALTH SPENDING:
US$ 2.7 trillion (2011)
Health spending per person:
$8,607
Growth from 2006 to 2011: +21%
Total health expenditure on health as % of GDP: 17.9%

Health expenditure per capita

It is estimated by the US Census Bureau that 16.3% of the population or 49.9 million Americans were uninsured in 2010. Thus, around 60% of health costs come from programs such as Medicare, Medicaid, TRICARE, the Veterans Health Administration and the Children's Health Insurance Program. The United States is responsible for the biggest health expenditures worldwide, in terms of both percentage of GDP (17.9%) and expenditure per capita ($8607). Despite having one of the highest healthcare costs per capita in the world, US citizens have a relatively low life expectancy compared to other developed countries. Thus these costs far exceed the ones in countries such as Japan, France or Germany. Out of all OECD countries, the US, Turkey and Mexico are the only ones that do not have universal health coverage for their population.

health expenditure capita USA

Government expenditure on healthcare

Healthcare programs paid for by the government have limited edibility and covers only 27.7% of the population (around 83 million). Elderly and disabled citizens, children, veteran and some of the poor benefit from government-funded healthcare. Out of total healthcare expenditure, this accounts for 46% in the US, close to Brazil’s percentage of 46% but significantly lower than France with 77% or Japan with 80%. [7]

general expenditure health USA

Private expenditure on healthcare

Private expenditure in the US is comparable in size to that in countries such as Brazil (54%), Chile (53%) or Mexico (50%). These are the only OECD countries where private expenditure on health is higher than 50%. However, public spending on health has been increasing faster than private due to increase in coverage since the 1990s. [8]

private expenditure health USA

Out-of-pocket expenditures

Out-of-pocket expenses remain relatively low in the US (21%) compared to other countries such as Brazil (58%), France (32%) or Japan (82%). This percentage is expected to soon be even lower with the introduction of the Patient Protection and Affordable Care Act (Affordable Care Act). As of 2014, this will limit the annual amount people will have to pay out of their own pockets for health services.

out of pocket expenditure health USA

MARKET SIZE
US$ 127 billion (2011, revenue)
Number of hospitals: 5724
Growth Potential: 3 (1 - low; 5 - high)

The size of the US medical device market

Valued at an estimated US$127.1 billion in 2013, the US medical device market is the largest and the most innovative in the world, home to half of the leading medical device companies. The hotspot for the industry is the Western part of the country, predominantly in states known for high-technology industries. A large part of medical device companies, roughly 20% are located in the state of California.

The medical device industry is a driver for US economic growth, consistently devoting its revenue to innovation and exporting more than it imports. The US lead is being challenged due reducing profit caused by the excise tax imposed on medical devices through the Patient Protection and Affordable Care Act of 2010, as well as the weak GDP growths the government is facing as it is tried to deal with unprecedented levels of debt. [9]Physicians & hospital beds per 1,000 people

With 2.4 physicians and 8.2 nurses per 1,000 people, the US numbers are close to the EU average (3.3 physicians and 8 nurses), Japan (2.1 physicians and 4.1 nurses) or the world average (1.3 physicians and 3 nurses). 3 hospital beds are available for every 1,000 people in the US, a number in line with the world average (3 per 1,000 people) but below the EU average (5.4) or Japan (13).

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Doing business in the US

Doing business in the US

According to The Global Competitiveness Report, the United States is ranked 5th in the Global Competitiveness Index, behind countries such as Switzerland, Singapore, Finland and Germany. Up 2 positions from the previous years, the US economy is slowly getting back on track after the 2008-2012 recession. This growth is due to the high number of innovative and sophisticated US companies supported by a flexible labor market and advanced university system. Weaknesses noted by the report consist of the business community’s weak trust in politicians and, among others, a perception that the government is wasteful with its resource spending. [9] In terms of the ease of doing business, Doing Business ranks the US 4th among 185 world economies, being outranked by Singapore, Hong Kong and New Zealand.

ease of doing business USA

Documents Needed to Import

There are 5 documents required to import into the US, a number similar to the average for 31 OECD high income countries but lower than the regional and global best performance, as measured by Doing Business: [10]

  • Bill of Lading
  • Cargo release order
  • Commercial invoice
  • Customs import declaration
  • Packing list

documents to import USA

Time to import into the US

It takes an average of 5 days to import into the US, 1 day more than the global best performance and less than the regional average for OECD high income countries. The average import time in the US is also lower than countries such as China (24 days), France (11) or Germany (7) [11]

time to import USA

Burden of customs procedure

Manufacturers of medical devices and/or products that emit radiation must meet regulatory requirements set forth by the FDA before, during, and after importing into the U.S. or its territories since the entity does not recognize regulatory approvals from other countries. In addition, devices must also meet requirements of the Bureau of Customs and Border Protection (CBP). The CBP collects duties, taxes and fees on imports and reviews import entry forms. To determine the duty and tax information for a product, please consult the Export.gov website..

Logistics Performance Index – 3.93

The Logistics Performance Index (LPI) is the average score for a country reflected by the efficiency of custom procedures, trade and transport related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments and timeliness of shipments in reaching their destination. In this ranking, the US outperforms countries such as France, Switzerland or Canada but ranks lower than Singapore, Germany or Japan. [13]
1 = Low; 5 = High

Enforcement of Contracts

Enforcing a contract in the US, according to data from Doing Business, takes 370 days, requires 32 procedures and costs 14.4% of the value of that contract. This puts the US on the 6th position (a decrease from 4th position in 2012) out of 185 countries studied, before France, Japan or Canada but after Germany. [14]

usa enforcement contracts

Exchange rate history

For a detailed overview on how the the US currency (US$) moved in recent years, please see the graphic below.[15]

Total tax rate (% of commercial profits)

Businesses that settle in the US will have to pay total taxes of 46.7% of profits. This tax rate involves 11 payments per year and 175 hours of work, placing the US on the 69th position out of 185 economies when it comes to paying taxes.

US tax rate

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Data compiled October 2013. Updated yearly

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