ComplianceMarch 02, 2020

CT expert insights: Best practices for attorneys conducting international transactions

Working on clients’ international deals can bring a host of unexpected challenges. Plan for success by anticipating the differences and building them into your deal timeline and workflow. CT Corporation's Global Services Expert discusses the importance of careful planning, respecting cultural differences, and working with an experienced team (on the ground) in multiple countries.

A corporate service provider can serve as your single point of contact to simplify a complex, multi-country deal. A large provider offers the advantages of global-local presence and can make your document requests a priority.

Choosing CT will provide you with a dedicated single point of contact to help project manage the global portion of your transaction or due diligence. To learn more about how CT can help you better manage your global compliance needs, contact a CT representative at (844) 322-6993 (toll-free U.S.).


Greg Corombos: Our guest this week is a Global Service Consultant at CT Global Services. Sealing a business deal in the United States is difficult enough, especially if it involves filings in multiple states. When your business or law firm gets involved in global transactions, it can get even more complicated, and often does. CT's Global Services Expert is here to discuss the common hurdles and how to overcome them. Thanks so much for being with us.

CT Global Services Expert: Thank you. It’s a pleasure to be here.

Greg Corombos: Let’s start with some of the biggest differences between global and domestic transactions. What are the most typical complexities you deal with when involving other countries, and how can they potentially impact the timetable for getting a deal done?

CT Global Services Expert: One of the things I think is super important for our clients and law firms to plan for are the holidays. Many countries have extended holiday periods with major closures or limited staffing in December and into January. Other regions such as Asia celebrate the Lunar New Year, which can close down their offices for about ten days. It’s very important to have a team that you’re working with that is aware of all these different holidays and can help you keep your deal on track as far as timing goes, based around those international holidays.

Greg Corombos: What about in terms of getting all the paperwork where it needs to get to? If you’re working in the United States and often deal with multiple states, you kind of know how the different offices work, how soon they want things and so forth. When you’re dealing with a variety of different countries, how do you manage all of that?

CT Global Services Expert: The best way to manage it is to have a single point of contact here in the U.S. that can help manage all those idiosyncrasies. We have boots on the ground in over 180 countries, so we are able to help alert you to what documents are and are not available. A very common document that we request here in the U.S. is called a good standing. And good standing by nature is language that was kind of created and developed in the U.S. Outside the U.S. different countries might have certificates of existence or certified extracts. We help you go through your list of countries you’re working with and advise you on what documents are available. Because there are certain instances like in Japan, certified copies are not available to third parties, whereas in the U.S., any third party can order a certified copy from a Secretary of State. We really take that as our responsibility to help you determine which documents are available and what is the closest equivalent we can get you from those other countries.

Greg Corombos: Having people familiar with all those different countries, 180, that’s very very impressive...can often sort out the complexities pretty quickly here. But a lot of folks here in the United States have a hard enough time keeping up with regulation changes or major changes in the law—tax law, for example, is a major change here in the last few months. What about trying to figure it out for all these different countries you’d like to do business with?

CT Global Services Expert: Absolutely. That can be a big challenge. It’s something that we’re constantly doing research [on]. We’re updating our databases and our internal matrixes so that we can provide the most up-to-date information to our clients as their requests come in. It’s something that’s not an easy task by any means, but we really take pride in trying to provide our clients with the most up-to-date information available in all those countries they might be working with.

Greg Corombos: You mentioned the holidays a moment ago, about how it’s challenging when working on transactions in different countries. What about other things? Just different mindsets or different styles of doing business that’s very different than what we might be used to here.

CT Global Services Expert: One interesting thing is that it’s very common practice now in Mexico to provide illegal cash bribes in order to have any request processed quicker in Mexico. Obviously, we and most international firms believe this is unethical as it’s illegal, so we will not commit such activities. But it increases that turnaround time exponentially, that it might take four to six to eight weeks to get documents back from Mexico.

One other thing that we’re used to being able to do in the U.S. is to expedite documents. In Delaware, if you want to pay more money, you can get items back more quickly. So that value can be important to law firms when closing transactions or deals.

Expediting is just not available outside the U.S. In India if you’re looking to get the equivalent of a good standing, it’s going to take 10 to 20 business days.

Now we’ve also found other ways around this to help meet our law firms’ time-sensitive needs...Certain countries like Germany or Switzerland offer a plain extract, like a good standing, that we can get you within 24 to 48 hours while you wait the 10 business days to get that certified extract. So that really helps our law firms be able to say, okay, we have the preliminary information here, and we have some post-closing checklist items that are going to keep funneling in as they take a little bit longer from some of these countries.

Greg Corombos: Talk about the steps that need to be followed, and I guess it varies from country to country, to get these things done right and also get them done in a timely manner. Does it make sense to build a lot of extra time, for example, into the schedule for anticipating when all this gets done?

