Tilden Moschetti: Can non US
people invest in your

syndication or fund offering?
Today we're going to talk about

that my name is Tilden
Moschetti. I'm a syndication

attorney with the Moschetti
syndication Law Group

specializing in Regulation D
Rule 506b and 506c offerings.

Let's face it, we live in a very
international interconnected

world, with investors located
throughout the globe in every

region. Matt, if it was the case
that the United States said no,

we don't want any foreign money
coming in. In order to make our

investor or our sponsors of
syndications and funds more

wealthy. Well, that would be a
darn shame because there sure

are a lot of investors out there
in other parts other than the US

and a lot of capital to invest
and grow wealth here within this

country. But fortunately for us,
investors from non US places can

invest into your syndications
and offerings. So if you've put

together a Regulation D offering
us investors from non US places

are actually coming in through a
different rule, a rule called

Regulation S, which allows
investors to invest if they're

not located in the United
States. Now, the rules are very

similar to those within
Regulation D, except for two

minor points. So under
Regulation S, we are not as

concerned whether or not they
are an accredited investor or

not. So if you have a Rule 506b
offering, it's not that we do

not count the people who would
are non accredited investors if

they're not in the United
States. Likewise, if we have a

Rule 506c offering, we don't
need to get a verification of

accredited status of that
investor. Now, we do need to

make sure when we're doing a
506b offering, however, that

advertisements for people not
within the US is possible. But

it cannot be something where the
advertisement came into the US,

we need to take a lot of
measures to make sure that the

advertisements made are very
specifically to non US people.

Because if a non US, if a US
person were to see an

advertisement, and it's a 506b
offering, then it's suddenly a

big problem, because they've
already broken the rules, you've

now had a general solicitation
inside of a Rule 506b offering,

which isn't supposed to happen.
So we do need to make sure of

that. The second thing is on the
resalability of the security

itself, under Regulation S, they
are limited to not be able to

resell their security for one
year. So we need to make sure

that that is known to the
investor as well, that non US

investor, you cover those two
things, and you make sure that

those are in your private
placement memorandum. And the

good news is yes, you can take
investor money from those non US

people. It's something that I
talk with my clients about very

regularly, it comes up in nearly
every context with sometimes

just one investor and sometimes
a whole bunch of investors. Now,

we can't guarantee that the that
raising money from those non US

investors won't violate the rule
in the other country. I don't

practice in any other country
other than the United States,

and I don't know the securities
laws of any other country. So

there is that caveat, and it's a
good idea if you're targeting a

specific other country to speak
with an attorney about those

rules as well to make sure that
you're not going to run afoul of

their rules, but under the US
rules, you will be fine. So my

name is Tilden Moschetti. I am a
Regulation D securities attorney

specializing in rules 506b and 506c.