US Person: Difference between revisions
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From the {{isia}} file, [[US person]] means different things to different people. Even different kinds of [[US Attorney]]. Even the ''same'' [[U.S. Attorney]], when holding different | {{a|contract|}}From the {{isia}} file, [[US person]] means different things to different people. Even different kinds of [[US Attorney]]. Even the ''same'' [[U.S. Attorney]], when holding different [[US Securities Regulation]]s in contemplation, or otherwise meditating on the golden mean. | ||
== | ==Regulation S of the Securities Act of 1933== | ||
For purposes of [[Regulation S]] of the [[Securities Act of 1933|1933 Act]], a partnership or corporation is a “[[U.S. Person]]” if it is either: | For purposes of [[Regulation S]] of the [[Securities Act of 1933|1933 Act]], a partnership or corporation is a “[[U.S. Person]]” if it is either: | ||
:(i) organized or incorporated under the laws of the | :(i) organized or incorporated under the laws of the [[United States]]; or | ||
:(ii) organized or incorporated under the laws of any jurisdiction other than the United States; and, it is formed by a [[U.S. person]] principally for the purpose of investing in securities not registered under the [[Securities Act of 1933]], unless it is organized or incorporated, and owned, by [[accredited investor]]s (as defined in [[Regulation D]] of the 1933 Act) who are not [[natural person]]s, estates or trusts. | :(ii) organized or incorporated under the laws of any jurisdiction other than the United States; and, it is formed by a [[U.S. person]] principally for the purpose of investing in securities not registered under the [[Securities Act of 1933]], unless it is organized or incorporated, and owned, by [[accredited investor]]s (as defined in [[Regulation D]] of the 1933 Act) who are not [[natural person]]s, estates or trusts. | ||
== | ==Securities Exchange Act of 1934== | ||
When considering a [[security-based swap]] under [https://www.law.cornell.edu/cfr/text/17/240.3a71-3 Part 240.3a71-3(a)(4)] of the [[Exchange Act]], a [[US Person]] is: | |||
*Any natural person who resides in the United States. | *Any natural person who resides in the United States. | ||
*Any partnership, corporation, trust, investment vehicle, or other legal person organized, incorporated, or established under the laws of the United States or having its principal place of business<ref>*Under the final rules, a “principal place of business” means “the location from which the officers, partners, or managers of the legal person primarily direct, control, and coordinate the activities of the legal person.” This definition also provides that the principle place of business for an externally managed investment vehicle “is the office from which the manager of the vehicle primarily directs, controls, and coordinates the investment activities of the vehicle.” in the United States. </ref> | *Any partnership, corporation, trust, investment vehicle, or other legal person organized, incorporated, or established under the laws of the United States or having its principal place of business<ref>*Under the final rules, a “principal place of business” means “the location from which the officers, partners, or managers of the legal person primarily direct, control, and coordinate the activities of the legal person.” This definition also provides that the principle place of business for an externally managed investment vehicle “is the office from which the manager of the vehicle primarily directs, controls, and coordinates the investment activities of the vehicle.” in the United States. </ref> in the United States. | ||
*Any discretionary or non-discretionary account of a [[U.S. person]]. | *Any discretionary or non-discretionary account of a [[U.S. person]]. | ||
*Any estate of a decedent who was a resident of the United States at the time of death. | *Any estate of a decedent who was a resident of the United States at the time of death. | ||
==Commodity Exchange Act of 1936== | |||
====Non-United States person==== | |||
Never one to be outdone, the commodities regulator defines US personhood in the negative. Here you must be aware of the pitfalls of ''not'' being a [[Non-United States Person]] for the purposes of Rule 4.7 of that act, “but excluding, for the purposes of Subsection 4.7(D) the exception to the extent it would apply to persons who are Non-United States Persons”. | |||
Sometimes, it becomes transparent that regulators really are wilfully engaged in the perpetuation of the [[legal eagle]]’s monopoly. | |||
Should you be interested: | |||
{{quote| | |||
“'''[[Non-United States person]]'''” means: | |||
:(A) A natural person who is not a resident of the United States; | |||
:(B) A partnership, corporation or other entity, other than an entity organized principally for passive investment, organized under the laws of a foreign jurisdiction and which has its principal place of business in a foreign jurisdiction; | |||
:(C) An estate or trust, the income of which is not subject to United States income tax regardless of source; | |||
:(D) An entity organized principally for passive investment such as a pool, investment company or other similar entity; Provided, That units of participation in the entity held by persons who do not qualify as Non-United States persons or otherwise as qualified eligible persons represent in the aggregate less than 10% of the beneficial interest in the entity, and that such entity was not formed principally for the purpose of facilitating investment by persons who do not qualify as Non-United States persons in a pool with respect to which the operator is exempt from certain requirements of part 4 of the Commission’s regulations by virtue of its participants being Non-United States persons; and | |||
:(E) A pension plan for the employees, officers or principals of an entity organized and with its principal place of business outside the United States.}} | |||
Given that some of the limbs are mutually exclusive — you can’t be a natural person ''and'' a corporation — we can only interpret that “and” as an oddly disjunctive “or”. | |||
The limb that gives the most trouble is limb D, seeing as it descends into a kind of fractal [[provuso]]. Putting this in simplified JC terms that are definitely not legal advice (nothing on this site is legal advice, okay?) we think this means | |||
{{quote| | |||
A passive investment vehicle that | |||
:(a) was not designed to facilitate investment by US persons in a vehicle that is exempt from CFTC regulations, and | |||
:(b) in which fewer than 10% of the beneficial interests in the vehicle are in fact held by US Persons}} | |||
So let us revisit that [[excluso]] from the [[provuso]]. It generally runs like this: | |||
{{quote| | |||
“any person who is not a “Non-United States person” (as such term is defined in Rule 4.7 under the U.S. [[Commodity Exchange Act of 1936]], as amended, but excluding for purposes of subsection (D) thereof, the exception to the extent that it would apply to persons who are not Non-United States persons)}} | |||
===Tax== | |||
A US person is | A US person is | ||
*Every United States Citizen, whether born in or outside the US, whether by descent or naturalisation. | *Every United States Citizen, whether born in or outside the US, whether by descent or naturalisation. | ||
| Line 19: | Line 49: | ||
DON’T YOU WISH YOU’D NEVER ASKED. | DON’T YOU WISH YOU’D NEVER ASKED. | ||
{{sa}} | |||
*[[Non-United States person]] | |||
{{ref}} | {{ref}} | ||
Latest revision as of 13:30, 14 August 2024
From the I’m sorry I asked file, US person means different things to different people. Even different kinds of US Attorney. Even the same U.S. Attorney, when holding different US Securities Regulations in contemplation, or otherwise meditating on the golden mean.
