The methods travel. The assumptions do not. Here is what to change when you value a business outside the major markets — and what to leave alone.
What stays the same
The three approaches — income, market and asset — apply universally, as does the logic of normalising earnings and bridging enterprise value to equity value. A DCF in Nairobi is built exactly like a DCF in Nashville.
Discount rates and country risk
Build the discount rate from a local risk-free rate in the same currency as the cash flows, or use a mature-market rate plus a country risk premium. Never mix a US-dollar discount rate with local-currency cash flows; either convert the forecast or convert the rate, and disclose which.
Inflation and currency
- Keep the forecast and the discount rate consistently nominal or consistently real
- In high-inflation economies, model in a stable currency or use real terms
- State the valuation currency and the exchange rate basis on the face of the report
Tax matters more than owners expect
Corporate tax rates, capital gains treatment, depreciation and loss carry-forward rules all move after-tax cash flow. Withholding tax on dividends and any restrictions on repatriating funds affect what a foreign buyer actually receives, and therefore what they will pay.
Market depth changes the multiple
Where there are few active buyers, illiquidity is greater and multiples compress. Where private equity and trade consolidators compete for scale assets, multiples expand. Local transaction evidence beats a global average every time — but a global average with a stated adjustment beats no evidence at all.
Practical approach
Use international benchmark multiples as the anchor, adjust explicitly for country risk, tax and market depth, then cross-check with a locally built DCF. Document each adjustment so a reader can disagree with one input without discarding the whole valuation. Utopia Value works in any country and in 50+ reporting currencies on exactly this basis.