Structuring the investment
Investors often hold a cross border investment through an intermediate company rather than directly, for reasons that include liability protection, tax treaty access, and flexibility on exit. Tax treaties can reduce withholding on dividends, interest, and royalties, but many include anti-abuse rules that look past a holding company with no real substance. The choice between equity, a loan, or a convertible instrument affects both control and how returns can be paid out. Some countries limit how money can leave or require registration of foreign capital before profits can be sent home. These questions are easier to answer with tax advisers in both countries before any money moves.
Reviews at both ends
Inbound investment into the United States can fall under CFIUS review, particularly where sensitive technology, infrastructure, or personal data is involved. The United States also regulates some outbound investments by U.S. persons in sensitive technologies connected to countries of concern, and those rules continue to develop. The country on the other side of the deal may run its own screening regime. Industry rules, such as foreign ownership limits in broadcasting and aviation or approval requirements for acquiring a bank, apply separately. Mapping all of these early keeps a signed deal from stalling on a filing nobody planned for.
Opening questions for the deal
We begin with what you are investing in, how much control you expect, and how you plan to exit. From there we identify the filings and approvals the investment may need and coordinate with counsel in the other country. We review the investment documents for rights that may trigger regulatory review, such as board seats or access to technical information. Bring the term sheet, an ownership chart for both sides, and any correspondence with the other party about timing. We will tell you which open questions need answers before signing and which can wait. If the other side has already proposed a structure, we review whether it serves your goals as well as theirs.
