- Legal & Deal Process
Currency, Exchange Control and Getting Paid
Agreeing a price is one thing. Getting the money where it needs to go, in the right currency, at the right time, is another problem entirely.
Price currency is a decision, not a detail
In a cross-border deal, one of the first questions to settle is which currency the price is denominated in. This is not a technicality. The choice determines who carries the exchange-rate risk between signing and payment. A price set in the seller's local currency puts the risk on the buyer; a price in the buyer's currency puts it on the seller; a price in a third currency, such as US dollars, puts it somewhere in between. Settle this early and make sure both sides understand the consequences.
Exchange-rate risk does not end at completion
If any part of the purchase price is deferred — a seller loan, an earn-out, staged payments — the exchange rate on the day of each future payment may differ significantly from the rate on the day the deal was signed. That difference can be large enough to change the real value of the deal for either party. The agreement should address how this risk is handled, whether through a fixed rate, a collar, or an accepted float.
Exchange control: can the money move?
Many countries operate exchange controls that restrict or regulate the movement of funds across borders. A buyer may need approval to send purchase money out of their country. A seller may need approval to receive foreign currency or to repatriate proceeds. The rules, and the time they take to navigate, vary significantly between jurisdictions. In some markets, obtaining the necessary approvals is straightforward; in others it is the longest lead-time item in the deal. Do not assume the money can move freely just because the commercial terms are agreed.
Timing matters
Even where approvals are in place, the practical mechanics of moving money across borders take time. Bank processing, compliance checks, correspondent-bank routing and local settlement rules all affect when funds actually arrive. Build realistic timelines into the deal, and do not tie completion to a payment date that the banking system cannot reliably meet.
Plan this from the start
Currency, exchange control and payment mechanics are not problems to solve at the end of a deal. They are constraints that should shape the deal structure from the outset. Engage a foreign-exchange adviser and understand the regulatory position in every relevant jurisdiction before you agree terms. The commercial deal is only as good as the payment route that delivers it.