Bowater Industries has had long experience in the capital markets o the world. It issued ADRs in the US some 30 years ago and has been listed in Switzerland for about 20 years, for example. At a recent Euromoney conference in London, Geoffrey Jones, Bowater's treasurer, addressed some of the main questions that companies face when considering an international stock offering or listing. A number of constraining influences are inherent in the security itself The first 'is the domicile of the security or the paper itself. This is the starting point and the one to which the investor has to relate. Is he interested in a security denominated in a particular currency &om a particular country? He then has to decide - if he does invest in a foreign security - what other considerations must be taken into account when making that investment decision. One of' the most significant considerations is taxation.
The investor has to take into account the taxation of dividend flows, withholding taxes and taxes on capital, such as stamp duty. These are the obvious considerations but there are some less obvious ones. Different tax regimes have different views as to what constitutes income and what constitutes capital, so the poor international investor can be quite at risk.