Regulation S
Regulation S lets a company raise capital from international investors through offshore transactions outside U.S. registration, often run alongside a Regulation D round.
Raise capital from international investors through offshore transactions outside U.S. registration — often run alongside a Reg D round.
What You Get
- ✓Unlimited raise from non-U.S. investors
- ✓Runs in parallel with a Reg D 506(c) tranche
- ✓Offshore transaction compliance workflows built in
- ✓Distribution compliance period tracking
Built Into Every Deal
Flat-fee engagement. Directly Listed charges a flat platform fee plus an equity grant at signing — quoted individually for every deal. No percentage-of-raise surprises.
eSignature execution. Subscription agreements and engagement letters are executed through Adobe Acrobat Sign with full audit trails.
Payments. Funds are handled directly from investors to the issuer — by card for amounts under $5,000, or by ACH or wire transfer straight to the issuer's bank account. Directly Listed never holds the funds.
Issuer-exemption model. Directly Listed is a technology platform; offerings are conducted by issuers in reliance on their own exemptions, with compliance workflows — accreditation, investor limits, KYC — built into the software.
Flat Fee Disclosure
Our SEC-licensed attorneys, consultants, and listing advisors are all paid out of the flat fee we charge. There are no separate legal bills—only third-party costs, such as legal opinions, valuation reports, audits, transfer agent and DTC fees, exchange application fees, and any annual exchange fees.
The flat fee is determined by the scope of services provided and your company's stage, along with an equity grant that is likewise set according to your startup's stage and needs. Every deal is quoted individually.
Understanding Regulation S
Regulation S provides a safe harbor from U.S. Securities Act registration for offers and sales of securities that occur outside the United States. It imposes strict offshore-transaction and distribution-compliance conditions and does not relieve issuers of antifraud or other U.S. securities-law obligations — and is often run in parallel with a U.S. Reg D tranche.
At a glance
- ✓For offers and sales made outside the United States
- ✓Frequently paired with a domestic Reg D 506(c) round
- ✓Requires a genuine “offshore transaction”
- ✓Distribution compliance period restricts resales into the U.S.
- ✓Antifraud provisions still apply in full
- ✓KYC and geographic-location controls required
The offshore-transaction test
The gateway to the safe harbor is that the offer is not made to a person in the United States and the purchaser is located outside the U.S. (or the offeror reasonably believes so), or the transaction is executed on an established foreign securities exchange. Securities fall into categories that determine the applicable distribution compliance period and resale restrictions, with different tests for U.S. versus non-U.S. issuers.
What it does not do
Regulation S is not a blanket exemption from U.S. securities laws. Antifraud provisions remain fully applicable, and subsequent offers or sales into the United States during the distribution compliance period can jeopardize the safe harbor unless conducted under registration or another valid exemption. The courts and the SEC look beyond form to substance when assessing whether an offering truly occurred offshore.
Operational controls
Issuers should target offers only to non-U.S. persons, retain contemporaneous evidence of investors' offshore status, coordinate with foreign intermediaries and exchanges to confirm execution venues, and plan for the distribution compliance period and potential resale limitations. Because Regulation S interacts with other exemptions and with state and foreign law, issuers commonly engage counsel to map the structure and confirm the applicable category and compliance period.
This summary is provided for general information only and is not legal, tax, or investment advice. Offerings are conducted by issuers in reliance on their own exemptions; confirm current requirements with qualified counsel.
Regulation S, in depth
Regulation S, adopted by the SEC in 1990, draws the territorial line of the Securities Act: an offering conducted genuinely outside the United States to non-U.S. persons does not require SEC registration. Rule 903 provides the issuer safe harbor and Rule 904 covers resales. Two conditions apply to every offering — the sale must occur in an offshore transaction, with the buyer outside the U.S. when the order originates, and there may be no directed selling efforts that condition the U.S. market. There is no accredited-investor test; the gate is geography and status, not wealth.
Beyond those two conditions, safeguards scale with flowback risk across three categories. Category 1 — chiefly foreign issuers with no substantial U.S. market interest — carries no distribution compliance period, legends, or resale restrictions. Category 2, covering reporting foreign issuers' equity and reporting issuers' debt, imposes a 40-day compliance period plus legends and buyer certifications. Category 3, which captures most U.S.-connected offerings, runs 40 days for debt, six months for equity of reporting issuers, and one year for equity of non-reporting issuers, with transfer restrictions the issuer must enforce.
