More and more Asian companies are choosing to go public in the U.S., and one of the most popular routes is starting with an OTC markets listing before moving up to NASDAQ. But getting onto the OTC markets is just the first step. The real challenge is planning your next move strategically to successfully uplist to NASDAQ.
In this guide, we’ll break down the different paths to NASDAQ, who they’re best for, and what you need to do to increase your chances of success.
Two Main Paths to Uplisting from OTC markets
1. Start on OTC markets, Then Uplist to NASDAQ
This method works best for companies that are already profitable and want to grow their valuation before making the big leap. These businesses usually have long-term plans to tap into the U.S. market and are prepared to meet tougher financial and compliance requirements.
What You Need to Do:
- Ensure financials are SEC-compliant before listing on OTC markets
- Boost trading volume and market value to attract institutional investors
- Meet NASDAQ’s listing requirements (such as market cap, revenue, and shareholder count)
- Submit your application to NASDAQ and go through the review process
The biggest advantage of this method is that it allows companies to build credibility and attract investors, which can help increase valuation before uplisting. However, it requires at least one to two years of preparation and continuous compliance with strict financial and regulatory requirements. This path is ideal for companies that have a proven business model and want to play the long game.
2. Reverse Merger (RTO) via OTC PINK markets Shell Company
For a faster way to get listed, some companies opt to buy a shell company in the OTC PINK markets and merge into it through a Reverse Takeover (RTO). This method works well for businesses that aren’t quite NASDAQ-ready but want a quicker entry into the U.S. stock market.
What You Need to Do:
- Find a clean shell company with no financial or legal issues
- Complete a share exchange to merge your business into the shell
- Increase trading activity to maintain stock liquidity
- Set a clear plan for uplisting to NASDAQ when the time is right
The biggest advantage of an RTO is speed, as the process can be completed in as little as three to six months. It is also less complex compared to a traditional IPO. However, the downside is that not all shell companies are of good quality, and some may come with financial or legal risks. Additionally, liquidity may be low, making financing more difficult.
This method is best for companies that need a quick market entry and have strong post-listing plans.
How Hexcellence Consulting Can Help
At Hexcellence Consulting, we specialize in helping companies list on the OTC Markets, Nasdaq, and NYSE. As a leading corporate advisory firm in Malaysia, we provide expert support for companies navigating the IPO process and U.S. market entry. In fact, we’re the first OTC Markets Premium Provider in the Asia-Pacific region.
Let us help you empower your business today! For more information about our advisory and consultation services and fees, contact us here or at +60 11 5636 6286 for our assistance.
