Foreign companies seek ways to avoid US registration

Foreign companies are concerned about a requirement that they register with the SEC if they have more than 300 individual US shareholders. Buying back shares might not be the answer.

According to new US securities legislation, any non-US company with more than 300 American shareholders must register with the SEC, whether or not it is listed in the US. The company cannot then deregister even after delisting from a US stock exchange.

The low shareholder threshold, lack of a listing requirement and the size of the US market means that the Sarbanes-Oxley Act requirement will apply to many international companies.