The Two-Tier SolutionThe Two-Tier Solution
The U.S. capital market is attractive to nonresident aliens seeking to invest, because rates of return on investments historically have been higher and more reliable than in other countries.1 By the end of 2002, foreign investments in U.S. corporate stocks were valued at $1,170.8 billion, despite substantial declines in the U.S. stock market. Foreign investment in U.S. corporate and agency bonds reached
Carlyn S. McCaffrey, partner, Weil, Gotshal & Manges LLP, New York, N.Y.
The U.S. capital market is attractive to nonresident aliens seeking to invest, because rates of return on investments historically have been higher and more reliable than in other countries.1 By the end of 2002, foreign investments in U.S. corporate stocks were valued at $1,170.8 billion, despite substantial declines in the U.S. stock market. Foreign investment in U.S. corporate and agency bonds reached an all-time high of $1,690.3 billion.2
The U.S. economy benefits from foreign investment, because the availability of foreign capital reduces the cost of capital to U.S. corporations, helps finance new businesses and expansions, helps keep interest rates low, and reduc...
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