Hello folks! As with most people on the internet, I turn to it to help understand or find out information.
In a nutshell, my wife and I have been working hard to save, and received an inheritance that allowed us to start the Golden Visa process. It has been exhausting to say the least, but a few months back everything seemed to be going swimmingly. Invested in Liquid Opportunities and our application payment has been accepted (I think we’re waiting on AIMA appointments now)
Today I receive an email from Oxy Capital (the normal people I have been corresponding with) that due to an audit, “in order to ensure your investment remains fully compliant with the applicable regulations”, we have to show proof of over $1,000,000 in assets or proof of an annual income of $200,000 or $300,000 if filed jointly with spouse.
These were not requirements to sign into the GV, or at least they didn’t say so when we sent all our documents which at the time of acceptance did NOT meet either of those conditions.
Anyone have any idea what this could be? Is it the sign of some terrible shakedown coming up? FWIW, we now do have assets over $1,000,000, including the GV investment, but despite my polite typing, I am VERY VERY annoyed at what seems like a change of rules that no one mentioned at ALL while going through the process.
Thank you. That clears SO much up. I’m glad I’ve found this forum and gotten some great information from it.
I’m not sure how or why it matters, but it is still a little annoying that it wasn’t brought up until AFTER the investment has been made. It may not even be an issue either way, but at least I have the answer as to why these specific amounts are desired.
Portugal doesn’t require you to be an accredited investor to apply for a golden visa, however depending upon the way the fund is structured they may need to prove any American investors are accredited for SEC compliance. These rules aren’t nefarious and are primarily intended to protect investors.
I imagine this shouldn’t be a big deal for most people pursuing a golden visa - investing almost $600,000 into one (likely underperforming) fund seems foolish if that’s 2/3 of your liquid assets.
I got some clarification through my .. liason? that’s coordinating everything. It is indeed an SEC thing. However he verified that the fund I’m in should not require this. Either way, we can be ok, but it made me think how crappy it would be if it WAS 2/3 of our net worth.
As per rules constantly changing on me? I mean, like anyone, I’m not a fan (I don’t think many people LIKE it), but I’m fairly laid back and as long as ultimately I can retire somewhere in Portugal, and spend my time playing music, and teaching/volunteering to help kids play music, I’ll be a happy clam. If the rules change on how long that takes, it’s ok’ish, but if the rules change to where I can NEVER do that, well then I will be VERY unhappy. And I shall take my knowledge and volunteering spirit ELSEWHERE!
I don’t know the finer points of laws around accredited investors, I just recognize the SEC limits and understand that there are some circumstances where a foreign fund may be required to abide by them if they want to work with USA investors.
I’ve completed accredited investor paperwork before, and I was surprised that Oxy didn’t have me complete it. However, there are lots of SEC rules that only get triggered under certain circumstances (usually the number of investors). The ‘33 act rules generally apply if you are targeting US investors, which they are.
They asked for proof of income for one year over those thresholds, but that isn’t the law. It’s that income in the last two years was above it and you have an expectation to make above the threshold again.
I’m pretty sure I recall having to state I was an accredited investor when I signed up with Oxy. Not the typical fund accredited investor letter request or wording, but the general language on it was there. Being as these funds aren’t available to the general public, only certain investor types, they fall into the SEC bucket of regulations.
I would get used to this requirement as you will likely be asked to continually provide it (typically annually), as well as maintain your status as accredited.
I would guess that this is another case of a fund not knowing that this applied to them in the first place, and having to go shut the barn door after the horses have already left the barn.
It’s understandable of course. The SEC imposes this requirement on any US citizen, but shoves the onus of the matter not on the US citizen but the foreign entities working with the US citizen, who are supposed to somehow magically know there are these obscure rules that apply. Even to market yourself to a US citizen imposes requirements, which on the web can even be interpreted to mean “a US citizen can browse your web site and see your marketing materials” - which is why you see the web sites of foreign funds and entities having an explicit carve-out asking “so are you a US citizen? Oh, go away, we can’t talk to you”. Which is of course about as useful as asking “so are you over 18?” but…
This is strange indeed, and actually surprising. Portugal’s financial services regulator a very clear KYC requirement and these procedures are very well defined. They always ask for detailed KYC and AML declarations, including proofs of income, well before accepting and placing your investment. In fact we had to fill in multiple such forms for the fund management company as well as for the bank in which we were placing our funds. I am surprised that the bank opened the account for you without these declarations being filled in advance.
They did do the extensive check and I filed out MANY documents and wrote personal statements, and provided many bank statements. But nowhere in there did it require that I needed 1 mil in assets or an income of 200 or 300k.
That’s why I’m fairly certain this is a generic form email that was sent to me, but I’m waiting to hear back from them on whether it is or isn’t.
Keep in mind this has nothing to do with AML or KYC.
I’m unsure what happens if the fund isn’t in compliance. I can’t imagine how SEC can penalize an offshore fund for failure to comply, but I imagine there are paths, if nothing else through cooperation with EU regulators. That said, it’s likely limited to flushing the US investors ex post facto. Which would of course suck for those investors.
It isn’t really surprising that PT-based funds would slip up on this point. AML/KYC is likely SOP for anyone operating in the EU and little different, so you’d know to do that anyway. However, most are going to be new to accepting US investors, and if they use a local firm to advise them vs an EY or Accenture, the local firm might not know either. Even something like providing PFIC statements is at the request of and for the convenience of the investor, as opposed to some regulatory requirement. It does make me wonder if the funds I am in ever crossed/dotted Is/Ts; I can’t remember.
As to whether an exchange listed fund can avoid accredited-investor rules, I can’t say, but I don’t know if I’d automatically assume it. The language is quite broad.
First time post: I started the GV process with Holborn/Oxy in August. I received the request for accreditation from Oxy two weeks ago. After clarifying my financial situation using a spreadsheet of the documents I had already submitted, Oxy sent me a form to confirm my accredited investor status. I completed and signed it and all seems good. It was identical or nearly identical to a form I submitted earlier in the GV process, so I would assume this will be a regular (annual?) part of the process.
