Share Schemes empower minority stakeholders in offshore expansion

AS MORE people understand the advantages of expanding overseas, South African business owners continue to expand their operations beyond local borders, taking advantage of easier access to global markets, protection against rand volatility, and exposure to more stable political and economic climates, among other aspects.

- BRANDON VOGES

But beyond the corporate headline of 'going global' lies a more nuanced challenge.

How can these business owners help their shareholders, especially minority stakeholders, to participate in offshore value creation without incurring individual costs or complexity?

While many shareholders understand the importance of diversification, they often do not have the resources to establish their own offshore structures. It is an uneven playing field that potentially limits shareholders’ long-term wealth creation.

Employee Share Schemes (ESSs) offer a practical way to include everyone in the team.

Instead of requiring each shareholder to establish a standalone offshore entity, a well-structured ESS can hold shares on behalf of multiple beneficiaries within a single trust.

This approach reduces cost, simplifies administration, and aligns the interests of all parties involved, without sacrificing control or compliance.

The real strategic value of ESSs