Regulatory (FX, BO, EMI, PI, AIFs)
FATCA Registration | Main Foreign Financial Institution Types
FATCA Registration | Foreign Financial Institution Types
FATCA is a US federal law enacted in order to prevent and detect US tax evasion on income derived by US taxpayers (either citizens or residents) from sources outside the United States. For further information, please check out our related article on the FATCA agreement between Cyprus & USA.
It is worth noting that the FATCA framework provides for a specific procedure for the registration of foreign Financial Institutions (FIs), which have to specify their type in order to create a FATCA account.
In a nutshell, the type of the FFI depends on whether it is a part of an expanded affiliated group (i.e. is related to other FI entities) and/or on the role or position it holds among them.
In order to create a FATCA account, you have to select one of the following four FI types:
- A Financial Institution that does not have any member FIs and is registering for itself or for one or more of its branches.
- Lead of an Expanded Affiliated Group
- A Financial Institution that is authorized to carry out the FATCA registration of the rest of the members of the Group it belongs to.
- Member (not lead) of an Expanded Affiliated Group
- Please note that a member FI cannot create a new FATCA account, it must contact its Leading FI in order to obtain the relevant FATCA credentials (ID & Access Code).
- An Entity that is authorized to perform the due diligence, withholding and reporting obligations of one or more sponsored FI. Please note that a trustee of a trustee-documented trust, when acting within its obligations as trustee, should select this option..
The aforementioned information is provided for general purposes only as there is a significant number of nuances that have to be taken into account when choosing the FI type.
If you require any assistance, you can get in touch with our Regulatory Advisory Team.