Most equity education is quietly written for one company: a Delaware C-Corp raising on YC documents. Useful, until your company is a London Ltd, a Bangalore Pvt Ltd, or an ADGM entity in Abu Dhabi, and half the advice stops mapping. The math of dilution is universal. The wrapper is not.
This lesson is a working map of startup equity by country: the entity, the local convertible instrument, the valuation regime, the number formats, and the governing law, then what changes when you flip or expand across borders.
The entity comes first
Every downstream choice (instruments, valuation rules, filings) hangs off the legal form of the company. Five patterns cover most venture-backed startups:
- United States: the C-Corp, almost always in Delaware. A charter authorizes a fixed number of shares (increasing it needs a stockholder vote); the board approves each issuance. This is the form US venture documents assume, the reason "just use the standard docs" advice works there and only there.
- UK: the Ltd (private company limited by shares). Shares have a nominal value, allotments are filed at Companies House on form SH01, and, unlike Delaware, existing shareholders have statutory pre-emption rights over new issues unless the shareholders disapply them. Forget that step and an allotment can be challengeable.
- Singapore: the Pte Ltd, the default holding company for Southeast Asia. No par value (abolished in 2006), filings with ACRA, and a companies act familiar to anyone who knows UK law. Many Indonesian, Vietnamese, and Malaysian startups incorporate a Singapore topco precisely because investors trust the wrapper.
- India: the Pvt Ltd under the Companies Act 2013. Shares typically carry a ₹10 face value, private placements follow a prescribed statutory process, and any foreign investment brings India's foreign-exchange rules (FEMA) into the room.
- UAE and Saudi Arabia: free-zone entities and new company forms. In the UAE, venture deals cluster in the DIFC (Dubai) and ADGM (Abu Dhabi), financial free zones running English-style common law with their own courts and companies regulations, rather than in mainland LLCs; founders in Qatar, Bahrain, Kuwait, and Oman often raise through the same free-zone holding structures. Saudi Arabia's Companies Law 2022 added a Simplified Joint Stock Company designed for exactly this: flexible share classes and workable ESOPs under CMA oversight.
The practical test for any entity: can it issue multiple share classes, grant options, and take on convertible instruments without a regulator's case-by-case approval? C-Corps, Ltds, Pte Ltds, and Pvt Ltds all pass. Mainland GCC LLCs historically didn't, which is why the free zones exist.
One idea, five instruments
Every market has converged on the same early-stage idea (money now, shares later, priced by the next round), but the local wrapper differs in ways that change the math. If SAFEs and convertibles are new to you, read that lesson first; here's the cross-border translation table:
| Market | Instrument | Debt? | Interest | Must convert? |
|---|---|---|---|---|
| US | SAFE | No | None | No maturity; waits for a trigger |
| UK | ASA (Advance Subscription Agreement) | No | None | Yes, a longstop date (often ~6 months, to preserve S/EIS relief) forces conversion |
| UK / SEA | CLN (Convertible Loan Note) | Yes | Yes, accrues | Converts or is repaid at maturity |
| UAE / GCC | Convertible Loan (or a Mudaraba profit-share structure where Sharia compliance matters) | Yes | Interest or profit share | Converts or is repaid at maturity |
| India | CCD (Compulsorily Convertible Debenture) | Debenture in form | Often a small coupon | Yes, conversion is mandatory, which is why FEMA treats it as equity for foreign investors |
The differences that bite: a SAFE has no maturity date and accrues nothing; a CLN is real debt that grows with time and can, in theory, be called; an ASA must convert by its longstop; a CCD must convert, full stop. An optionally convertible note held by a foreign investor in India is treated as external debt, a different regulatory universe. Same term-sheet conversation, materially different instruments.
Worked example: the same 500,000 through two wrappers
An investor puts in $500,000, and the Series A prices shares at $1.00 with a 20% conversion discount (conversion price $0.80). The round closes 18 months later.
As a SAFE (US): no interest. Converting amount = $500,000 → 500,000 ÷ 0.80 = 625,000 shares.
As a CLN (UK/SEA) at 8% simple interest: interest accrued = 500,000 × 8% × 1.5 years = $60,000. Converting amount = $560,000 → 560,000 ÷ 0.80 = 700,000 shares.
Identical check, identical discount, but the CLN holder gets 75,000 more shares (12% more) purely because the wrapper accrues interest. Founders comparing "a SAFE at these terms" with "a note at these terms" are not comparing like for like.
Who values your shares, and how often
When you grant options, someone has to say what the shares are worth, and each jurisdiction appoints a different someone.
- US: the 409A valuation. An independent appraisal of common-stock fair market value under IRC Section 409A, refreshed at least every 12 months or after any material event. Strike prices at or above the 409A FMV get safe-harbor protection; grants below it can trigger penalty taxes for the employee. Covered in depth in the 409A lesson.
- UK: the FMV Assessment. For EMI option schemes, companies agree a share valuation with HMRC in advance; the agreed figure is only valid for a short window (on the order of 90–120 days), so grants are batched against it. The cadence is event-driven, not annual.
