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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 38894
Experience:  Retired (mostly)
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The parent company of the subsidiary I work based in

Customer Question

The parent company of the subsidiary I work for is based in Amsterdam. We are in the shipping/transport industry and our subsidiary is based in the US. Management in the US has been offered the opportunity to invest in our parent company's assets, mainly specific ships. We were not provided too many details and I'm not familiar at all about foreign investments. So what questions should I ask? We will be having a meeting very shortly.
Thank you!
Submitted: 1 year ago.
Category: Tax
Expert:  socrateaser replied 1 year ago.


An investment in a foreign business or venture is not controlled by U.S. SEC regulation. There is also no protection via the U.S. Department of Labor. The only way to ensure that you are getting what you are paying for is to invest in the parent company through its securities traded on a U.S. national public exchange (NYSE, NASDAQ, etc.). A direct investment is only as good as the company's trustworthiness. I can't evaluate this, because I don't know anything about your employer or its parent. There may be private insurance available to protect your investment. If so, then you can separately investigate the insurer to determine whether or not this is sufficient risk mitigation.

You may also ask about whether or not the investment can be made through stock soled on a Netherlands national public exchange. That would also mitigate your risk, though not as much as investing through a U.S. registered security.

There are several U.S. traded shipping/vessel stocks which pay high dividends. Unless you are being offered a return far greater than the U.S. stocks, then you are taking a gamble, because once you have invested in the parent's vessels, you may not be able to recover your investment, even if you choose -- because the investment may be iliquid.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.

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