Categories: Finance

How to Raise Money With a Foreign Stock Offering

Without the advertising and solicitation restrictions imposed by Regulation D, are you interested in raising capital for your existing or new business? A Foreign Stock Offering needs to be launched. A Foreign Stock Offering is a private placement offering that uses Regulation S, a rarely used federal law that allows capital to be raised in foreign countries without having to go through the costly and time-consuming process of registering federal securities. The S Offering Regulation (Reg. S) is an exemption designed by the SEC for companies seeking to raise capital from U.S .- based OUTSIDE investors. Regulation S as amended under the 1933 Securities Act (the “Securities Act”) It is a safe harbor rule that defines when offering securities as an “offshore transaction” so as not to be subject to the registration obligations imposed pursuant to Article 5 of the Securities Act.A Foreign Stock Offering can often be more effective than an exempt private placement offering in the United States in addition to time and money savings. Unlike the restrictions imposed by Regulation D, a U.S. company or any person acting on behalf of that company seeking to raise capital using the MAY exemption of Regulation S:

-Offer or sell its securities using any form of “general advertising” or “general advertising” unless directed to the U.S.


 -Use direct mailing lists of foreign investors


 – Pay finders fees for non-U.S. referrals. Accredited investors (not brokers)


Regulation S exempts the issuer only from the requirements for registration. It does not exempt the issuer from provisions on anti-fraud.The SEC has wide powers of jurisdiction.  They take the view that if fraudulent behavior takes place within the U.S. or has an effect within the U.S., they can take action against the issuer even if the securities are sold abroad.


If you are considering raising money offshore using Regulation S, you need to know the following: There are two main requirements when using Regulation S. The first is that the securities must be offered and sold in legitimate offshore transactions. You may not offer or sell any securities to a U.S. citizen or resident even if the resident buys the securities abroad Or safe havens from U.S. securities registrations: an exemption for initial sale and another exemption for resale of securities after holding them for a period of time – usually one year. An important advantage of using Regulation S is that you can advertise in newspapers and other publications in foreign markets.


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