Regulation S Safe Harbor In EB-5 Offerings

Recently, a question about Regulation S came to me from a team of very well regarded EB-5 regional center directors. I wanted to share this question with you, as well as our brief response. For those readers less familiar with the lingo, Regulation S was adopted by the Securities and Exchange Commission (SEC) as a safe harbor from the registration requirements of the Securities Act of 1933 for offshore offers and sales of securities.

Here is the question, our response and a practice tip.

May an issuer rely on Regulation S and D in one offering?

Yes. Regulation S may be relied upon for offers and sales outside the territory of the United States in a private placement even if coincident offers and sales are made in accordance with Regulation D. There is no exclusivity. Relying on both exemptions from registration is permissible. The legal authority is at Regulation D, Rule 500(g). This is codified at 17 CFR Section 230.500(g).