The SEC safeharbor for verification of accredited investors (1) is not geared toward foreign investors. For instance, the SEC provides that an issuer has taken reasonable steps to verify the status of an investor when they have reviewed the investor’s two most recent IRS tax forms to verify their income. Foreign investors often would not be able to squarely fit within the guidance because they do not file with the IRS. However, below are a number of ways that we can verify the accredited investor status of a foreign investor to comply with US law:
- Reviewing an investor’s filed foreign tax forms that report income for the last two calendar years;
- Reviewing an investor’s (a) bank statements, brokerage statements and other statements of securities holdings, or appraisal reports issued by independent third-parties; and (b) consumer report from a credible foreign credit reporting agencies; or
- A written confirmation from one of the following individuals that they have taken reasonable steps to verify and have verified that the purchaser is an accredited investor within the prior three months: (a) a licensed attorney in good standing in their licensing jurisdiction; or (b) an accountant that is in good standing in their licensing jurisdiction.
For any of the above, we request an english translation and it is also worth noting that any amounts listed in a foreign currency would need to equal to the US thresholds as of the review period.
(1) An accredited investor is anyone that has $1,000,000 USD in net worth, excluding their primary residence, or hasan annual income of at least $200k USD individually or $300k USD with their spouse.