Protection of a client’s assets in a foreign country has always been one of a lawyer’s most uncertain problems. Today, with international trade depending increasingly upon foreign corporate entities, the protection of foreign assets is even more difficult than before. And the difficulty is the price which must be paid for benefits derived from organizing some form of legal person under foreign laws for the purpose of conducting foreign business. Preservation of the value of assets held by such organizations often depends upon whether a tribunal will look through the formal corporate organization to the ultimate owner and consider his interest.

Foreign corporate entities have various generic names, but all possess important common characteristics. They are artificial persons which can sue and be sued in their own names in the country of their organization. Although governments may contribute capital to them, they are usually private commercial organizations. At least some of their shareholders have limited liability. Corporate entities not infrequently are parts of a larger worldwide enterprise.

This article is restricted to tracing some of the influences behind foreign corporate difficulties and examining some of the representative cases.