Numerous considerations come into play when raising capital for international expansion. This includes understanding the different regulatory frameworks of each country or region, especially surrounding securities, tax, and reporting requirements. Failure to comply with local standards can lead to hefty fines or legal ramifications and might ultimately be a barrier to market entry. There are also international tax structures, such as transfer pricing and profit repatriation rules, that can impact investor returns. Therefore, companies should create a clear tax strategy that ensures compliance with international tax laws and helps to minimize the risk of tax inefficiencies or penalties.
There is also the issue of targeting the appropriate mix of venture capital, private equity, or institutional investors for cross-border expansion who are comfortable with the associated risks. When looking to local investors, companies should tailor their pitch so that it best resonates with their needs and preferences. It is important to highlight the market potential in the region and have a solid plan for market entry. International advisors are critical here to help navigate not only the regulatory and legal issues but also to assist with targeting investors and crafting pitches that will best resonate with local investors.