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U.S. Inbound Investments

Sullivan & Worcester’s U.S. Inbound Investments Group provides legal advice on compliance with FINSA and its regulations, as well as all other aspects of legal issues that arise in connection with acquisitions and investments in U.S. businesses and assets.

The U.S. Inbound Investment Group provides advice with respect to: 

  • Those structures that comply with U.S. laws and practices for mergers, acquisitions, takeovers, joint ventures and similar transactions, as well as the execution of those transactions
  • Any requirements to obtain consents for the acquisition or investment from governmental agencies and other regulators
  • Differences between the U.S. tax system and the tax systems of other jurisdictions, including the effect of tax treaties
  • The structuring of investments to reduce or defer U.S. federal and state taxes
  • Protection for the principals from liability, and, if necessary, assistance with dispute resolution
  • Intellectual property implications of an investment in the United States and the most optimal structures for protecting U.S.-based IP assets
  • The application and effects of existing U.S. immigration laws and future changes to those laws
  • Evolving trends and legislation that may affect offshore investors and foreign corporate parents

Source Materials and Legal Analysis

The Foreign Investment and National Security Act of 2007 (FINSA) is the statute under which the federal government now regulates foreign direct investment into the United States. FINSA applies to certain mergers, acquisitions and takeovers by or with foreign persons, referred to as “covered transactions." The essential element of a covered transaction is that control of a U.S. business is transferred or could be transferred to a foreign person. Parties to a covered transaction may voluntarily file a notice with the Committee on Foreign Investment in the United States (CFIUS), the regulatory body, chaired by the Secretary of the U.S. Treasury, that administers and enforces FINSA. Once filed, CFIUS reviews and investigates the covered transaction and its participating parties, and then determines whether it will clear the notice. CFIUS refers to the President of the United States those notices as to which it is unable to make its determination. If parties do not file a notice for their transaction, or if CFIUS does not clear the notice, CFIUS has the unilateral authority to block the transaction from occurring or to seek divestment or rescission after it has closed. Because of this regulatory structure, parties to any transaction that may be a covered transaction are well-advised to know with certainty whether and when compliance with FINSA is required. 

To assist clients and other parties who wish to understand more about FINSA, its application and its effects on acquisition transactions, Sullivan & Worcester makes available as links on this page both relevant source materials and legal analysis of the statute and its implementing regulations:

Statutes:

Foreign Investment and National Security Act of 2007

Regulations:

Regulations of CFIUS as of November 8, 2008

Legal Analysis:

"Complying with the Voluntary Review Process When Investing In or Acquiring a U.S. Business."  April 2009 — a comprehensive guide, designed principally for legal and other advisors, intended to assist parties to covered transactions in assessing whether filing with CFIUS is advisable

"Recent Changes Require Attention to Enhanced Federal Regulation of Foreign Direct Investments into the United States."  May 2009 — an executive summary describing the operation of FINSA and the scope of CFIUS regulatory power

"Treatment of Loan Transactions by Foreign Lenders as Regulated Foreign Direct Investments." May 2009 — an analysis of the ways in which FINSA and the CFIUS regulatory regime affects foreign lenders and U.S. borrowers

"Evaluating Contractual Provisions That Relate to CFIUS Review: A Proposed Solution."  April 2009 — evaluates currently used representations, warranties and covenants in acquisition agreements and suggests the use of a separate agreement to govern the filing to be made with CFIUS, including a suggested form of agreement