Selling a business to a U.S. buyer from the UK presents an exciting opportunity—often yielding greater valuations and access to a larger market. However, cross-border deals come with their own set of legal risks and complexities. Without proper planning and advice, UK sellers can find themselves exposed to unexpected liability or contractual disputes.
In this article, Abrams Law outlines the key legal considerations when selling a UK business to a U.S. buyer and how to navigate the process safely and securely.
Do U.S. Laws Apply to UK Sellers?
Yes. If the buyer is based in the U.S., the transaction may be subject to:
- U.S. commercial law
- U.S. tax regulations (e.g., withholding tax)
- U.S. escrow requirements for purchase funds
- U.S. due diligence expectations
Even if the business operates entirely in the UK, the location of the buyer and their advisors can influence the deal structure and legal frameworks involved. A qualified us lawyer can help identify the points where U.S. law will impact the transaction, from contract clauses to post-closing conditions.
Key Legal Risks in U.S.-UK Business SalesContract Disputes
The sale agreement must specify the governing law and jurisdiction. A poorly drafted commercial contract agreement can lead to confusion, delays, or unenforceable terms if litigation arises. Choice of law and forum clauses are essential.
Tax Exposure
Without careful structuring, the seller could face:
- U.S. withholding tax on part of the proceeds
- Double taxation if treaties aren’t applied correctly
- Misclassification of income
A dual-qualified advisor can coordinate with tax professionals to mitigate exposure and protect the seller’s net proceeds.
Incomplete Disclosures
U.S. buyers expect detailed disclosure of financials, liabilities, and contracts. Failure to meet these standards can trigger post-completion claims under warranties and indemnities. Being unprepared may delay the closing or reduce the final price.
Delayed Payment
In many cross-border deals, a portion of the purchase price is held in escrow services accounts for 6–24 months. This protects the buyer against undisclosed liabilities, but also poses risks to the seller if not properly negotiated.
Structuring a Secure Cross-Border Sale
- Hire a firm familiar with the US and UK legal systems
- Ensure your commercial contract agreement includes clear remedies, representations, and dispute resolution terms
- Secure payment through escrow services to protect both sides and outline release triggers
- Conduct a pre-sale audit to prepare for U.S.-style due diligence
- Coordinate with advisors on tax treatment and currency exchange considerations
Engaging a us lawyer early in the process helps streamline negotiations, flag jurisdictional issues, and gives buyers confidence in your professionalism.
Role of Escrow in International Business Sales
Escrow services are essential in cross-border M&A deals. They:
- Hold part of the proceeds until post-sale conditions are met
- Provide security for buyers while ensuring sellers are paid
- Reduce litigation by offering a clear mechanism for handling disputes
Several escrow services UK providers now support cross-border sales using USD and GBP, which simplifies currency conversion, banking logistics, and regulatory compliance.
Why Commercial Contract Precision Matters
The heart of any deal is the commercial contract agreement. It governs what you’re selling, when, and on what terms. Mistakes or vague language can:
- Cause costly delays
- Create post-closing liability
- Jeopardise earn-outs or future performance-based payments
Reviewing this document with a us lawyer ensures it holds up under scrutiny in both jurisdictions and accounts for regional differences in enforceability and interpretation.
How Abrams Law Can Help
At Abrams Law, we specialise in cross-border M&A, supporting UK and EU companies that are selling their businesses to U.S. buyers. As both UK solicitors and U.S. Attorneys, we:
- Draft and negotiate enforceable commercial contract agreements
- Coordinate with tax, IP, and finance teams
- Set up escrow services uk accounts
- Protect your interests during U.S.-style due diligence and negotiation
If you’re considering selling your business to a U.S. buyer, Abrams Law can guide you through every stage of the process with clear, confident legal advice.
📧 Email: info@abrams.law
📞 Phone: +44 208 004 7016
