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Cross-Border Lending and Investing Toolkit
Practical Law Toolkit 3-607-0410 (Approx. 6 pages)
Cross-Border Lending and Investing Toolkit
by Practical Law Finance
| Maintained • USA (National/Federal) |
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.
Investing abroad, whether as a lender or an equity holder, 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 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 loan transactions, their ability to obtain and enforce 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.