Guidelines for a successful cross-border acquisition

At the same time, cross-border acquisitions require careful planning. International tax rules, local regulations, employment laws, data privacy requirements, currency issues, culture, and supply chain challenges can all affect the deal’s success.

For companies willing to navigate the added complexity, international expansion can provide meaningful advantages, including access to talent, proven demand, established market presence, economies of scale, and more diversified revenue streams. Because these deals involve both the target business and the country where it operates, planning, due diligence, and local expertise are especially important.

Choose the right market

When evaluating a foreign market, it is necessary to consider market potential, business climate, infrastructure, economic and political stability, currency, labour availability, supply chains, and regulatory requirements. Look for countries with favourable laws, a skilled workforce, reliable infrastructure, and a business environment that supports long-term growth.

Find and evaluate a target

Once you’ve chosen a market, evaluate potential acquisition targets based on strategic fit, industry position, market share, management team, customer concentration, company culture, and financial health.

Conduct due diligence

Before signing a sale and purchase agreement, know the target’s current financial health, legal compliance, contracts, intellectual property, tax exposure, and non-tax liabilities.

For a foreign acquisition, due diligence should also confirm compliance across jurisdictions. This includes local tax laws, employment rules, licensing requirements, data privacy regulations, and industry-specific obligations.

Plan the transaction

Plan the structure of the deal during due diligence. For example, determine whether the transaction should be a stock or asset acquisition, who will purchase the target entity, and how the ownership structure will affect tax and legal outcomes. Because tax considerations can shape the ownership structure and cross-border business model, international tax advice is key.

Integrate the acquisition

After the deal closes, align operations, supply chains, assets, business functions, and risks across the combined group. The goal is an efficient operating and tax structure that supports the company’s broader strategy.

Plan the management structure

How the acquired business is managed depends on the company’s goals and resources. In some cases, the parent company leads strategy while local leaders manage operations. In others, the acquired company may retain more independence.

Working with international tax advisors during the process can help reduce risk and support a smoother acquisition.

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Jack Millhouse specialises in directing international tax engagements, including inbound, outbound, compliance, planning, consulting, and startups for global corporations, partnerships, and high-net-worth families. Jack has a Bachelor of Science in Accountancy from the University of Notre Dame, and his Juris Doctorate from The John Marshall Law School. He is a member of the AICPA and ICPAS, and is a certified public accountant.