The US IPO market for tiny foreign companies has dried up as regulators increase scrutiny on microcap listings. The SEC and exchanges have tightened rules for foreign issuers with small market capitalizations, citing fraud risks and accounting opacity.

In 2023, only a handful of foreign microcaps went public in the US, down from dozens in previous years. The Holding Foreign Companies Accountable Act and enhanced auditing requirements have made compliance costly for firms with limited resources. Many opt for listings in Hong Kong or London instead.

Bankers say the trend reflects a broader shift: US investors are wary of opaque foreign small-caps after high-profile blowups. While larger foreign IPOs continue, the pipeline for sub-$100 million deals has virtually disappeared. Exchanges now demand more rigorous financial disclosures and US GAAP reconciliation, adding months to the process.

Some argue the rules protect investors but may also block legitimate emerging-market firms from accessing US capital. The SEC maintains that transparency is non-negotiable. For now, the US microcap IPO window remains shut for most foreign hopefuls.