Navigating site selection & economic development incentives in the US Market.

At Amesto Global, our goal is to help reduce the headaches that come with scaling operations across borders. One of the major challenges our clients face when setting up in the US is selecting the right location. From choosing the right state for these operations, to leveraging available economic development incentives, the process can be equally challenging. To offer strategic insight and advice into this process, our Director of Growth, Sims Tullos, sat down with the site selection experts at KSM Location Advisors (KSMLA) to learn more about how KSMLA is providing companies with the guidance they need to make informed location decisions. 

Join us as we explore the key considerations and strategies for selecting the ideal site and securing incentives in the United States. 

Answered by Katie Culp, CEO and Partner at KSMLA 

Each site selection assignment has its own unique elements, but one thing common to all projects is that companies are trying to minimize risk and avoid the unexpected. According to KSMLA, the top factors influencing a client’s location decision include: 

• Labor market characteristics: What is the availability and skill level of the workforce? 

• Capital and operational costs: How much will it cost to operate in the chosen location? 

• Local business climate: Is it easy to do business there? Can projects be completed on time? 

• Site and building availability: Is there space available that meets the company’s needs? 

• Fit with company-specific requirements: Considerations like supply chain, public transportation and time zones. 

• Quality of life: Important for attracting and retaining talent. 

• Infrastructure: Are there adequate utilities, transportation and technology networks? 

Different factors are important to different companies. For instance, a company’s supply chain demands might immediately rule out certain geographies. Ultimately, each factor in a site selection project should be weighted based on that specific company’s needs and goals.

Evaluating multiple locations during a site selection project is essential for several reasons. Practically, exploring various sites creates a competitive environment, benefiting both your company and the communities involved through better costs, timing and economic incentives.  

In incentives applications, there's often a “but/for” qualifier. This means that your company agrees that “but for these economic incentives, the project would not take place here.” Therefore, showing that incentives are a key factor in your decision requires having a compelling alternative market under consideration.  

Katie Culp, emphasizes, “When locating in the U.S., it’s important to remember that each state operates independently and varies in how they treat foreign investment. Furthermore, within a single state, cities and towns can function very differently from one another. When narrowing down your search within the U.S., it’s imperative to visit each location under serious consideration to ensure it will be a good match for a long-term investment and relationship with state and local stakeholders.”  

From a financial and operational perspective, companies expanding into the US should assess how potential locations align with both their short-term and long-term growth strategies. Factors such as tax structures, labor costs and access to local talent can significantly impact operational efficiency. Additionally, state-specific requirements—such as financial compliance, employment laws and payroll structures—play a critical role in business operations. Understanding these nuances before finalizing a location is essential for mitigating risks and avoiding costly challenges.  

Answered by Alexis Sowder, Director – Client Services at KSMLA

Could You? Yes. Should You? It Depends. 

While companies can reach out to government agencies directly, KSMLA advises consulting with an experienced site selection consultant first. Engaging a consultant helps navigate the complexities of incentives and ensures that the potential benefits align with your company’s structure and goals. 

“Often, when a company approaches state and local governments on their own, economic development agencies will present a very attractive incentives package. Unbeknownst to them, without proper due diligence on factors like company structure, incremental assessed value, and others, these incentives may not deliver the promised benefits – what initially appears to be a great deal could end up being less valuable than anticipated,” says Alexis Sowder. 

If a company chooses to reach out directly to state and local governments, here are some key considerations: 

1. Confidentiality of the Project: Ask early how confidentiality is managed with state and local governments. Often times, state and local governments have different rules and expectations about what should be kept confidential and for how long.
   

2. Compliance: Compliance is the ongoing, typically annual reporting that is required to receive the benefits of the incentives for the length of the term. Terms vary, but some are 10 years or longer and have rigid deadlines.

3. Noncompliance: What happens if the company is noncompliant on the annual reporting? Understand how noncompliance is defined, these definitions will vary based on which entity is issuing the incentives benefit, as well as which program applies. Be especially attentive to the conditions triggering clawbacks. 

Answered by Alex Miller, Manager – Client Services at KSMLA

One of the benefits of using a site selection consultant is timing management. KSMLA recommends identifying when a company wants to begin operations at the new location and setting the timeline by working backwards. 

“Generally speaking, it is best to allocate 6 to 12 months for the site selection and economic incentives negotiation process. Roughly 3 to 6 of these months represent the incentives negotiation and approval process. There are many factors that can impact a project timeline, including project complexity, state and local government processes, and flexibility of the project itself,” says Alex Miller, Manager – Client Services at KSMLA. 

In parallel, it's essential to have an international expansion partner who can align operational timelines with financial systems. Amesto Global ensures that, once a location is selected, your company is ready to hit the ground running. We help integrate payroll, compliance and financial reporting frameworks, allowing for a seamless transition into the US market and minimizing downtime as you begin operations. 

