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The challenges of FATCA compliance for Cayman funds and their administrators
- Each foreign entity will need to determine if they are a ‘financial institution’, a NFFE or if they meet a deemed compliant category (i.e. qualified collective investment vehicle).
- Register as ‘reporting FIs’ in 2014 to obtain their GIIN (Global Intermediary Identification Number)
- Registration Resources and Support Information – http://www.irs.gov/Businesses/Corporations/FATCA-Registration
- Registration Portal – https://sa2.www4.irs.gov/fatca-rup/
Complete U.S. withholding tax forms
- W8BEN-E (once finalized) for counterparties, prime brokers, etc.
Changing on-boarding documents by July 1, 2014
- For funds – reviewing subscription documents and likely PPM documents with counsel.
Remediate existing investors
- Remediating existing investors as of June 30, 2014 by various dates (first date is December 31, 2014) depending on type of investor and account balance.
- Key benefit of IGA Model I is no withholding, just reporting. Reporting will be governed by the IGA rules of the partner country (i.e. Cayman Islands ).
- First reporting for calendar year 2014 is expected to be required to CI Tax Information Authority by March 31, 2015.