If a company decides to move overseas what kinds of things do shareholders have to worry about?
Also, what are the stockholders responsibilities when a company decides to move overseas?
Public Comments
- The main thing is the loss of accountability and oversight. Also, different governance and business laws of the host country. The stability of the government and the risk of nationalization as in Cuba and Venezuela also come to mind. Stockholder responsibility is to their own interest. Does the company's move alter it's situation in a way that affects it's performance in a way that would require consideration for a change in position. The stockholders have little to no input on such decisions unless of course you are a substantial shareholder that can influence board decisions. Never listen to anyone who tells you not to be concerned about relocating overseas. Prime Example currently suffering from this very thing are GE and Citigroup. Both companies have lost a degree of oversight and been racked with problems because of it. Latest, GE and missing their numbers for this exact reason. Citigroup, for criminal charges against several associates in foreign holdings.
- U didn't specify if the company was relocating or just expanding. Either way, you don't have any worrys at all. Relocating is looking for a more favorable environment or market for business than the one in which the company currently is. Expanding means your company is doing very well and is seeking to conquer new markets. Both movements should bring about better profits. Chin Up. I've got a site: http://yourfinancialuncle.googlepages.com. You should check it out. I have great financial tips on it.
- Now a days, not to much. If the shares pay dividends you may be subject to the foreign countries tax laws. Most times you can take tax credits against your income tax based on tax treaties. Your best bet is to have you shares held at a reputable securities dealer and let them deal with the headaches. Pay attention to the countries currency and its stability. That is probably the easiest way to lose. Also find out what exchange the shares can be traded on. Sometimes a company moves overseas but stays on the New York Stock exchange which mean you can sell it easily. Anyhow stay informed on what the company is doing.
