Advantages of SPACs Over Traditional IPOs
Considerations for Foreign Companies
• Although most SPACS are formed as Delaware corporations, several have been
formed in foreign jurisdictions.
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Cayman Islands is most common, followed by British Virgin Islands.
• A foreign SPAC may allow for a more efficient de-SPAC structure for a foreign Target.
• Therefore, foreign companies interested in going public through a SPAC transaction
should consider doing so with a SPAC formed outside of a US jurisdiction, such as the
Cayman Islands.
Foreign SPACS require engaging local counsel for corporate law matters.
• A post-de-SPAC foreign company could qualify as a foreign private issuer (FPI)
under SEC rules and be subject to the SEC's foreign filing regime.
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For example, FPIs may file annual and current disclosure reports on Forms 20-F and 6-K.
• Note: An offshore structure may present additional tax issues, such as passive
foreign investment company issues.
Morgan Lewis
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