CT Global Services Expert: Absolutely. Things outside the U.S. inevitably take longer. It’s just something we run into on a regular basis. We try to make sure that we’re providing exact timelines. We’re updating you on the holidays. We’re giving you a project management chart that helps you really see the big picture. As far as filings go, some companies are interested in doing due diligence searches or filings and that’s just not available in every country like we’re used to here in the U.S.—the Article 9 and UCC laws that are available. But there are other countries that have similar public registries where you can file liens, like Canada, Australia, the U.K.

And it’s a very different process. In Canada, if you want to file a PPSA filing, which is most similar to a UCC filing here in the U.S., it’s all done electronically. So we would send you a questionnaire to complete. And then we would prepare the draft of the filing for your review and submit that filing directly into their electronic system. So that’s something that often outside the comfort zone of law firms that we’ve worked with because they’re used to drafting their own filings that are being submitted to the different Secretaries of State.

Greg Corombos: We’re talking with CT's Global Services Expert. She is a Global Service Consultant at CT [Global] Services. We’ve talked about navigating the system, and how firms like yours at CT are able to help a great deal in that sense because they’re familiar with the customs and the laws and the calendar and all that sort of thing. Generally speaking, when it comes to global transactions, what are some of the most common ways deals can get hung up.

CT Global Services Expert: So some of the ways deals can get hung up is, first and foremost, on timing. Secondly, sometimes we need more information in order to obtain documents. In the U.S., as long as you have the company name, you can go to the Secretary of State, you can get on online databases and pull good standing certified copies, run UCC searches. Not all of these countries outside the U.S. have online databases. For instance, if we’re working in China, we need to not only know the name in English characters, but we also need to know the name in Chinese characters, so that we can ensure that we are pulling the correct document because names can be translated differently. And we want to make sure we’re getting you information on the entity or debtor that you’re looking for. So that’s something that’s really important.

Also important to take into consideration as far as timelines go—translation services. Because when we order documents for many countries outside the U.S., those documents come back in their native language, not in English. So we can provide notarized translations for you, but that tags on a couple extra days to the entire turnaround time, which is important to anticipate for your transaction.

Greg Corombos: Having that help is very very good. Knowing exactly what documents you need in that other language or that other culture is critical because they’ll have other names a lot of the times. Let’s get a little bit blunt here. What are some countries you have found to be particularly difficult to work in?

CT Global Services Expert: As previously mentioned, Mexico, as we’re not in the business of providing cash bribes. We’ve had quite a bit of challenge there, and there is nothing online there. It’s literally callings or correspondence, driving around all across the country to different registries because nothing is connected. So that’s a country we definitely find struggles with.

When working on legalizations in other countries, the Chinese consulate can be one that can be quite challenging to work with, just because they have a lot of extra requirements when you’re legalizing a document—maybe needing a copy of the passport of the person requesting the legalization or an application. Different things like that can take longer.

Some of the islands. We joke sometimes that it’s island time. It’s wonderful when you’re on vacation, and you’re waiting for a cocktail. But when you’re trying to close a deal or do a transaction, you don’t want to be working on island time. So that’s something we also have to anticipate and proactively advise our clients, that getting things turned around in Jamaica is going to take a little bit longer. It might take three days for them to respond.

And lastly, one other item to keep in mind is weather conditions. Puerto Rico and the U.S. Virgin Islands were wrecked during the hurricane last summer. We’re still seeing regular power outages and blackouts all across Puerto Rico. That dramatically affects the turnaround time of getting filing submitted, getting documents back, getting searches back. So being aware of even just natural issues that might come into play and wreak havoc on your transaction timeline.

Greg Corombos: Natural disasters can play a major role in some parts of the world, and until you mentioned that, I was thinking that with the island time and the extended holidays, maybe getting a transfer to some of those offices would be kind of nice. That schedule sounds pretty appealing at some point.

CT Global Services Expert: I know right?

Greg Corombos: Exactly

CT Global Services Expert: Delightful.

Greg Corombos: So you’ve got these hurdles. Obviously, you’re dealing with some ethical challenges in Mexico. You mentioned the Chinese consulate and some other places that present some challenges. When these things pop up—and these are some major countries we’re talking about and you still want to do business there—how do you get around the obstacles.

CT Global Services Expert: One thing we’ve been really fortunate to have are boots on the ground, people that are local that are building relationships in those government agencies that are help us keep up to date so that your central point of contact here in the U.S. is aware of all these different things going on outside the U.S. We manage all the time-zone issues behind the scenes and can communicate with our clients, our law firms here in the U.S. in their time zone. Which is something that’s very helpful, especially when managing a project across multiple countries. If you were going to work with different registries, different providers in each country, that becomes a challenge in not only time zones, languages, it also becomes a challenge as far as currencies go in invoices. So we really try to pull that all together, wrap it all up, and give you the information you need and are proactive about the timelines on when you will get it, along with your documents or searches back.

Greg Corombos: As we close here, there might be some folks thinking, I feel a little better about the prospect of doing global transactions, but I feel like I still might need a little bit of help here. How can folks get in touch with CT Global Services?

CT Global Services Expert: They can email us at [email protected]. Or they can give us a call at 212-590-9009.

The CT Corporation staff is comprised of experts, offering global, regional, and local expertise on registered agent, incorporation, and legal entity compliance.

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