Can foreign investors invest in Reg CF offerings through equity crowdfunding platforms?
The answer is yes. Foreign investors can invest in Regulation Crowdfunding equity crowdfunding in the U.S.
Let’s have a look on the Title III Regulation Crowdfunding of the US. Although the Regulation Crowdfunding doesn’t address explicitly the legal issues on foreign investors’ investment in securities offered on equity crowdfunding portals, on p. 266 of the Final Rule: Crowdfunding, SEC mentioned that:
We have considered the comments and believe that the final rule appropriately takes into consideration the need to provide more choices for U.S. issuers seeking to use intermediaries or access investors outside of the United States, while meeting the challenges associated with supervising, examining, and enforcing rules regarding activities of intermediaries based outside the United States.
The above paragraph is a discussion of Rule 400(g), registration pursuant to Rule 400 of Regulation Crowdfunding by a “nonresident funding portal”. (Mr. Crowd was the first nonresident funding portal registered with the SEC!) and it clearly indicates that the SEC allows companies to accept investors outside the United States. In fact, nonresident funding portal is designed to broaden US crowdfunding efforts to overseas and raise foreign investor capital for US companies, under the radar of the SEC and FINRA to ensure the enforcement of U.S. laws and regulations with respect to funding portals that are not based in the United States.
Allen Au - author
The Chairman and Chief Software Architect of Mr. Crowd
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