Question about cross-border deals, Canada to US

January 04, 2024

by a searcher from University of Toronto - Joseph L. Rotman School of Management in Toronto, ON, Canada

Hi there.

My name is Deep and I'm a self-funded searcher based in the GTA, Canada. I'm currently looking at companies all over Ontario, but am thinking about expanding my search to the Northeast US.

Does anyone know of a searcher who has successfully completed a cross-border deal? I'm sure there's a tonne of added complexity, and I'm wondering if it's worth it to expand my search south of the border.

Any intros or convos would be helpful!

Cheers,
DG

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Reply by a searcher
from University of Chicago in Vancouver, BC, Canada

^redacted‌, thanks for the tag. I'm a U.S./Canada dual citizen, so I suspect I am differently situated than ^redacted‌. I suspect for non-U.S. citizens, the issues are visas, taxes, and financing. The first two can be managed. But, one must be a U.S. citizen to take advantage of the SBA financing. So, unless there is a 50+ percent U.S. owner, I think SBA is off the table. Non-SBA financing from U.S. lenders might be hard. Canadian lenders might consider it, but I don't know all of the intricacies.

There is an old blog post that might have some helpful information on the non-financing aspects: https://jimsteinsharpe.com/international-searchers-inside-the-usa/

Reply by a searcher
from Queen's University in Canada

Hey, as most have said the two biggest things to contend with are financing and work visa. Now both are not big issues as someone rightly said. for financing; depending on the amount, industry and the source you want. the general rule is use local financing for loans but for others (equity, vc whatever) the money can come from heaven/hell and no one cares. Structuring is key. Immigration is a relatively easier one because there're non-immigrant visas like E2, L, the are cheaper and faster to (i..e. 100k investment) as well as immigrant visas (EB which cost a little more.) In fact, if you are a little creative, you can pay yourself as an investor and not a worker depending on how your work is done. This is apart from the consultant/advisor method that is also feasible.

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