Key short term considerations for Cayman funds to be FATCA compliant

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The challenges of FATCA compliance for Cayman funds and their administrators 

Entity classification

  • 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).

Registration

  • 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.

Reporting/withholding

  • 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.

 

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