Reg S is self-executing — no filing grants it; compliant structure is the qualification. Issuers commonly pair an offshore tranche with a domestic Reg D round, keeping the two segmented so U.S. marketing does not contaminate the offshore leg, or with Rule 144A sales to U.S. institutions, and the combined raise can precede a NASDAQ or NYSE direct listing. Directly Listed handles the cross-border architecture — category analysis, certifications, legends, parallel-offering segmentation — scoped as a flat platform fee plus an equity grant.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
Regulation S — questions & answers
What are the main requirements for a Regulation S offering?
Every Reg S offering rests on two conditions. First, the offer or sale must be made in an offshore transaction — broadly, the buyer must be, or be reasonably believed to be, outside the United States when the buy order originates. Second, there may be no directed selling efforts in the United States — no marketing or activity intended to, or that could reasonably be expected to, condition the U.S. market for the securities. Beyond those universal conditions, additional requirements attach depending on the offering's category (1, 2, or 3): distribution compliance periods, resale restrictions, legends, and buyer certifications for Categories 2 and 3. The safeguards get stricter as the risk of securities flowing back into the U.S. increases.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
How long do Regulation S restrictions last?
It depends on category and security type. Category 1 has no distribution compliance period at all. Category 2 carries a 40-day period, applying to debt securities and equity of certain reporting foreign issuers. Category 3 has the longest restrictions: 40 days for debt, six months for equity of reporting issuers, and one year for equity of non-reporting issuers — which includes most U.S. domestic issuers. During the applicable period, the securities cannot be sold to U.S. persons, must bear a restrictive legend, and are subject to other safeguards. There is no single number: the answer ranges from zero to one year, and confirming the correct period for a specific offering is a key task for counsel.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
Reg D vs Reg S — what's the difference?
The core distinction is geography and investor base. Regulation D governs domestic private offerings — capital raised from investors within the United States without SEC registration. Regulation S governs offshore offerings to non-U.S. investors. They are not mutually exclusive: companies frequently run parallel offerings, using Reg D for U.S. accredited investors and Reg S for offshore investors at the same time, reaching both pools without registration. The key compliance point when combining them is segmentation: U.S.-directed marketing — which may involve general solicitation under 506(c) — must not contaminate the Reg S offering's no-directed-selling-efforts condition, and offshore activity must not undermine a 506(b) offering's ban on general solicitation. Same goal, different investor geographies.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
Regulation S vs Rule 144A — which one applies?
They serve different purposes and are often used together. Regulation S governs offshore sales to non-U.S. persons. Rule 144A governs resales within the U.S. to qualified institutional buyers — large institutional investors, generally those managing at least $100 million in securities. Which applies depends on where and to whom securities are sold: Reg S for the offshore leg, 144A for the U.S.-institutional leg. Large capital raises frequently combine the two — selling to QIBs in the U.S. under 144A and to non-U.S. investors offshore under Reg S simultaneously, capturing both investor pools without full SEC registration. An issuer might use one, the other, or both depending on its target investors.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
Do Regulation S investors have to be accredited?
No. Reg S imposes no accredited investor requirement the way Regulation D does. Its gatekeeping is geography and status — the investor must be a non-U.S. person located outside the United States — not wealth or income. An offshore investor does not need to meet U.S. accredited thresholds to buy Reg S securities; they need to be a genuine non-U.S. person in an offshore transaction. Their eligibility may instead be governed by their own country's securities laws, which can carry their own investor-qualification concepts. When a company runs parallel Reg D and Reg S offerings, the Reg D portion for U.S. investors does require accredited status — but that requirement comes from Reg D, not Reg S.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
What are the common mistakes in Regulation S compliance?
The most frequent are directed selling efforts into the U.S. — broadly defined and easy to trip inadvertently; even a U.S.-accessible website or press coverage can be a problem if not handled carefully — and selling to U.S. persons during the distribution compliance period, or failing to verify that buyers are genuinely non-U.S. persons located offshore. Issuers also contaminate a parallel Reg D offering by letting offshore activity look like general solicitation that undermines a 506(b) raise; use the wrong category or miscalculate the compliance period; and omit required legends, certifications, or transfer restrictions. A nominally offshore offering treated as a funnel back into the U.S. is the gravest error. Nearly all of these stem from underestimating how strict the offshore and no-U.S.-solicitation requirements are.
Related topics: Regulation D 506(b) · Regulation D 506(c) · Cayman Islands Structure · Our Product Line
More questions? Browse the complete FAQ — 459+ answers across every structure, the Issuer FAQ, or the Investor FAQ.