Risk and compliance

Regulation S

Also called Reg S, Regulation S offering.

Regulation S is the Securities Act rule set that treats offers and sales occurring outside the United States as falling outside the registration requirement of section 5, and it is the exemption most EB-5 offerings rely on when selling to investors abroad. The EB-5 statute expressly preserves it for regional centers.

What it decides

17 CFR 230.901 provides that for purposes of section 5 of the Securities Act the terms offer and sell do not include offers and sales that occur outside the United States. The issuer safe harbor at 230.903(a) requires an offshore transaction and no directed selling efforts in the United States. An offshore transaction, defined at 230.902(h)(1), means the offer is not made to a person in the United States and, when the buy order is originated, the buyer is outside the United States or the seller reasonably believes so. Equity in a domestic new commercial enterprise sits in Category 3 at 230.903(b)(3), which adds offering restrictions, a one year distribution compliance period, purchaser certification, an agreement to resell only under Regulation S, a transfer legend and a duty to refuse non-conforming transfers. Congress left the route open: 8 U.S.C. 1153(b)(5)(I)(i)(I) asserts United States jurisdiction over any security a regional center sells, and subclause (II) then says the regional center is not precluded from selling under Regulation S so long as it actually complies with it.

Governed by 17 CFR 230.901; the issuer safe harbor and Category 3 conditions at 230.903(a) and 230.903(b)(3)(iii); the definitions of directed selling efforts, distribution compliance period, offering restrictions and offshore transaction at 230.902(c), (f), (g) and (h); the non-integration safe harbor for a concurrent Rule 506 offering at 17 CFR 230.152(b)(2). Regulation text read from the eCFR renderer API for title 17 on 5 August 2026. Statute at 8 U.S.C. 1153(b)(5)(I)(i), headed Jurisdiction, read from the govinfo US Code text of 8 U.S.C. 1153, which is already in the project source registry.

Related terms

Regulation D and Rule 506Regulation D is the Securities Act rule set whose Rule 506 lets an EB-5 issuer sell interests in the new commercial enterprise without registering them with the SEC, on conditions that fix who may buy, whether the deal may be advertised, and what the issuer must tell a purchaser who is not accredited.
Private placement memorandumA private placement memorandum is the disclosure document an EB-5 issuer gives an investor before subscription, setting out the deal terms, the people behind it, the fees taken out of the money and the ways the money can be lost, and since 2022 a regional center must file it with USCIS along with the rest of its offering documents.
Securities law complianceSecurities law compliance is the EB-5 duty, written into 8 U.S.C. 1153(b)(5)(I) by the Reform and Integrity Act of 2022, that a regional center and every party associated with it obey federal and state securities law, certify that they do to be designated and again every year, and submit to United States jurisdiction over the offering.
Subscription agreementA subscription agreement is the contract by which an investor buys an interest in the new commercial enterprise, carrying the price, the investor's representations, the closing conditions and, where the offering uses one, the terms on which money leaves escrow.

Checked against primary sources on 10 August 2026. Back to the glossary