- India: the Valuation Report. Share pricing for issuances is anchored by a report from a registered valuer or SEBI-registered merchant banker, required under company law and FEMA pricing rules, especially when foreign money is involved. It exists to police the issue price, not just option strikes.
- GCC and Singapore/SEA: deal-driven. No statutory 409A analog. Valuations come from the round itself or a commissioned report; the discipline is contractual and investor-driven rather than tax-mandated.
The regime follows the issuer, and the taxpayer. A Delaware topco with an engineering subsidiary in Bangalore still needs a 409A for its optionholders who are US taxpayers, and may need Indian valuation work for issuances into the local entity. Cross-border companies often run two regimes at once. Asking your Indian CA for "a 409A" (or your US appraiser for an HMRC-agreed value) gets you a confused email either way.
Numbering and currency: lakh, crore, and pegs
India groups digits differently, and if you've never seen it, real term sheets become misreadable. A lakh is 100,000 (written 1,00,000); a crore is 10,000,000 (written 1,00,00,000). Grouping runs three digits, then twos: ₹12,34,56,789. Indian documents state amounts in lakh and crore, and share counts too: "a 30 lakh option pool" is 3,000,000 options.
Worked example: reading an Indian term sheet
A term sheet reads: "₹12 crore pre-money, raising ₹3 crore, with a 30 lakh share ESOP pool on a 2 crore fully diluted base."
Translated: pre-money ₹120,000,000; raise ₹30,000,000; post-money ₹150,000,000. Investor stake = 3 ÷ 15 = 20%. Pool = 3,000,000 ÷ 20,000,000 = 15% of fully diluted shares.
At an illustrative ₹83/USD: pre-money ≈ $1.45M, raise ≈ $361,000. Misread "crore" as "million" and you're off by a factor of 8.3.
Currency conventions cut the other way in the UAE and Saudi Arabia: the AED and SAR are pegged to the US dollar, so deal documents across the UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman are frequently drafted in USD even when the company banks locally. Singapore topcos routinely raise USD-denominated SAFEs. The operational rule: record the instrument in its contract currency and convert only for reporting, otherwise FX drift quietly corrupts your cap table. This is also where tooling either helps or fights you: Vquity's region profiles for the US, UK/EU, UAE, Saudi Arabia, India, and Singapore/SEA carry the local instruments, currency and numbering formats (including lakh/crore), and the correct valuation label, so the app matches the documents your lawyers actually produce.
Governance frameworks: who approves what
Behind every issuance sits a statute that says who must approve it and what gets filed.
- Delaware: DGCL. The board issues shares within the charter's authorized count; exceeding it means a charter amendment and a stockholder vote. Discipline lives in board consents, and there's no public filing per issuance.
- UK: Companies Act 2006. Directors need authority to allot, statutory pre-emption applies unless disapplied by special resolution, and every allotment is filed publicly at Companies House. Your cap table is, in outline, public record.
- India: Companies Act 2013. Private placements follow a defined offer process with board and often shareholder special resolutions, valuation support, and MCA filings. More procedural steps per round than any other market on this list.
- Saudi Arabia: Companies Law 2022. The 2022 rewrite modernized share classes and made employee share plans workable, with the CMA regulating how ESOPs are offered. Recent enough that practice is still settling; get current local advice.
- DIFC/ADGM. Each free zone has its own companies regulations and courts, modeled on English law, which is exactly why international investors accept them. Documents look familiar; the registry and regulator are local.
None of this changes the economics of a round. It changes the choreography: how many approvals, which filings, and how long between "signed" and "done".
What changes when you flip or expand
Two events force a company to confront startup equity by country all at once.
The flip. A share-for-share exchange puts a new topco (usually a Delaware C-Corp or Singapore Pte Ltd) above the existing company, typically because a lead investor requires it. Every line of the cap table is re-issued in the new entity, and nothing maps one-to-one: outstanding ASAs or CCDs must be exchanged for instruments the new jurisdiction recognizes (renegotiating the interest and maturity differences from the table above); the valuation regime switches (a UK company that flips to Delaware now needs a 409A, and existing EMI options can lose their tax status when the company becomes a subsidiary); and the exchange itself can be a taxable event for some shareholders. Indian flips in particular carry heavy foreign-exchange and tax complexity in both directions. Budget real legal time, and snapshot the cap table immediately before and after.
Expansion without a flip. Hiring across borders is the gentler version of the same problem. A US plan granting options to employees in the UK or India may need local sub-plans, country-specific securities analysis, and payroll withholding wired to each country's rules. Even in the US, Rule 701 eligibility, rolling sales-limit tests, and disclosure timing require attention. One line on your cap table; three legal regimes in practice.
The through-line of this whole lesson: equity concepts travel; equity paperwork doesn't. Learn your market's wrapper, keep records in the contract currency and local format, and treat any cross-border step as a project, not a signature. Next up: what all of this means for the people you're actually granting equity to: employees.