Cross-border Lending and Investing Toolkit

A collection of resources to assist investors and their counsel in identifying, managing or resolving key legal issues and risks when lending or investing abroad.

Practical Law Finance

Investing abroad, whether as a lender or an equityholder, presents a great opportunity for US investors. Depending on the nature of the investment, they may:

  • Earn a higher return on their investments.

  • Establish a new market for their services and products.

  • Become a leader in a new market.

  • Develop relationships with new counterparties.

These investments are not without risk, however. When investing abroad, US investors must consider several issues, including:

  • Whether the agreements documenting their investments will be given effect in the foreign jurisdiction.

  • How to protect their investments from governmental actions that may undermine their interests, including expropriation ( www.practicallaw.com/1-502-1997) or regulatory takings.

  • Any local law requirements that may impose limits on their investments. For example, regulations regarding:

    • the scope and extent of their ownership interest in the investment;

    • for secured transactions, their ability to obtain a security interest in the borrower's assets in the jurisdiction; and

    • their ability to convert the local currency into US dollars or to remit funds abroad.

  • Social and political issues in the jurisdiction that may adversely affect their investment.

  • US legal requirements that affect or regulate their activities abroad including anti-corruption, bribery and anti-money laundering requirements.

  • Any licensing, filing and registration requirements.

Practical Law has published several resources to assist US investors and their counsel when investing or lending abroad, including resources on:

  • Identifying and managing political and security risks.

  • US anti-corruption, bribery and anti-money laundering regulations.

  • Drafting and negotiating provisions that should be included in cross-border loan agreements.

  • "Know your customer" requirements.

 

Practice Notes

 

Standard Documents and Clauses

 

Checklists

 

Articles and Other Resources

 
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