If a foreign party is involved in an inbound M&A or investment transaction, uncommon issues may arise in several areas of law, which play no role, or a much lesser role, in transactions where all parties are domiciled in the United States. This article describes some (but by no means all) such issues that we have encountered when representing non-U.S. clients. For example, there may be discrepancies in corporate governance regimes that will require at the very least educating the foreign investor and sometimes addressing any arising governance issues through appropriate documentation.

U.S. tax laws can impose withholding requirements related to the purchase price in an acquisition involving U.S. real estate, or if interest is payable by a U.S. party to a foreign party. Dispute resolution mechanisms are of heightened importance, given that either party may be reluctant to subjecting itself to the jurisdiction of another country. Many transactions can be subject to filings with the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA), and a few transactions in sensitive sectors may be subject to Committee on Foreign Investment in the United States (CFIUS) review.

Corporate Governance