Regulation S of the Securities Act of 1933
For purposes of Regulation S of the 1933 Act, a partnership or corporation is a “U.S. Person” if it is either:
- (i) organized or incorporated under the laws of the United States; or
- (ii) organized or incorporated under the laws of any jurisdiction other than the United States; and, it is formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act of 1933, unless it is organized or incorporated, and owned, by accredited investors (as defined in Regulation D of the 1933 Act) who are not natural persons, estates or trusts.
Securities Exchange Act of 1934
When considering a security-based swap under Part 240.3a71-3(a)(4) of the Exchange Act, a US Person is:
- Any natural person who resides in the United States.
- Any partnership, corporation, trust, investment vehicle, or other legal person organized, incorporated, or established under the laws of the United States or having its principal place of business[1] in the United States.
- Any discretionary or non-discretionary account of a U.S. person.
- Any estate of a decedent who was a resident of the United States at the time of death.
Commodity Exchange Act of 1936
Non-United States person
Never one to be outdone, the commodities regulator defines US personhood in the negative. Here you must be aware of the pitfalls of not being a Non-United States Person for the purposes of Rule 4.7 of that act, “but excluding, for the purposes of Subsection 4.7(D) the exception to the extent it would apply to persons who are Non-United States Persons”.
Sometimes, it becomes transparent that regulators really are wilfully engaged in the perpetuation of the legal eagle’s monopoly.
Should you be interested:
“Non-United States person” means:
- (A) A natural person who is not a resident of the United States;
- (B) A partnership, corporation or other entity, other than an entity organized principally for passive investment, organized under the laws of a foreign jurisdiction and which has its principal place of business in a foreign jurisdiction;
- (C) An estate or trust, the income of which is not subject to United States income tax regardless of source;
- (D) An entity organized principally for passive investment such as a pool, investment company or other similar entity; Provided, That units of participation in the entity held by persons who do not qualify as Non-United States persons or otherwise as qualified eligible persons represent in the aggregate less than 10% of the beneficial interest in the entity, and that such entity was not formed principally for the purpose of facilitating investment by persons who do not qualify as Non-United States persons in a pool with respect to which the operator is exempt from certain requirements of part 4 of the Commission’s regulations by virtue of its participants being Non-United States persons; and
- (E) A pension plan for the employees, officers or principals of an entity organized and with its principal place of business outside the United States.
Given that some of the limbs are mutually exclusive — you can’t be a natural person and a corporation — we can only interpret that “and” as an oddly disjunctive “or”.
The limb that gives the most trouble is limb D, seeing as it descends into a kind of fractal provuso. Putting this in simplified JC terms that are definitely not legal advice (nothing on this site is legal advice, okay?) we think this means
A passive investment vehicle that
- (a) was not designed to facilitate investment by US persons in a vehicle that is exempt from CFTC regulations, and
- (b) in which fewer than 10% of the beneficial interests in the vehicle are in fact held by US Persons
So let us revisit that excluso from the provuso. It generally runs like this:
“any person who is not a “Non-United States person” (as such term is defined in Rule 4.7 under the U.S. Commodity Exchange Act of 1936, as amended, but excluding for purposes of subsection (D) thereof, the exception to the extent that it would apply to persons who are not Non-United States persons)
=Tax
A US person is
- Every United States Citizen, whether born in or outside the US, whether by descent or naturalisation.
- Every United States Tax Resident, being someone with a “Substantial Presence” (having been in the United States for at least 31 days out of 1 year or 183 days out of the 3 years), or who has obtained[2] a Green Card.
DON’T YOU WISH YOU’D NEVER ASKED.
See also
References
- ↑ *Under the final rules, a “principal place of business” means “the location from which the officers, partners, or managers of the legal person primarily direct, control, and coordinate the activities of the legal person.” This definition also provides that the principle place of business for an externally managed investment vehicle “is the office from which the manager of the vehicle primarily directs, controls, and coordinates the investment activities of the vehicle.” in the United States.
- ↑ Not sure whether “and currently holds” applies.