Is a Reg D 506 Private Placement Memoranda an acceptable mechanism under which to take foreign investment?

Question

Is a Reg D 506 Private Placement Memoranda an acceptable mechanism under which to take foreign investment?

Answer 1

In  a Private Placement, one would definitely fall under Reg D rules. Whether is be 504, 505, or 506 is not prob the central issue.

The fund should be off shore for the foreign investors.  All investors should be accredited or qualified purchasers. I would not have any non-accredited people in the fund. These are the liability investors - who are mostly likely to sue and win if the fund loses a dime.

If the fund has USD $25MM or more it would need to be registered with the SEC if it has presence in the USA and or has US investors.

If the fund is under $25MM and has US investors or is based in the USA, then it would be regulated by State Securities Law in the state where you and the fund resides.

I have done a lot of work in this area in developing hedge funds, and it is way to complex to answer here. I would definitely get a securities attorney who has special knowledge in this area.

Good Luck with the biz!