Foreign issuers using Reg A and Reg CF

This post was originally written by our KorePartners at CrowdCheck. View the original article here.

For some reason, this issue has been coming up a lot lately. Our usual response to the question “Can non-US issuers make a Reg A or Reg CF offering?” is to point to the rules:

  • Rule 251(b)(1) says Reg A can only be used by “an entity organized under the laws of the United States or Canada, or any State, Province, Territory or possession thereof, or the District of Columbia, with its principal place of business in the United States or Canada.”

Slightly different formulations, as you can see, and note that Reg CF doesn’t say that the company needs to have its primary place of business here. But both exclude non-US or Canadian companies.

But we are getting a lot of pushback and “what if?” questions, so here are responses to a few of the most common:

  • What if we redomicile to the US? Well ok, that might work for Reg CF. It might work for Reg A too, if your management changes their domicile too (you need a bona fide principal place of business here). However, have you considered the tax consequences in your original home jurisdiction? Also, note that you’ll still need two years audited or reviewed financial statements, in US GAAP and audited or reviewed in accordance with US auditing requirements (US GAAS).

Originally published at https://www.koreconx.com on May 4, 2022.

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KoreConX a fully complaint Global Digital Securities protocol #digitalsecurities #IRPrivate @koreconx #shareholders #koreprotocol #CapTable www.koreconx.com

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KoreConX a fully complaint Global Digital Securities protocol #digitalsecurities #IRPrivate @koreconx #shareholders #koreprotocol #CapTable www.koreconx.com