Regulations in Cross-Border Deals
In Canadian cross-border deals, it’s important to be aware of some key regulatory matters that can affect deal closing.
Core Insights
Employment transfers aren’t automatic. In asset sales, employees don’t automatically transfer to the buyer. You decide whom to rehire, and sellers remain responsible for anyone you don’t. That flexibility can lower costs - but requires careful planning around offers and continuity.
Privacy laws. Canada’s federal and provincial privacy laws restrict how personal data can be shared and transferred, even in due diligence. Buyers must ensure access to HR, customer, and vendor personal data complies with consent rules or risk post-closing exposure.
Foreign investment review. Under the Investment Canada Act, all foreign acquisitions of Canadian businesses must be notified. Some require pre-closing approval if they exceed size or sector thresholds (ex: defense, health, critical goods).
Competition Act. Under the Competition Act, deals above certain size thresholds may require pre-merger notification from Canada’s Competition Bureau, which may issue supplementary information requests.
Takeaway
Jurisdiction-specific regulations can materially affect timelines and execution. Engaging counsel experienced with cross-border transactions helps anticipate and manage these nuances efficiently.
Ink LLP is a business law firm with focused expertise in venture capital, mergers & acquisitions, and complex commercial transactions.
This information is provided for informational purposes only, is highly generalized, and is not legal advice.