There is a separate exemption — Regulation S — for Non-U.S. Persons. The rule for Reg S says there are no financial qualifications for Non-U.S. Persons who invest in a U.S. Offering under Regulation S. However, the industry standard is:
- If it’s a Rule 506(c) Offering to U.S. Persons, then all investors — regardless of whether they are U.S. or non-U.S. Persons — should be Accredited.
- You need a separate PPM and Subscription Agreement for Reg S investors, as Reg S doesn’t allow advertising in the U.S., so you need to provide separate offering docs just for them, but they can invest in the same company as Rule 506(c) investors.
The real question, however, is whether the investor is actually a Non-U.S. Person, which means they are:
- Not a U.S. citizen, legal resident or living in the U.S.,
- Signing the Subscription Agreement outside the U.S., AND
- Wiring their funds from a bank account outside the U.S.
If they don’t meet ALL of the tests listed above, they are treated the same as any other U.S. investor and have to get verified as an Accredited investor to invest in a Rule 506(c) Offering.
