A guide to international business investingApril 19, 2016 12:11 pm Leave your thoughts
With the rise of global commerce and growing interconnection of enterprises, the world seems like it is getting smaller every day. Nowhere can this been so acutely felt as in the world of international business investment.
"International business investment is taking on new levels of importance."
An increasingly global economy means that, more than international trade, international business investment is taking on new levels of importance. Already, the U.S. economy is rich with international money flowing in: Forbes tallies roughly $2.7 trillion of foreign direct investment a year, with a full 18 percent of that coming just from the UK, for a total of $487 billion. Elsewhere, even traditionally isolationist countries like China are seeing increased interest in investing in American businesses, with Chinese FDI hitting a record $15 billion in 2015, according to the Miami Herald.
Non-domestic investors are looking to take on roles backing U.S. companies, which in turn can bolster national economies and support local business – particularly small ones. With that in mind, here is a guide to a few things you should know about international investing in local businesses:
International investors look for ways to diversify
The reasoning for domestic investors to seek places to spend their money overseas is nearly the same for foreign investors in U.S. companies: Entrepreneurs are looking for ways to diversify portfolios and insure their capital against fluctuations in their own country's economic outlook, stock market and currency values. With strong, resilient markets and a stable GDP, U.S. businesses often represent a solid investment compared to some domestic prospects.
Foreign investing can take on the form of angel investors
American entrepreneurs seeking investors may want to look beyond U.S. soil, seeking investors from abroad. International investors often make ideal angel investors – individuals looking to invest in businesses or startups at an early stage, in exchange for ownership equity. Communities are cropping up all over the world committed to connecting business-minded individuals on an international scale with companies they can help finance.
Investors may be unfamiliar with American business models and regulations
Even seasoned investors may find themselves in unfamiliar territory when it comes to investing a U.S. business, often because domestic regulations and models may be dramatically different than those in their home country. Understanding the difference between a corporation, partnership, sole proprietorship or LLC can be tricky enough for native English speakers, and keeping track of the various idiosyncrasies of American business law requires having knowledgeable, experienced allies on your side to help sort things out.
The Law Offices of Donald W. Hudspeth, P.C. are expert Arizona international business attorneys, ready to help foreign investors take part in the booming Arizona business economy. Contact us today to get started.
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