Answered by Katie Culp, CEO and Partner at KSMLA

Site selection requires careful consideration with each step of the process. Establishing and communicating the project scope is key so as to not run into compliance issues once the project commences.  

Thoroughly evaluating qualitative and quantitative data to make a well-informed location decision that will support long-term success and growth is key. At the end of the day, a company is determining where they will be a long-time corporate citizen.

Sims: What parts of the site selection process pose the greatest risks?

There are many risks involved with site selection, some of which can have long-term implications on a company’s success. Some of these risks include: 

• Underestimating timing and/or cost: Misjudging the true costs of doing business, including taxes, utilities and labor, can erode profitability. 

• Usability of incentives: Fully understanding how incentives programs are applied and whether they are applicable to your company is crucial. 

• Definition of compliance/noncompliance: Accurately understanding what performance constitutes compliance is essential to avoid surprises like clawbacks, which may require payback of incentives benefits received to date. 
• Confidentiality and PR: Perhaps the most common risk factor – it is imperative that all parties are clear about what information is confidential and for how long, and that all parties agree on timing and content for public relations/media releases. 

Answered by Alexis Sowder, Director – Client Services at KSMLA

The majority of state and local economic development agencies have an incentive “landing page” on their website that outlines any thresholds or requirements needed to qualify for their incentives programs. Due to legislative updates, incentives programs change regularly, so it is important to confirm the information on these pages is up to date. 

Sims: What are common triggers for these incentives? 

Typically, incentives programs will have thresholds related to job creation and/or capital investment. KSMLA advises clients and referral sources that if your company is planning to do any one of the following, contact a site selection consultant, as there may be an opportunity for incentives. 

• Creating 50+ jobs 

• Investing $20 million or more in any combination of: 

• Expanding operations 

• Purchasing new equipment 

• Renovating an existing facility 

• Consolidating operations 

• Relocating to a new market 

• Renewing a lease 

• Planning a merger or acquisition 

Sims: Once a company has selected a location and incentives are approved, what additional steps should be taken? 

While securing incentives is a crucial step in the site selection process, ensuring your company remains compliant with the requirements of their enrolled incentives programs is even more crucial. It is estimated that up to 75% of negotiated state and local incentives go unclaimed, often due to missed compliance deadlines, staff turnover or a shift in company goals. To prevent this, it’s essential to have a robust compliance plan in place.  

Partnering with US compliance experts can alleviate potential pain points and ensure your operations run smoothly. Whether you choose to work with a partner or manage compliance internally, establishing clear processes and designating dedicated personnel to oversee annual compliance is crucial. This includes tracking deadlines, maintaining accurate records and regularly reviewing your progress against program requirements. By staying vigilant and proactive, you can maximize your financial benefits and ensure your company receives every incentive dollar awarded. 

Answered by Amy McDonald, Vice President at KSMLA 

Engaging a site selection consultant can be highly beneficial, especially when dealing with complex decisions, large-scale operations or unfamiliar markets. “A consultant brings valuable expertise, efficiency and negotiation power, which often leads to better outcomes. However, if your company has the necessary internal resources, strong local knowledge and existing relationships, managing the process in-house might be more cost-effective. Ultimately, the decision to hire a consultant depends on the complexity of the project, the availability of internal resources and the long-term strategic importance of the site to your company’s growth,” says Amy McDonald. 

If you decide to hire a consultant, the ideal time to engage one is as early as possible in the decision-making process, ideally before any potential sites have been shortlisted. This will afford the company the most guidance on critical decision making factors. 

When selecting a consultant, it’s important to evaluate several key factors: 

• Industry and geography experience: Does the consultant understand the unique challenges of your industry and the regions you’re considering? 

• Data sourcing: How do they gather and analyze the data needed for an informed decision? 

• Experience and capacity: How long has their team been working in site selection, and do they have the bandwidth to handle your project? 

• Compliance services: Can they assist with ongoing compliance, ensuring your business remains eligible for any incentives? 

• Tailored solutions: Do they offer custom services that meet your specific needs? 

• Engagement of senior leadership: Will senior team members remain involved throughout the project? 

• Project Knowledge: Does the consulting team have a keen understanding of the goals of the project? 

Site selectors typically offer different fee structures, so understanding these options is crucial. Common models include: 

• Performance-based fees, where the consultant’s compensation is tied to the overall size of negotiated incentives. 

• Hourly rates, which may include additional out-of-pocket expenses. 

• Flat fees, where services are provided at a fixed cost based on the project’s scope. 

By carefully considering these factors, businesses can make informed decisions about whether to hire a consultant and how best to engage their services for successful site selection.