Unlocking the World: US Syndications Open to Non-US Investors

Non-US individuals can invest in syndications or fund offerings. In today's globalized world, we have investors from various regions around the globe seeking opportunities to grow their wealth. Thankfully, the United States allows foreign investors to participate in syndications and offerings through a rule called Regulation S.

Regulation S is similar to Regulation D, which governs US investors, with a few minor differences. Firstly, we are not as concerned about whether non-US investors are accredited or not. In a Rule 506b offering, we don't exclude non-accredited investors based on their location outside the United States. Similarly, in a Rule 506c offering, we do not need to verify the accredited status of non-US investors.

When conducting a 506b offering, it's crucial to ensure that advertisements are specifically targeted to non-US individuals. Advertisements should not inadvertently reach US residents as it would violate the rules, as general solicitation is not allowed in Rule 506b offerings. Careful measures must be taken to maintain compliance.

The second consideration under Regulation S relates to the resalability of the security. Non-US investors are generally restricted from reselling their securities for one year. It's essential to inform the non-US investor about this restriction in the private placement memorandum.

I regularly discuss the acceptance of funds from non-US investors with my clients, whether it's a single investor or a group of investors. However, it's important to note that while we can ensure compliance with US rules, it's advisable to consult with an attorney knowledgeable in the securities laws of the specific country if you are targeting investors from that country. I specialize in US securities laws and cannot provide advice on regulations outside the United States. Ensuring compliance with the rules of both the US and the target country is crucial for a successful investment.

Read more about Reg D - The SEC and Its Regulation D: https://www.moschettilaw.com/sec-reg-d/

Read more about Reg D Structure - How should you structure your Reg D syndication offering?: https://www.moschettilaw.com/reg-d-syndication-structure/

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Moschetti Syndication Law Group is a boutique syndication law firm, serving small and growth-bound syndicators, and well as private equity firms. We keep our firm ‘boutique’ size so we can tailor the services to each client’s unique needs without turning the firm into a faceless factory or passing unnecessary overhead expenses onto our clients. (As our client, you’ll only pay a fixed fee, so no surprises.) As for the client experience, we give real-time answers without making you book an official appointment. And we’ll work with your ambitions and overall vision to help you close the current deal and fill-in that ‘missing’ piece - whatever you need - to keep adding more syndications to your portfolio. We keep syndicators syndicating (TM).

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