- Home
- Economic Valuation
- FDI Enterprise Valuation
- SPC Valuation + Umbrella
- ASC 805 PPA Business Comb
- Cost Segregation Study
- Business FF&E Assets
- Commercial RE Appraisal
- Electric Generation Value
- Pipeline Entity Valuation
- Oil & Gas Co Valuation
- Renewable Ener. Valuation
- Transfer Pricing Study
- ASC 805 PPA Real Property
- Cost Seg for Renew Energy
- Qualifications
- Contact
Incentives Advisory
within Industrial Economic Feasibilitity
Incentives can support an industrial investment, but they should never drive it. Within U.S.–Korea FDI and strategic-sector projects, incentives function as supplemental economics, not the core rationale for selecting a site or launching an expansion. We integrate incentive analysis only as part of a broader industrial economic feasibility review, ensuring decisions are based on long-run industrial economics, not speculative government support.
A Supportive, Not Determinative, Component of Feasibility
State and local incentives—tax credits, abatements, rebates, grants, and utility-related benefits—are intended to encourage investment and job creation. However, in practice, they involve multiple layers of government, long evaluation cycles, and highly variable program structures. Many companies overestimate the practical certainty of incentives. We help clients understand incentives realistically:
- They are an enhancement, not a foundation.
- Eligibility does not guarantee award or funding.
- Actual payment is often delayed or performance-based.
- Industrial economics must justify the project even without incentives.
Our role is to show how incentives fit within the true cost structure, factor-input economics, and operational feasibility of a project—not as a stand-alone benefit.
The Practical Realities: What Clients Should Know
Based on decades of advisory work in economic development, feasibility, and industrial valuation, companies should be aware of four realities:
1. Incentives rarely accelerate project launch.
Approval cycles can involve state agencies, city councils, utility boards, or workforce authorities. This lengthens the timeline rather than shortening it.
2. Incentives require strict performance compliance.
Companies must file quarterly or annual reports to governors’ offices or economic development agencies.
If job creation, payroll thresholds, or capital investment levels are not met, promised incentives are reduced or canceled entirely.
3. Compliance requires internal staffing and administration.
Companies often need employees dedicated to maintaining documentation, reporting, tracking metrics, and meeting audit requirements. This is a real cost often overlooked during early feasibility stages.
4. Not all incentives are usable.
Many programs issue tax credits that a company cannot fully utilize. Refundability and transferability vary by state. Evaluating “usable value” is more important than the headline amount.
Typical Types of Incentives
While programs vary by state and locality, incentives generally fall into these categories:
- Tax Credits – Often tied to job creation or capital investment; value depends on ability to use, refund, or transfer credits.
- Tax Rebates – Performance-based reimbursements on payroll or sales/property taxes.
- Property Tax Abatements – Savings on real or personal property taxes, often 30–50% depending on jurisdiction.
- Sales Tax Exemptions – Exemptions on qualifying equipment and industrial inputs.
- Training Grants – Reimbursements or in-kind support tied to workforce development.
- Cash Grants or Forgivable Loans – Front-loaded or performance-based assistance for capital investments or job creation.
- Utility Incentives – Rate reductions, infrastructure contributions, or power-related economic-development programs.
- Real Estate and Infrastructure Support – Land, buildings, or infrastructure improvements provided by local government or EDOs.
- Priority Permitting and Fee Waivers – Accelerated approvals or reduced regulatory fees.
- Tax-Free Zones – Specialized geographic zones offering reduced or eliminated taxes.
Incentives Advisory (Integrated Into U.S. Industrial Feasibility)
Incentives can enhance a project’s financial profile, but they should never be the driving force of an industrial location decision—especially for Korea–US strategic investment. Modern incentives programs in the United States operate through multi-layered state and local approval processes, often with long lead times, limited funding, and increasingly strict performance requirements. Because of this, incentives should be viewed as an incremental benefit, not a guaranteed component of project economics.
Our approach integrates incentives review into a larger industrial economic feasibility framework, ensuring that clients evaluate incentives only after core site-selection drivers—factor-input economics, operational feasibility, long-run cost structure, workforce, logistics, and regulatory conditions—are fully understood.
Why Incentives Must Be Treated as Secondary
Traditional incentives programs often take significant time to materialize and require coordination across multiple layers of government. For many projects, the administrative effort, documentation requirements, and compliance burden outweigh the financial benefit. In our experience, the most competitive companies evaluate incentives as a bonus, not a foundation for investment decisions.
Compliance Realities
Companies that accept incentives typically commit to job creation, payroll, investment milestones, and economic-impact targets. These commitments require:
- Quarterly or annual reporting
- Detailed documentation to the Governor’s office or state agency
- Ongoing tracking of headcount, payroll, and investment
- Maintaining an internal compliance team or outside monitoring support
Failure to meet targets frequently results in reduced, delayed, or canceled incentives. Many firms underestimate the staffing and reporting burden until they are fully committed.
Role of Incentives in Industrial Feasibility
Within a U.S. industrial feasibility study, we evaluate incentives as one of many decision factors:
- statutory tax benefits
- potential refundable or transferable credits
- rebate structures tied to payroll or property taxes
- training-related reimbursements
- community-based grants
- utility-company programs
- real estate–linked benefits
- streamlined permitting or fee waivers
This assessment is integrated into the broader economic feasibility analysis, allowing clients to understand whether incentives meaningfully shift the long-term economics—and whether the compliance obligations are worth the administrative burden.
How Incentives Fit Into FDI Industrial Feasibility
For strategic-sector and foreign direct investment (FDI) projects, we integrate incentives into:
- Industrial cost-structure analysis
- Site competitiveness assessment
- Long-term operational economics
- Industrial labor-force evaluation
- Cluster and supply-chain positioning
- Financial modeling and scenario testing
The result is a complete industrial feasibility view, where incentives are properly weighted—not overstated.
Balanced, Independent Advisory
Rather than pursuing incentives as a stand-alone engagement, our approach—based on decades of experience—treats them as one part of the full feasibility process.
This ensures clients:
- avoid overreliance on speculative benefits
- evaluate incentives in the context of real industrial economics
- understand compliance burdens before committing
- make decisions grounded in operational reality
We support clients with clear, independent, economically-driven insight so incentives enhance a project only where truly beneficial.